Misclassification Problems in Diagnosis-Related Groups

Under the Medicare prospective payment system, which is based on diagnosis-related groups, patients with certain diseases may be inappropriately classified. To study this problem using cystic fibrosis as an example, we examined discharge-abstract data from 14 cystic fibrosis centers in a comparison of resource-use requirements by patients with cystic fibrosis and other patients in the same diagnosis-related group. There were 1763 patients with cystic fibrosis and 25,628 other patients in the 87 diagnosis-related groups that contained at least one patient with cystic fibrosis. For the eight diagnosis-related groups in which patients with cystic fibrosis were classified most often, the average length of stay of patients with cystic fibrosis was 14.9 days, as compared with an average of 8.3 days for the other patients (P<0.001). For three hospitals, we were able to convert charges to costs. The average cost of treating patients with cystic fibrosis was $7,262, as compared with $2,908 for all other patients in the same diagnosis-related group (P<0.001). The ratio between the costs of treating patients with cystic fibrosis and other patients (2.5) was greater than the ratio between the lengths of stay for the two groups (1.8), reflecting the more intense use of resources by the patients with cystic fibrosis. A possible solution to the problem of misclassification is to define one or more new diagnosis-related groups for cases of cystic fibrosis or determine a new location within the diagnosis-related group system so that patients with cystic fibrosis can be classified with patients who use similar amounts of resources. (N Engl J Med 1986; 314:484–7.), IN April 1983, Congress enacted Public Law 98–21, which included the Medicare prospective payment system. Under this system, which is based on a patient-classification system developed by researchers at Yale University, all hospital admissions are distributed among 467 diagnosis-related groups (DRGs), which are intended to be relatively homogeneous with respect to resource use. Length of stay in the hospital was the principal measure of resource use employed to create the DRGs. Several problems with the use of the DRG classification system for prospective payment have been recognized. In an attempt to maintain occupancy rates and maximize net revenue, hospitals have.