title: Using DRGs to pay for inpatient substance abuse services: an assessment of the CHAMPUS reimbursement system.
abstract: In October 1988, the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) introduced a prospective payment system based on diagnostic-related groups (DRGs) to pay for substance abuse services. These services were initially excluded from the new payment system because of concerns that a DRG-based system may have a large and poorly understood financial impact on individual hospitals. This report assesses the performance of a DRG system in explaining variation in costs at the individual patient level and evaluates how well this payment system predicts resource use across hospitals. Overall, the substance abuse DRGs explained only 4.2% of the total variance in charges. It was found that the Medicare DRG-based system had to be modified to reflect the characteristics of the younger CHAMPUS population by splitting DRG 435 to account for the increased costliness of beneficiaries younger than 21 years. In addition, the study revealed substantial variation in the impact of the DRG system on hospital revenue. These differences largely reflected significant differences between general and specialty hospitals.
authors.affiliation: Department of Community and Preventive Medicine, University of Rochester Medical School, NY 14642.
authors.forename: J
authors.initials: J
authors.lastname: Zwanziger
authors.forename: L
authors.initials: L
authors.lastname: Davis
authors.forename: A
authors.initials: A
authors.lastname: Bamezai
authors.forename: S D
authors.initials: SD
authors.lastname: Hosek
mesh_terms: D000328:Adult; D000367:Age Factors; D000704:Analysis of Variance; D003953:Diagnosis-Related Groups / Q000191:economics*; D005249:Fees and Charges / Q000706:statistics & numerical data; D005260:Female; D006264:Health Benefit Plans, Employee / Q000706:statistics & numerical data*; D006760:Hospitalization / Q000191:economics*; D006769:Hospitals, General / Q000191:economics; D006801:Humans; D008605:Mental Health Services / Q000191:economics; D008889:Military Personnel; D016311:Outliers, DRG / Q000706:statistics & numerical data; D011445:Prospective Payment System / Q000458:organization & administration*; D019966:Substance-Related Disorders / Q000145:classification / Q000191:economics*; D014481:United States