DRG 121: CIRCULATORY DISORDERS

WITH ACUTE MYOCARDIAL

INFARCTION AND CARDIOVASCULAR

COMPLICA TIONS

1t-lIr"Ia 
OFFICE OF INSPECTOR GENERAL 
OFFICE OF ANALYSIS AND INSPECTIONS 
AUGUST 1989  DRG 121  CIRCULATORY

DISORDERS WITH ACUTE

MYOCARDIAL INFARCTION AND

CARDIOVASCULAR COMPLICATIONS

RICHARD P. KUSSEROW 
INSPECTOR GENERAL 
OAI-12-801210 
AUGUST 1989
 Contract Information

Contractor 
Project Officer

BOTEC Analysis Corporation  David Hsia, J.D., M.D., M. 
JF Strt 
36  Health Car Brach 
02138  Offce of Inspector General 
Cmnbridge, 
330 Independence Ave., SW 
Washington, D.C. 20201 
Contract 
fUS-100-88-0019  EXECUTIVE SUMMARY 
BACKGROUND 
Under the prospective payment system, the diagnosis related group (DRG) 121 represents 
Prelinar 
hear attcks with complications.  data from the National DRG Validation Study 
suggeste that discharges incorrctly biled as DRG 121 comprise a disproportonate share of 
the Medcar overpayments attbutable to disease codng errrs. 
FINDINGS 
Of discharges biled as DRG 121, 17.7 percent should have grouped to a 
dierent DRG. Ths errr rate approximates that for al DRGs, as measured in 
the National DRG Valdation Study. 
Of these elTors, 89.3 percent overpaid the hospita. This rate significantly 
exceed the 59. 6 percent for all DRGs. 
Reasons for elTors include physicians mis-specification of a 
naIative diagnosis, 
other," and resequencing in that order. Miscodng caused no DRG 
mis-assignents. 
RECOMMENDATIONS 
The Health Car Financing Admnistrtion 
(HCF A) should diect the peer 
review organzations (PROs) to review DRG 121 bils for codg accurcy. 
The HCF A should diect the PROs to educate physicians and hospitas about the 
diagnoses that properly grup to DRG 121. 
The HCFA disagrees with the fist recommendation and agres with the second. The Offce of 
Inspector Genera modfied the drt of this report to accommodte the HCFA comments, but 
continues to believe that implementation of these recommendations could recover $42.
2 mi-
lion annually.  ........ 
. . . . ..  ..  ...   ...   ...   ....   . ...   . ... ...   .   ..... ...       . ........         ..........          .:.........           ..............              ..............             ... ..........    .         .... ........   .   .      .... .... ....      .   .   ....... ....   .       .  ............             ..............              ..............              ..............
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TABLE OF CONTENTS 
EXECUTIVE SUMMARY. 

INTRODUCTION 
Background. . . . . . 
PPS vuerabilties

Clai 
processing. . . . . . 
DRG 121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Methodology. . . . . . 
FINDINGS 
Smnple charteristics. 

DRG assignent errrs. . 
Dirtion of errrs. . 
Soure of elTors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
Reasons for assignment errrs

Financial effects 
Corrct DRG assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
. RECOMMENDATIONS 
I: 
Appendix A- DRG 121 discharges frm al PPS hospitas 
. . . . . . . . . . . . . . . . . . . . . . . A-
Appendix A-2: DRG 121 smnpling frame 
. . A-
Appendix A-3: DRG 121 hospita demogrphy 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-
Appendix A-4: DRG 121 hospita demogrphy comparson 
. . . . . . . . . . . . . . . . . . . . . . . A-
DRG 121 patient demography. . . . . . . 
Appendix  S:  . . . . . . . . . . . . . . . . . . . . . . . . . . . A-
Appendix A-6: DRG 121 patient demography comparson 
. . . . . . . . . . . . . . . . . . . . . . . . A-
Appendix B-1: DRG 121 assignment errrs. . 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-

Appendix B-2: DRG 121 assignment elTors comparson. . . 
. . . B-
Appendix B-3: DRG 121 assignment errrs by patient demography. . . . . . . . . . . . . . . . . B-
I: 
Appendix C- DRG 121 diection of elTor 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . C-
Appendix C-2: DRG 121 of diection of elTor comparson 
. . . . . . . . . . . . . . . . . . . . . . . . C ..................... ............. ...  ..... 
. . . . . . . . . . . . . . .. ..  ..  . . . . . . . . . . . . . . . . . . 
Appendix C-3: DRG 121 diection of elTor by patient demogrphy  . . . . . . . . . . . . . . . . . C-
Appendix D-l: DRG 121 hospita deparent makg elTor ....................... D-

Appendix D-2: DRG 121 hospita deparent makg elTor comparson  . . . . . . . . . . . . . D-
Appendix D-3: DRG 121 hospita deparent makg elTor by patient demogrphy  . . . . D-
l: 
Appendix E- DRG 121 reasons for elTors  . . . . . . . . . . . . . . E-
Appendix E-2: DRG 121 reasons for elTors by hospita demography  . . . . . . . . . . . . . . . . E-
Appendix E-3: DRG 121 reasons for elTors comparson  . . . . . . . . . . . . . . . . . . ; . . . . . . . E-
Appendix E-4: DRG 121 reasons for DRG assignment elTors by patient demography. . . E-
Appendix F-l: DRG 121 corrted relative weights  . . .. . F-
AppendixF-2: DRG 121 corrcted reimbursement .............................. F-

estiate 
AppendixF-3: DRG 121  overpayments ............................... F-

Appendix G-l: Major Diagnostic Categories for discharges incolTectly 
assigned to DRG 121 ......................................... G-

