Department of Health and Human Servces

OFFICE OF

INSPECTOR GENERAL

DRG 14 VALIDATION UPDATE:

SPECIFIC CEREBROVASCULAR

DISORDERS EXCEPT TRANSIENT

ISCHEMIC ATTACKS

AUGUST 199
 GEN 
OFFCE OF INSPECfOR 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95
452, as amended, is to protect the integrity of the Department of Health and Human 
Servces (HHS) programs as 
well as the health and welfare of beneficiaries served by 
those programs. This statutory mission is carred out through a nationwide network 
audits, investigations, and inspections conducted by three OIG operating components: 
the Office of Audit Servces, the Offce of Investigations, and the Office of Evaluations 
and Inspections. The OIG also informs the Secretary of HHS program and 
management problems and recommends courses to correct them. 
OFFCE OF AUDIT SERVICE 
The OIG's Office of Audit Servces (OAS) provides all auditing servces for HHS 
either by conducting audits with its own audit resources or by overseeing audit work 
done by others. Audits examine the performance of HHS programs and/or its 
grantees and contractors in carrng out their respective responsibilties and are 
intended to provide independent assessments of HHS programs and operations in 
order to reduce waste, abuse, and mismanagement and to promote economy and 
effciency throughout the Department. 
OFFCE OF INTIGATIONS 
The OIG's Office of Investigations (01) conducts criinal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 
and of unjust enrichment by providers. The investigative efforts of 01 lead 
to criminal 
convictions, administrative sanctions, or civil money penalties. The 01 also oversees 
State Medicaid fraud control units which investigate and prosecute fraud and patient 
abuse in the Medicaid program. 
AN 
OFFCE OF EVALUATION  INSPECfONS 
The OIG's Office of Evaluation and Inspections (OEI) conducts short-term 
management and program evaluations (called inspections) that focus on issues of 
concern to the Department, the Congress, and the public. The findings and 
recommendations contained in these inspection reports generate rapid, accurate, and 
up-to-date information on the effciency, vulnerabilty, and effectiveness of 
departmental programs.

Amy L. Lockwood of BOTEC Analysis Corporation prepared this report under the 
direction of Janet W. Knight, BOTEC Project Director, and David C. Hsia, OIG 
Project Officer. Contract information and project participants are listed in. Appendix 
to this inspection.
 Department of Health and Human Servces

OFFICE OF

INSPECTOR GENERAL

DRG 14 VALIDATION UPDATE:

SPECIFIC CEREBROVASCULAR

DISORDERS EXCEPT TRANSIENT

ISCHEMIC ATTACKS

AUGUST 199 OEI-12-89-O192
 EXECUTIVE  SUMMAR 

PUROSE 
This inspection reabstracted ona blided basis, the International Classifcation of 
Diseases, 9th Edition, Cliical Modication (ICD- CM) codes from a sample of 
Medicare discharges biled as diagnosis-related group (DRG) 14. It compared the 
resulting DRG to the hospital DRG for reimbursement 
changes. The sample was 
nationally representative and covered all of 1988, the most recent data available. 
Ths inspection updated two previous Offce of Inspector General (OIG) studies. For 
1984, the OIG found 15.5 percent errors among 355 reabstractions, improperly over-
mion. 
reimbursing hospitals by a projected $31.5  For 1985, the OIG found 15. 
percent errors among 217 DRG 14 reabstractions, over-reimbursing hospitals an 
estimated $56.5 millon. This inspection used a parallel methodology to make these 
studies statistically comparable. 
FIINGS 
DRG 14 coding error reduced: Of 145 discharges reabstracted for this inspection
, 1.4 
percent had coding errors. Ths proportion statistically significantly improved over the 
15.5 percent for 1984 and the 15.8 percent for 1985. This proportion also statistically 
significantly improved over the 14.7 percent error rate previously reported for all 1988 
DRGs. This inspection s low proportion of errors precluded identifng risks by 
hospital or patient demography. 
Financial impact of DRG 14 coding error reduced: Ths inspection projected that 
DRG 14 under-reimbursed hospitals a nonsigncant $9.3 mion. Ths result 
contrasts with the statistically significant $31.5 milion over-reimbursement of the 1984 
Inspection and $56.6 milion over-reImbursement of the 1985 Study. 
AGENCY COMMNT 
In its June 10, 1992 comments to the draft of this inspection, the Health Care 
Financing Administration (HCFA) concurred with the OIG' s fidings. The HCFA 
made several techncal comments. Based on these comments, the OIG made changes 
to this report. The full text of the HCF A comments appear as an appendix.  ....  
. .. 
. . . . . . . . . . . . . . ..  ...   ...   ...  . . . . ..  ...   ....    ....    ....    ....    ....    ....    ....  .  .. ..  .  .. ..  .  ... .   . ... .   . ... .   . ... .   . ... .   . ... .   . ... .   . ... .   . ... .   . ... .   . ... .  . . ...  .   .. ... .    . .....      ......     ... ..   .......  ...    
. . . . . . ..  ..  ..  ...   ...   ....    .....     .....     .....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    .....     ....   . ... .   ....     ....    ....    ....    ...   ...   ....  
TABLE OF CONTENTS

