Medicare reimbursement accuracy under the prospective payment system, 1985 to 1988.
BACKGROUND
Hospital reimbursement by Medicare's prospective payment system depends on accurate identification and coding of inpatients' diagnoses and procedures using the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM). A previous study showed that 20.8% +/- 0.5% (mean +/- SE) of hospital bills for 1985 contained errors that changed their diagnosis related group (DRG) and that a significant 61.6% +/- 1.3% of errors overreimbursed the hospitals. This DRG "creep" improperly increased net reimbursement by 1.9%, +308 million when projected nationally. The present study updated our previous study with 1988 data.


METHODS
The Office of Inspector General, US Department of Health and Human Services, obtained a simple random sample of 2451 hospital charts for Medicare discharges from 1988. The American Medical Record Association reabstracted the ICD-9-CM codes on a blinded basis, grouped them to DRGs, and determined the reasons for discrepancies.


RESULTS
Coding errors declined to 14.7% +/- 0.7% in 1988, and a nonsignificant 50.7% +/- 2.6% of DRG errors overreimbursed the hospitals. Projected nationally, hospitals did not receive a significant overreimbursement. Physician misspecification of the narrative diagnoses underreimbursed the hospitals, while billing department resequencing overreimbursed them.


CONCLUSIONS
The attestation requirement may have deterred DRG creep due to attending physician upcoding, but the peer review organizations' sentinel effect and educational activities have not eliminated hospital resequencing.
Hsia
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Office of Inspector General, US Department of Health and Human Services, Baltimore, MD 21207.
Ahern
C A
CA
Ritchie
B P
BP
Moscoe
L M
LM
Krushat
W M
WM
D000043:Abstracting and Indexing / Q000592:standards; D000368:Aged; D000369:Aged, 80 and over; D003953:Diagnosis-Related Groups / Q000145:classification*; D004194:Disease / Q000145:classification; D005260:Female; D006801:Humans; D008297:Male; D016344:Medicare Part A / Q000592:standards* / Q000706:statistics & numerical data; D011445:Prospective Payment System / Q000592:standards*; D011786:Quality Control; D014481:United States