Appendix G-2: DRGs fruently miscoded to DRG 121 ............... . . . . . . . . . . . G-

l: 
Appendix H- DRG 121 clical incidents  . H-
Appendix H-2: DRG 121 clinical incidents comparson  . . . . . . . . . . . . . . . . . . . . . . . . . . H INTRODUCTION

Background 
On October 1, 1983, the Health Car Financing Admistrtion (HCFA) began implementing a 
new system of payment for inpatient hospita servces under the Medicar program The new 
prospective payment system (PPS) replaced the cost-based reimbursement system. Congrss 
mandated ths change because of rapid growth in health care costs, parcularly inpatient ex
penses under Medicare. 
Under PPS, hospitas reeived a pre-established payment for each discharge, based upon the 
diagnosis related group (DRG) to which the discharge is assigned. The PPS classified dis
charges into clicaly coherent  simiar mnounts of hospital resources, 
grups which used 
based on varables such as diagnosis; evaluation and tratment procedurs; and patient age, 
sex, and discharge status. Each of the 475 DRGs had an associate relative weight, which rep
resented the average cost for hospita care provided to patients with diagnoses grouping to that 
DRG as a proporton of the cost of the average patient The hospita received this payment, in
dependent of the actual lengt of hospitazation or cost of treatment for the individual patient. 
cert 
With  exceptions, the hospita retaned any surlus from patients consumig less than 
the expected mnount of resources, and suffered losses on those patients consuming more. 
The shit from cost-based, retrospective reimburement to prospective payment constituted 
one of the most drmntic changes in health car reimburement since the creation of Medicare. 
A fied paymnt per dischare induced hospitas to implement economies and reduce unneces
sar servces. The tota payments to the hospitas provided the smne financial resources for 
patient car. In effect, PPS revers the financial incentives for hospitas. Where the cost-
rewar 
reimbursement system  longer hospita stays and more costly tratments, PPS 
rewared earlier discharges and less costly proedures. One of the first consequences of the 
new payment system was a drop in average length of hospita stay for Medicar patients. 
PPS vulnerabilties 
The advent ofPPS crated new opportnities for manipulation or "gamng" to increase hospi
ta revenues frm Medcar patients. To protect the integrty of PPS and maitain quality of 
care Congress established the peer review organizations (PROs) to monitor hospita activities. 
The Offce of the Inspector Genera (OIG) conducted The National DRG Valdation Study 
(NDRGVS) to surey the genera accurcy of DRG assignment and qualty of car performed 
by hospitas under PPS. Its examnation of 700 medical records and established that assign
ment errrs resulted in $300 milion in overpayments to hospitals and that the majority of over
payments could be trced to assignment errrs afectig a small number ofDRGs. This report 
is one in a series examning assignment accuracy of one of the DRGs identified as having the 
highest impact on overpayments under PPS and the gratest potential for cost recovery.  The PPS gamg taes two pricipal forms: optimization and creep. "Optization 
strategies adere to codng rules, but maximize hospita reimburements by selecting  ost 
the 
expensive mnong viable alternative principal diagnoses or adding more seconda diagnoses. 
The PPS permts optimiation, which flows frm the basic incentive strctue of the PPS sys
tem. 
DRG crp" results frm codg practices which do not conform to codng rules. Sources of 
DRG crp include: 
The attndig physician wrtes an incolTect pricipal diagnosis 
Mis-specifcation: 
(defied by the Uniorm Hospita Discharge Data Set (UDS) as "that condition 
established after study to be chiefly responsible for occasioning the admssion of the 
patient to the hospita for care ), seconda diagnoses, or proedures on the attestation 
sheet 
The hospita assigns incorrct numeric codes to diseases or proedures 
Miscoding: 
corrtly attste to by the attndig physician. 
Resequencing:  The hospita substitutes a seconda diagnosis for the corrct principal 
diagnosis. 
curl 
Auditig and review practices seek to  ilegal crep by identiying discharges in ,?hich
codg 
rules ar misapplied or ignored. 
Claims processing 
clai 
Under PPS, the hospita  for Medcar 
fies a  reimbursement upon dischargig the 
beneficiar. At the time of discharge, the attndig physician attests to the principal diagnosis 
which caused the patient s adssion to the hospita, seconda diagnoses, and procedurs 
(diagnostic and therapeutic) provided. The hospita translates the naIative diagnoses of the 
physician s attestation statement into numeric codes based on the International Classification 
of Diseases, Ninth Revision, Clinical Modcation (ICD- CM), and prepars a claim. Fiscal
intermedar (F organizations, working under contract with HCFA, enter the hospital' s codes 
progr 
into the GROUPER computer  which assigns the appropriate DRG for reimbursement 
Hospita reimbursement is calculated by multiplying the "relative weight" of each DRG 
stadaze 
category by a  amount, as moded by certn hospital-specific factors. The rela
tive weight of each DRG vares above or below the mean relative weight for all DRGs (ap
00) 
proxiately 1. accordng to the average amount of hospital resoures used by 
patients in 
that diagnostic group. The higher the relative weight, the greater the reimbursement. Mis-as-
signment of the ICD- CM categories, or errneous assignment or sequencing of patient diag
noses, can thus have signifcant financial implications.  ---
. ". ..
:: ::.~-:. .:-~ .:-~_-:~-:.-~.:-:---:- : --:--:----:--:-  .-- -:-:-_--..-..:_ :-:-::.-- .--_--.- ..--,_: - -_:-".-.--.:-"..--  ..---..-- --_ - -----.: ---. :- _- : -.---::- ---:-;  --:-----: ---.: --.-:---.--:---.---- --
---- -: --- .--- --------------: ---:--.  :---.:---- ----  .- --=- ---  - ---.  -:=- ---   -:=-  :---:- =-:--:---: =- :- :--:=--:--:-_-=-:---:-.-_-=----  =-------- --.-..-..-.--.
DRG 121 
Ths inspection exames errneous assignment in DRG 121 , Circulatory Disorders with 
Myocardial Inartion and Cardiovascular Complications. In order to grup to DRG 121, a 
bil must have codes for both (1) a myocaral infartion and (2) a carovascular complica
tion. Either diagnosis may appear as the principal diagnosis or as a seconda diagnosis. The 
order in which they appear doesn t matter. 
Relatie Weight 
12 -- ----------- ------ ----------------- ------ ----
Discharges (10 K) 
Chares ($100 M)
.....0..... 
Payment ($100 M) 
6 -- ----- -.e:- Mea payment ($1 K)
-..-6-..-..-..-..-..-..-..-.... 
4 -- 
2 -- -
198  198  198  1987 
Fisc Yesr