EXECUTIV SUMMAY 
TABLE OF CONTNTS. . . 
INODUCTION. . 
BACKGROUND 
METHODOLOGY  ..................................... 2 
SAMLE REPRESENTATIVENESS ....................... 2 
FINDINGS 
DRG 14 CODING ERROR REDUCED. 
DRG 14 OVER-REIMURSEMENT ELIMINATED. . . . . . . . . .. 
REASONS FOR DRG CODING ERROR RAOM 
ENDNOTES 
Appendix 1: Project participants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7 
Appendix 2: ICD- CM codes in DRG 14 ......................... 9 
Appendix 3: Sample representativeness 
Appendix 4: DRG 14 coding errors by hospital and patient demography, 
1984-1988 ................................................ 
Appendix 5: Coding errors by hospital and patient demography, 1988 . . 
Appendix 6: Financial effect of coding errors, 1985-1988 . . . . . . . . . . . . 
Appendix 7: HCFA comments  INTRODUCTION

BACKGROUN 
As a principal diagnosis, 11 International Classification of Diseases, 9th Edition 
Clinical Modification (ICD- CM) codes group to diagnosis-related group (DRG) 14. 
These ICD- CM codes identify disorders involving strokes or cerebrovascular 
accidents. A stroke occurs because of a blockage in the blood supply to the brain. 
The subsequent loss of brain cells may cause weakness, paralysis, loss of sensation, and 
cogntive disturbances. Three pathologies account for most of these blockages.

(Appendix 2). 
THOMBOSIS  A blood clot forms in an artery of the brain. 
EMBOLUS  A blood clot forms elsewhere in the body, usually the heart or 
neck, and travels to the brain. 
HEMORRHAGE A weak point in a brain artery allows blood to leak out. 
Since 1985, the Health Care Financing Administration (HCFA) has made no title 
code, or hierarchy changes to DRG 14. Its Relative Weight has undergone downward 
adjustment because of decreased resource consumption, from 1.3386 in 1985 to 1.2429 
in 1988. 
In previous studies from the Office of the' Inspector General (OIG), U.S. Department 
of Health and Human Servces (HHS), DRG 14 had a disproportionately high rate of 
coding errors. Proper selection of ICD- CM codes would have grouped these 
discharges to DRGs with lower average Relative Weights. Ths significant over-
reimbursement to hospitals, DRG 14's high Relative Weight, and its apparent 
vulnerabilty to miscoding invited OrG attention. 
In 1988, the OIG released its inspection of 355 DRG 14 discharges from 10 
hospitals during 1984.  The reabstraction of medical records found a 15.5 
percent errors. Exrapolating the financial impact of these errors to the 
national population, the study estimated that DRG 14 errors caused $31.5 
milion in over-reimbursement to hospitals. 
In 1987, the OIG released its National DRG Validation Study, that reabstracted 
a sample of medical records representing all prospective-payment system 
The 1985 Study included 217 DRG 14 reabstractions 
discharges during 1985. 
with 15.8 percent errors. Upon national projection, these DRG 14 errors over-
reimbursed hospitals an estimated $56.5 milion. 
This inspection updated the 1984 and 1985 data with medical records from calendar 
year (CY) 1988, the most recent data available. It used a parallel methodology to  make these studies statistically comparable. 
METHODOLOY 
This inspection randomly selected 145 DRG 14 discharges from 144 hospitals. The 
study population consisted of the 331 550 DRG 14 Medicare reimbursed discharges for 
CY 1988. The design excluded discharges from specialty institutions such as children 
hospitals, tuberculosis units, and psychiatric facilties. It also excluded discharges in 
Maryland and New Jersey, which the PPS stil exempted in 1988. It excluded bils for 
pediatric, obstetric, and psychiatric DRGs (principally drug and alcohol rehabiltation 
performed by a general hospital). 
The OIG requested that hospitals send complete copies of the sampled medical 
records to the OIG's contractor, Health Data Institute (HDI) of Lexington 
Massachusetts. It followed-up missing records and issued subpoenas to compel the 
cooperation of four hospitals. 
The OIG contracted with the American Medical Record Association (AMRA) to 
AM 
reabstract the charts. The  selected the ICD- CM codes supported by the 
record, determined the principle diagnosis, and grouped to select the correct DRG. 
To assure that the original ICD- CM codes and DRGs did not affect this 
reabstraction, the AMRA coders conducted their work without knowledge of the 
original ICD- CM codes and DRGs. The coders had 
instructions not to treat 
marginal problems or honest differences in judgement about appropriate coding 
DRG errors. This standard should have produced a conservative estimate of the 
proportion of discharges having DRG errors. A series of reliabilty checks verified the 
reproducibilty and accuracy of the AMRA coding. 
BOTEC Analysis Corporation of Cambridge, Massachusetts (BOTEC) edited the 
database, checked the sample s representativeness, and conducted statistical analyses 
of the correlates and financial consequences of DRG 14 miscoding. 
REPREENTATI 
SAMLE 
The sample accurately represented the characteristics of the underlying 
population of 
discharges. (Appendix 3). 
Distributed by hospital demography, it did not differ from the DRG 14 population in 
bed size, teaching status, metropolitan location, or control. (Figure 1). 
Distributed by patient demography, it did not differ by age, sex, or race. (Figure 2).  '--
,-- 
Bed size  Teaching status 
Teaing 
Teaing 
Nontein 
Noeaing 
Sample  Population  Saple  Population 
Loction  Control 
Metrit  r: 
Prof 
Prof 
Nonpr  Nonpr 
Nomepolt 
Population 
SamplAe  ge 
Saple  Populaton 
Figue 1: Sample representativeness by hospital demography, 1988
Sex 
6674  Mal 
6674  Mal 
85+ 
Female 
Femal 
Sample  Population  Sample  Population 
Race 
Grop 
D White