Figure 1: DRG 121 
The number ofDRG 121 bils and their dollar reimburement has risen steadly thughout the 
history of the prospective payment system. Decreases in the relative weight from 1.8648 to 
1.7687 have not offset these incrases. The DRG 121 bils constitute 1.2 percent of dischar
ges, but 1.8 percent of reimbursement (Appendix A-
Methodology 
Ths study used a strtied two-stage sampling design based on hospitas to select medical 
record for review. The fist stage used simple random smnpling without replacement to 
select up to 80 hospitas in each of thee bed size strata: Less than 100 beds (small), 100 to 
299 bed (medum), and 300  tage of the design employed 
or more beds (large). The second 
systematic random sampling to select up to 25 DRG 121 bils from each strta for Medicar 
discharges between October 1, 1984 and Marh 31, 1985. (Appendix A !::::::::::::::
100 beds 
10029 beds 
30+ beds

DRG 121  All DRGs 
Figure 2: Sampling frame 
The OIG contrcted with the Health Data Institute (HI) of Lexington, Massachusetts to 
reabstrct the medcal record. Upon receipt, the contrctor "blinded" the ICD- CM codes 
by coverig them, and assigned an identification number to each record. An Accredited 
Record Technician or Registere Record Admnistrator proficient in ICD- CM codng 
reviewed the enti record to substatiate the principal diagnosis, other diagnoses, and proce
durs indicated by the attendig physician in the naItive attestation form. Any records 
which did not support the assigned DRG classification were refeITd to physician reviewers. 
The physician reviewer designated the corrct UHDS principal diagnosis, and addtional 
diagnoses and/or proedures which' were substantiated by the patient record. The GROUPER 
computer progr proessed the reabstracted ICD- CM codes to determe COlTect DRGs. 
fu 
discussion of the methodology and findings of the contrctor record review' is available 
National DRG Valdation Study (available from OIG Public Mfai). 
the fial report of the 
The OIG contrcted with BOTEC Analysis of Cabridge, MA to exame this data to identify 
sources of assignent elTors and formulate recommendations for recovery of overpayments.  ---..: ---::-::-' '-~--'~~~""' -:;: ";,:.=-,,:  ~~~~;:~':'- ':' ==':=:.. :
FINDINGS 
Sample characteristics 
In Fiscal Year (F) 1985, 96,443 of the 8.3 millon prospective payment discharges (1.2 per
cent) gruped to DRG 121. The National DRG Validation Study estimates that larger hospi
tas submitted more DRG 121 bils, but that smaller hospitas had a higher proporton of their 
DRG 121. In the fist half ofFY 1985, the 239 hospitals selected in stage-one 
bils group to 
of the sample design (the smnpling frame) biled for 222,396 discharges of which 2,591 came 
frm DRG 121 (1.2 percent). The stratication into bed-size classes ilustrtes the higher 
volume of larger hospitas and the higher smnpling frction of smaler hospitals. 
The two-stage sample design pennts calculation of separte results for Medicare beneficiares 
(the probabilty of something happening to a person) and hospitals (the odds of an event at a 
parcular hospita). Therefore the appendices, tables, and chars report individual totals by 
both discharges and hospitas.

Of the discharges assigned to D RG 121, 21.1 percent came from small hospitas (c: 1 00 beds), 
36.2 percent from mid-sized hospitas (100-299 beds), and 42.7 percent from large hospitas 
(300+ beds). Ths distrbution paralels the proportons for all Medicar discharges with slight
ly more discharges from smal hospitas and slightly fewer from large hospitas. For this in
spectioR, DRG 121 discharges were chosen radomly from equal number of hospitas from 
strtu, 
each  thereby intentionaly oversmnpling small hosp tas and pr04ucing sampling frc
frm sma 
tions of 13.3 percent  hospitas, 3.3 percent from mid-sized hospitas, and 1.5 from 
1 n Tge hospitas.

Yea 
DRG 121: Urban 
Urb 
All DRGs: 
DRG 121: Teaching 
All DRGs: Teaching 
DRG 121: Profi 
All DRGs: Profi 
- R 
Per  100
Figure 3: Hospital demography 
The majority of DRG 121 discharges, weighted by discharge, came from urban, nonteaching, 
and nonprofit hospitas. (Appendi A-3) These findings did not significantly differ from 
those in the National DRG Validation Study. (Appendix A-4)   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
--  - - - - - - - - - - -  --  - - - - -  --  - - - - - - - - - - - -  --  - - - - - - - - - - --
DRG 121 National DRG All Medicare Validation Study 
Age (year)
 74.  73.  not available 
Sex (%male)  54.  46.  42. 
LOS (days)  10.4 
Payment ($)  4894  3115  2985 urban 
2381 
Mortty  6.4  not avaiable 
Table I: Patient characteristics 
the 
The DRG 121 discharges (discharge-weighted) averaged almost  days longer length of 
stay in the hospita than either discharges in the National DRG Validation Study or 
Medcar discharges. (Appendi A-5) The fonner discharges were more also more likely to 
be mae (Mantel-Haenszel chi-squar 2.52, df 1, P  25). DRG 121 discharges also 
averaged over $1 700 more in payment than discharges in the National DRG Validation Study 
and over $2,00 more than discharges for the Medicar population as a whole. (Appendix A-
Percent 
DRG121 
All DRGs 
()29  30+ 
-=100 
Bed size 
Figure 4: Coding mis-assignments 
DRG assignment errors 
Overal, 17.7 percent of discharges paid as DRG 121 changed to a different DRG after 
reabstrction. This rate did not significantly differ than the average for all DRGs in the Na
tional DRG Validation Study (Mantel-Haenszel chi-square 0. 13, df 1, P  75). Small hospi
tals had a 30. 8 percent errr rate, 53. 3 percent of the sample s elTors. Mid-sized and large 
hospitas had elTor rates of 16.0 and 18.0 percent respectively. These findigs parlel the 
proportons of the National DRG Valdation Study in which smal hospitals also contrbuted 
the largest shar of assignment elTors. (Appendi B ------------ --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------  .  ........  .. .  :::::::::.
Analyzed by hospita demogrphy, the proporton of errrs was largest mnong urban, non
hospitas. Analysis of hospita demogrphy in the National DRG 
teachig, and nonprofit 
Valdation Study indicate that acss all DRGs, hospital charcteristics were not associated 
with significant differences in assignment accuracy when controllng for bed size. (Appendix 
Patients incolTectly assigned to DRG 121 were younger (75.5 years to 67.2 year), and ex
perienced shortr lengths of stay in the hospita (10.6 days to 9.0 days) than those corrctly as
signed In adtion, incolTectly assigned discharges paid, on averagt?, over $400 more than 
those COlTectly assigned All patients in the sample discharged as expird had been incolTectly 
assigned (Appendi B-
Percnt 
c: 
DRG 121 overpayment 
DRG 121 underpayment
All DRGs overpay 
All DRGs underpay 
.25 
100  10029  30+ 
Bed size 
Figure 5: Direction of errors 
Direction of errors 
Weighted by discharge, 89.3 percent of errrs in the DRG 121 sample resulted in overpay
ments to hospitas. (Appendi C-l) This rate signifcantly exceeded the 59.6 percent of over
payments reported in the National DRG Validation Study (Mantel-Haenszel chi-squar 5.21, 
df 1, P .c 0.025). (Appendi C-2) Weighted by discharge, however, the rate of overpayment 
exceeded that of the National DRG Validation Study only in ur 
an and nonprofit hospitas. 
When combined with the rate of elTor for DRG 121 (17.7 percent), the effective rate of over
payment for DRG 121 was 15.8 percent, compard to an effective overpayment rate of 11. 
percent for the National DRG Valdation Study. 
Source of errors 
In this smnple, 9 of the 15 assignment elTors occUled when the medical records deparent in
corrctly accepted and coded discharges as DRG 121 and biled accordigly. (Appendix D-
Six errrs, resulted when the medical records deparent corrctly selected codes that did not 
group to DRG 121 , but the hospita biled the discharge as DRG 121 anyway. This 51.8 per cent of errrs (discharge weighted) due to biling errrs greatly exceeds the 8. 8 percent for the 
National DRG Validation Study. (Appendix D-
year to 64.7 years) and lengths of 
Discharges biled incorrctly had a lower average age (71.4 
stay alost twce that of dischares with codng elTors (11.0 days to 6.5 days). Discharges 
with bilg elTors averaged nearly $1,00 more than discharges with codng errrs. Biling er
rors also included  reportd expird. (Appendi D-
al of the cases 
Reasons for assignment errors 
Of the 15 elTors in the DRG 121 smnple, al but one resulted from either mis-specification er
ror by attndig physicians or "other" elTors. When examned using an exclusive analysis 
identig 
mis-specifed a diag
that selects  the fist errr to occur chronologically, physicians 
nosis in 53.3 percent of the mis-assignments. Aside from one resequencing errr, the rest of 
errs 
the  in ths sample (40.0 percent) were categorized as "other" elTors. (Appendix E-
Misspeclfcation 
Miscing 
f:::::::::::::::::::::::::::: 
Resuenclng 
Oter 
DRG 121  All DRGs 
Figure 6: Reasons for coding 
The majority of mis-specifcation elTors by physicians occulTed in smal hospitas. (Appendix 
2J Mis-specifcation elTors were also more likely in nonteaching and nonprofit hospitas. 
The bulk of "other" elTors occUld in urban, nonteaching, and nonprofit hospitals. The dis
charge weighted 50. 8 percent distrbution of "other" errrs exceeded the 13. 8 percent for the 
National DRG Validation Study. (Appendix E-
Patients with "other" errrs were younger (66.3 year to 74. 3), had a longer average length of 
stay (9.5 days to 8. 1 days) and a higher average payment ($5486 to $3843) than discharges 
with mis-specifcation elTors. (Appendix E-4J    --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --  --
- - 
-------       -------       ----  -  --------   - - ---     -----   ---- - --    -  ---  --  ---  --  ----    -  -----   -  - ---  - -  -- --   - - ----    -  -----   -   ---- -  -  -- --   -  -----     -----    --- -  -  ----    ------ -  -  ---- -- -- ---   --  ---    -  ----- --  -   --  - --  -- - -- -    -- ------  -  - - --- - -   - --- - -  --  -  -  ---- -  - --- -  --  --- -  --  -- -  ---  ---   - -- --- - -  ------     - -- -- - ----  -  -----  -  --- -- -  - --- - -- - --  --- ---     ---   ---   -- - - -  ---   ----    ----- -  --  --  --  - --  -  -- --    -----    --- --    -----   ----- - - -- - --   ----     ------ -  -- - ---- -  -----    - -----    --- - - -- -  --  -  ----   ----   - - -  ----- -  --- -- - ---  - --- - - - - ---    - ---  -  -----   --- ----- -   -- - -- -    - -----    -- ---- -   ------     - ---- -   - ------ -    -----    ------    -  -- -- -   - ----   -  --- -- - -  - ----      -----    ------   - - ----    --  - --- - -   ----   -  -----   --  - -- -    ----    ----- -   ----   --- -- -   - --- -   -- --   - -- -- -  ---  - - ----  --  ---   --  ---     ----------
Financial effects

Mter reabstrtion, the average relative weight for DRG 121 discharges in this sample 
droppe frm 1.8454 to 1.7298. For the 76 discharges in this smnple, this mnounted to an ag
drp in relative weight of 8.7833 (4.4 percent weighted by discharges). (Appendix F-
gregate 
Smlllon 
198  198  198  1987  198  198  1990 
Fiscl Year

Figure 7: Overpayments 
stadaze 
Based on the  mnount for reimbursement in FY 1985 ($2985 urban and $2381
ru), 
the average change in relative weight for discharges assigned to DRG 121 resulted in 
mean overpayments to hospitas of $601 (smal hospitas), $218 (mid-sized hospitals), and 
frm 
$83 (large hospitas) on each discharge. Two-thirds of these overpayments came  small 
hospitas. (Appendix F-

Extrpolate to the enti Medcar population, if the rate of elTors and urbanrual discharges 
remas constat, mis-assignment ofDRG 121 results in $42.2 millon anually. Extrpolat
ing by be siz, mid-sizd and large hospitals together would account for over the-quarers 
of the overpayments. (Appendi F-
Correct DRG assignments 
All the discharges incolTectly assigned to DRG 121 cmne frm Major Diagnostic Category 
(MDC) 05, the ciculatory system. The DRG 121 also falls into this MDC. The DRG 121 is 
unique in that the attstation must contan both a principal diagnosis of acute myocardial in
fartion and a carovascular complication mnong its diagnoses, but not in a parcular order. 
Reabstraction confied myocaral infarction, but not a cardiovascular complication, in 33.3 
percent of assignment errrs. (Appendix G-
These discharges recoded to DRG 122 (relative weight 1.3509). In 20.
0 percent of errrs, the 
patient died, reassigning the bil to DRG 123 (relative weight 1.1242). In another 33. 3 percent  -------------------------------------------------------------------- ---- --- -- -- --- -- - - - -- -- - -- - -- - -- ---  ---- -- -- ----   ---  ---   ---  ---  ---  --- ---   --- ----  --- - --   ---  --- - ----  ---  ---   ---  ---  ---  --- - --  - -- - -- --  ---  ---- - ---  - - - ---- ----
actualy suffer a hear attack, but had angina or a cardiac aIhythmia. 
of errrs the patient not 
(Appendi G-

In adtion, the ICD- CM cods for ischemic hear disease can group to DRG 121 if the 
patient subseuently suffers a hear attack within 8 weeks of discharge. However, only one er
that such events occur only raely. 
roneous bil caIed such a cod, suggesting 
Percent 
DRG 121 
f= 0  All DRGs 
Unneeed admissions  Poor quality of care  Premature dIscharge 
Figure 8: Clinical incidents 
Clinical review results 
The DRG 121 had 2.3 percent rate of poor quality care. (Appendi H-l) This-rate is less than 
hal that in the National DRG Valdation Study. (Appendi H-2) It found no premature dis
adssions. 
charges or unnecessar  RECOMMENDATIONS 
dict 
the peer review organizations 
The Health Care Financing Admnistration should 
to review DRG 121 bils for codg accurcy. 
The HCFA should dict the PROs to educate physicians and hospitals about the 
diagnoses that properly grup to DRG 121. 
The HCFA disagrees with the fit recommendation and agres with the second. The Offce of 
Inspector Genera modfied the drt of ths report to accommodte the HCFA comments, but 
contiues to believe that implementation of these recommendations could recover $42;2 mi-
lion anualy.  Appendix A-1: DRG 121 discharges from all PPS hospitals

Fiscal Year  1984  1985  1986  1987 
Relative weight  864  8454  8145  7687 
Number of discharges  365  96,  113,963  122,068 
Total charges ($ milion)  370.  722.  896.  022. 
Total reimbursement ($ milion)  259.  487.  567.  590. 
Average reimbursement ($)  764  567  982  836 
Appendix A-2: DRG 121 sampling frame 
Number  Bed size 
.:100  100-299  300+  Total 
Medicare population  20,350  912  41, 181  96, 
Sampling frame  196  762  633  591 
Sample 
Sampling fraction (%)  13. 
Appendix A-3: DRG 121 hospital demography 
Number  Bed size  Weighted percentage 
(Percent)  .:100  100-299  300+  Total  Sample  Discharge  Hospital 
Urban  7 (26.  18 (72.  24 (96.  (64.  (72.  (52. 
Rural  19 (73.  7 (28.  1 (4.  (35.  (27.  (47. 
Teaching  2 (7.  1 (4.  19 (76.  (28.  (35.  (17. 
Nonteaching  24 (92.  24 (96.  6 (24.  (71.  (64.  (81. 
Profit  (15.4)  4 (16.  0 (0.  (10.  (9.  (13. 
Nonprofit  22 (84.  21 (84.  25 (100)  (89.  (91.  (86. 
Total  26 (100)  25 (100)  25 (100)  (100)  (100)  (100)  Appendix A-4: DRG 121 hospital demography comparison 
Percent  Bed size  Weighted percentage 
-:100  100-299  300+  Sample  Discharge  Hospital 
Urban  DRG 121  26.  72.  96.  64.  72.  52. 
NDRGVS  19.  70.  94.  62.  71.  48. 
Rural  DRG 121  73.  28.  35.  27.  47. 
NDRGVS'  80.  29.  38.  28.  52. 
Teaching  DRG 121  76.  28.  35.  17. 
NDRGVS  18.  55.  25.  31.  16. 
Non- DRG 121  92.  96.  24.  71.  64.  82. 
teaching  NDRGVS  97.4  81.  44.  74.  68.  83. 
Profit  DRG 121  15.  16.  10.  13. 
NDRGVS  17.  10. 
Non- DRG 121  84.  84.  100.  89.  91.  86. 
profit  NDRGVS  90.  82.  97.  90.  90.  89. 
Appendix A-5: DRG 121 patient demography 
Bed size  Weighted average 
-:100  100-299  300+  Sample  Discharge  Hospital 
Age (years)  78.  71.  74.  74.  74.  75. 
Sex (% male)  53.  52.  56.  54.  54.  53. 
LOS (days)  10.  11.  10:0  10.4  9.4 
Payment ($)  3696  4417  5891  4655  4894  4278 
Mortaliy (%)
 (($%)) 
Appendix A-6: DRG 121 patient demography comparison 
Bed size  Weighted average 
c:100  100-299  300+  Sample  Discharge  Hospital 
Age  DRG 121  78.  71.  74.  74.  74.  75.4 
(years)  NDRGVS  76.  74.  72.  74.  73.  74. 
Sex  DRG 121  53.  52.  56.  54.  73.  74. 
(% male)  NDRGVS  43.  45.  48.  45.  46.  44. 
LOS  DRG 121  10.  11.  10.  10. 
(days)  NDRGVS 
Payment  DRG 121  3696  4417  5891  4668  4894  4278 
NDRGVS  1849  2923  3807  2860  3074  2508 
Mortality  DRG 121 
NDRGVS  Appendix B-1: DRG 121 assignment errors 
Number  Bed size  Weighted percentage 
(Percent)  -:100  100-299  300+  Total  Sample  Discharge  Hospital 
Urban  1 (14.  3 (16.  4 (16.  (16.  (16.  (15. 
Rural  7 (36.  0 (0.  0 (0.  (25.  (7.  (19. 
Teaching  0 (0.  0 (0.  4 (21.  (18.  (9.  (3. 
Nonteaching  8 (33.  3 (12.  0 (0.  (20.4)  (11.  (21. 
Profit  1 (25.  0 (0.  (12.  (5.  (12. 
Nonprofit  7 (31.  3 (14.  4 (16.  (20.  (18.  (23. 
Total  8 (30.  3 (12.  4 (16.  (19.  (17.  (22. 
Appendix B-2: DRG 121 assignment errors comparison 
Percent  Bed size  Weighted percentage 
-:100  100-299  300+  Sample  Discharge  Hospital 
Urban  DRG 121  14.  16.  16.  16.  16.  15. 
NDRGVS  22.  19.  16.  18.  17.  20.4 
Rural  DRG 121  36.  25.  19. 
NDRGVS  23.  16.  22.  21.  20.  21. 
Teaching  DRG 121  21.  12. 
NDRGVS  20.  20.  15.  17.4  17.  19. 
Non- DRG 121  33.  12.  20.4  11.  21. 
teaching  NDRGVS  23.  17.  17.  20.  19.  20. 
Profit  DRG 121  25.  12.  12. 
NDRGVS  23.  18.  18.  20.  19.  21. 
Non- DRG 121  31.  14.  16.  20.  18.  23. 
profit  NDRGVS  23.  18.  16.  19.4  18.  20. 
Total  DRG 121  30.  12.  16.  19.  17.  22. 
NDRGVS  23.  18.  16.  19.  18.  20.  (($%)) 
Appendix B-3: DRG 121 assignment errors by patient demography 
Bed size  Weighted average 
-:100  100-299  300+  Sample  Discharge  Hospital 
Age  Correc  80.  72.  75.  75.  75. 
(years)  Incorrec  75.  61.  68.  70.  67.  69. 
Sex (%  Correct  55.  54.  52.4  54.  53.  54. 
male)  Incorrect  50.  33.  75.  53.  54.  48. 
LOS  Correct  10.  11.  10.  10. 
(days)  Incorrec  11.4 
Payment  Correct  3876  4331  5778  4695  4853  4325 
Incrrect  3290  5049  643  4494  5290  4368 
Mortality  Correct 
Incrrec  12.  66.  20.  26.  28.  Appendix C-1: DRG 121 direction of error 
Number of  Bed size  Weighted percentage 
overpayments  oe100  100-299  300+  Total  Sample  Discharge  Hospital 
(Percent of errors) 
Urban  1 (100.  3 (100.  3 (75.  (87.  (89.  (96. 
Rural  7 (100.  (100)  (21.  (51. 
Teaching  3 (75.  (75.  (32.  (11. 
Nonteaching  8 (100.  3 (100.  (100)  (57.  (84. 
Profit  1 (100.  (100)  (21.  (51. 
Nonprofit  7 (100.  3 (100.  3 (75.  (92.  (89.  (96. 
Total  8 (100.  3 (100.  3 (75.  (93.  (89.  (96. 
Appendix C-2: DRG 121 of direction of error comparison 
Percent  Bed size  Weighted percentage 
of errors  oe100  100-299  300+  Sample  Discharge  Hospital 
Urban  DRG 121  100  100  75.  87.  89.  96. 
NDRGVS  53.  60.4  57.  58.  57.  56. 
Rural  DRG 121  75.  75.  21.  51. 
NDRGVS  66.  57.  65.  64.  62.  63. 
Teaching  DRG 121  75.  75.  32.  11. 
NDRGVS  66.  59.  56.  57.  59.  62. 
Non- DRG 121  100  100  100  57.  84. 
teaching  NDRGVS  64.  59.  59.  61.  60.  61. 
Profit  DRG 121  100  100  21.  51. 
NDRGVS  68.  55.  63.  60.  61.  63. 
Non- DRG 121  100  100  75.  92.  89.  96. 
profit  NDRGVS  63.  60.  57.  60.  59.  61. 
Total  DRG 121  100  100  75.  93.  89.  96. 
NDRGVS  64.  59.  57.  60.  59.  61.  (($%)) 
Appendix C-3: DRG 121 direction of error by patient demography 
Bed size  Weighted average 
-=100  100-299  300+  Sample  Discharge  Hospital 
Age  Overpaid  75.  61.  69.  71.  67.  69. 
(years)  Underpaid  65.  65.  27.  10. 
Sex  Overpaid  50.  33.  66.  50.  51.  47. 
(% male)  Underpaid  100.  100.  42.  15. 
LOS  Overpaid 
(days)  Underpaid  21.  21. 
Payment  Overpaid  3290  5049  5304  4098  4787  4182 
Underpaid  10020  10020  4279  1583 
Mortalit  Overpaid  not available 
Underpaid  Appendix D-1: DRG 121 hospital department making error 
Coding depart- Bed size  Weighted percentage 
ment errors  100  100-299  300+  Total  Sample  Discharge  Hospital 
(Percent of errors) 
Urban  1 (100)  1 (33.  2 (50.  (50.  (54.  (70.4) 
Rural  5 (71.4)  (71.4)  (15.  (36. 
Teaching  2 (50.  (50.  (21.4)  (7. 
Nonteaching  6 (75.  1 (33.  (63.  (27.  (49. 
Profit  1 (100)  (100)  (21.  (51. 
Nonprofit  5 (74.  1 (33.  2 (50.  (57.  (49.  (57. 
Total  6 (75.  1 (33.  2 (50.  (60.  (49.  (57. 
Balance of errors made by billng department. 
Appendix 0.2: DRG 121 hospital department making error comparison 
Percent coing  Bed size  Weighted percentage 
department  100  100-299  300+  Sample  Discharge  Hospital 
errors 
Urban  DRG 121  100  33.  50.  50.  54.  70.4 
NDRGVS  89.  88.  90.  89.  89.  89. 
Rural  DRG 121  71.  71.4  15.  36. 
NDRGVS  94.  95.  90.  94.  93.  94. 
Teaching  DRG 121  50.  50.  21. 
NDRGVS  91.  92.  89.  90.  91.  91. 
Non- DRG 121  75.  33.  63.  27.  49. 
teaching  NDRGVS  93.  90.  92.  92.  91.  92. 
Profit  DRG 121  100  100  21.  51. 
NDRGVS  86.  92.4  81.  89.  86.  87. 
Non- DRG 121  74.  33.  50.  57.  49.  57. 
profit  NDRGVS  94.  90.  90.  92.  91.4  92. 
Total  DRG 121  75.  33.  50.  60.  49.  57. 
NDRGVS  93.  90.  90.  91.  91.  92.  (($%)) 
Appendix D-3: DRG 121 hospital department making error by patient 
demography 
Bed size  Weighted average 
100  100-299  300+  Sample  Discharge  Hospital 
Age  Coding  75.  69.  71.  73.  71.  72. 
(years)  Billng  76.  57.  65.  66.  64.  68. 
Sex  Coding  66.  50.  55.  35.4  42. 
(% male)  Billng  50.  100  50.  60.  32. 
LOS  Coding 
(days)  Billng  18.  11. 
Payment  Coding  3074  5534  5254  3832  4895  4220 
Biling  3940  4807  7713  5486  5865  4819 
Mortality  Coding 
Billing  50.  100  50.  46.  58.4  Appendix E-1: DRG 121 reasons for errors

Number  Bed size 
-=100  100-299  300+  Total  (Percent) 
Mis-specification 
Principal diagnosis  (20. 
Secndary diagnosis  (33. 
Miscoding  (0. 
Resequencing  (6. 
Other 
Admiting diagnosis used  (6. 
No hospital codes  (6. 
Multiple attestations  (6. 
Other  (20. 
Total  (100. 
Appendix E-2: DRG 121 reasons for errors by hospital demography 
Number  Mis-specification  Resequencing  Other 
(Percent) 
-=100 beds  5 (62.  1 (12.  2 (25. 
100-299 beds  1 (33.  0 (0.  2 (66. 
300+ beds  2 (50.  0 (0.  2 (50. 
Urban  4 (50.  0 (0.  4 (50. 
Rural  4 (57.  1 (14.  2 (28. 
Teaching 
2 (50.  0 (0.  2 (50. 
Nonteaching 
6 (54.  1 (9.  4 (36.4) 
Profit  1 (100)  0 (0.  0 (0.
Nonprofit  7 (50.  1 (7.  6 (42. 
Total  8 (53.  1 (6.  6 (40.  Appendix E-3: DRG 121 reasons for errors comparison 
Percent  Bed size  Weighted percentage 
.c100  100-299  300+  Sample  Discharge  Hospital 
Mis-speci- DRG 121  33.  13.  53.  46.  51. 
fication  NDRGVS  48.  47.  48. 
Resequencing  DRG 121  12. 
NDRGVS  31.  24.  24.  27.  25.  28. 
Other  DRG 121  25.  66.  50.  40.  50.  42. 
NDRGVS  15.  14.  12.  13.  11. 
Appendix E-4: DRG 121 reasons for DRG assignment errors by patient 
demography 
Narrative  Resequencing  Other 
Age (years)  74.  69.  66. 
Sex (% male)  50.  100  50. 
LOS (days) 
Payment ($)  3843  3734  5486 
Mortality (%)  Appendix F-1: DRG 121 corrected relative weights

Relative  Bed size  Average-
weight  100  100-299  300+  Total 
Avera 
Paid  8454  8454  1 .8454  8454 
Correct  6092  7679  8172  7298 
Difference  2362  0775  0282  1156 
Total 
Paid  47.9800  46. 1350  46. 1350  140.2500 
Corrected  41.8392  44. 1975  45.4300  131.4667 
Diference  1408  9375  7050  7833 
(Percent)  (12.  (4.  (1.  (4. 
* Discharge weighted. 
Appendix F-2: DRG 121 corrected reimbursement 
Bed size  Average
100  100-299  300+  Total 
Avera 
Paid  656  167  439  082 
Correc  060  950  356  764 
Diference  596  217  318 
Total 
Paid  121 069  129,182  135,980  386,231 
Correct  92,899  82,677  75,613  255,757 
Diference  28,170  46,505  60,367  130,474 
(Percent)  (23.  (36.  (44.4) 
* Discharge weighted. Appendix F-3: DRG 121 estimated overpayments 
Fiscal Year  Reimbursement  Overpayment 
($ milion)  ($ milion) 
1984  259.  11.4
1985  487.  21. 
1986  567.  25. 
1987  590.  26. 
1988 est.  744.  32. 
1989 est.  852.  37. 
1990 est.  959.  42. 
Overpayment is calculated as 4.4 percent of reimbursement. 
Estimates based on linear regression.  Appendix G-1: Major Diagnostic Categories for discharges incorrectly 
assigned toDRG 121 
MDC  Bed size 
.:100  100-299  300+  Total 
05 
Circulatory 
Appendix G-2: DRGs frequently miscoded to DRG 121 
DRG  Bed size 
.:100  100-299  300+  Total  (Percent) 
122 
uncomplicated myocardial 
infarction  (33. 
123 myocardial infarction, expired  (20. 
138 arrhythmias  (13. 
140 angina  (20. 
other  (13. 
Total  (100.  1: DRG 121 clinical incidents 
Appendix H-
Number  Bed size  Weighted percentage 
(Percent)  oe100  100-299  300+  Total  Sample  Discharge  Hospital 
Unnecessary  0 (0.  0 (0.  0 (0.  (0.  (0.  (0. 
admissions 
Poor quality  1 (3.  1 (4.  0 (0.  (2.  (2.  (3. 
of care 
Premature  0 (0.  0 (0.  0 (0.  (0.  (0.  (0. 
discharge 
Appendix H-2: DRG 121 clinical incidents comparison 
Percent  Bed size  Weighted percentage
oe100  100-299  300+  Sample  Discharge  Hospital 
Unnecessary  DRG 121 
admissions  NDRGVS  12.  10.  10.  10.  11.
Poor quality  DRG 121 
of care  NDRGVS  11. 
Premature  DRG 121 
discharge  NDRGVS  0.4  1.4