. OBlactk 
12 Unknow 
Sample 
Population 
Figue 2: Sample representativeness by patient demography, 1988  FINDINGS

DRG 14 CODING EROR REUCE 
Percent 
Of the 145 sample discharges, only 1.4 
percent had coding errors that changed 
Yea
their reimbursement from DRG 14. 
1984 
This proportion significantly improved 
1985 
over the 15.5 percent errors for 1984

1988 
and the 15.8 percent errors for 1985.

(Figure 3). 
This inspection s low proportion of

errors precluded identifng risks by

DRG 14  All DRGs 
hospital or patient demography. 
However, the improvement in coding  Figue 3: Proportion of discharges with DRG
accuracy remained significant across all  coding errors, DRG 14 and all DRGs
, 1984
hospital and patient demographic 
1988 
categories. (Appendix 4). 
This inspection s 1.4 percent DRG 14 errors also signficantly improved over the 14. 
percent errors previously reported for all 1988 DRGs. Additionally, DRG 14'
s 14.3 
percent improvement in coding accuracy between 1985 to 1988 significantly exceeded 
all DRG's 6.1 percent improvement. This difference also remained significant across 
/ all hospital and patient demographic categories. (Appendix 5). 
DRG 14 OVER-REIMURSEMENT 
ELIATED 
$ milion

The 145 sample discharges all originiHly 
received a Relative Weight of 1.2429

equivalent to $3 797 (assuming an 
-20

average Standardized Amount of

-30 
055). This Relative Weight did not

difer significantly from the 1.2521 case-

mix index (CMI) after AMRA  -SO

reabstraction, equivalent to $3 825. In 
-60

contrast, for 1985 DRG 14 reabstraction  198  1985
 1988
identified significant over-reimbursement

Figue 4: Financial impact of miscoding

to the hospitals. Hospital and patient 
demography did not affect these results.  DRG 14, 1984-1988

(Figure 4).

Extrapolating the 1988 CMI change to all 331 550 DRG 14 bils, miscoding under-
reimbursed hospitals a nonsignificant $9.3 milion. This result differs significantly from  the $31.5 milion over-reimbursement reported for 1984 and the $56.6 milion over-
reimbursement estimated for 1985. (Appendix 6). 
DRG 14 accounted for 13. 8 milion in net under-reimbursement 
3 percent of the $69.
for all DRGs in 1988. . 
REONS FORDRG CODING ERROR RANOM 
Only two of the sample discharges grouped to other DRGs after AMRA reabstraction. 
One case failed to attest to the traumatic 
causation of the cerebral event while the 
other appears to be a clerical error, substituting DRG 14 for DRG 148. No systematic 
miscoding appeared among the sample s bils. 
The sample size sufficed to establish that DRG 14 no longer has significant miscoding, 
but could not identify any patterns by hospital or patient demography. To determine 
demographic trends would require a sample of approximately 2,500 medical records. 
The nonsignificant proportion of coding errors does not warrant such a study.  ENDNOTE

1. Purvs T, Carlson R, Fagan A, Jew M, Stewart S, Brown F, & Gannon C. Validation of 
DRG 14. San Francisco, CA: HHS Office of Inspector General, 1988. Inspection no. OAI
09-86-00052. 
2. Delaney AM & Hsia DC  eds.  NationalDRG Validation Study. Lexington, MA:Health 
Data Institute, 1987. Contract HHS-l00-87-0015. 
3. Knight JW & Hsia DC, eds. National DRG Validation Study Update: Technical Report. 
Washington, DC: HHS Office of Inspector General, 1992. Inspection no. OEI-12-90-00191.  Appendix 1: Project participants 
OIG

Cathaleen A Ahern, B.

Evan J. Buckigham, B.A.

David C. Hsia, J.  , M.  , M.

Thomas F. Komaniecki, M.

W. Mark Krshat, M.

Linda M. Moscoe, B.A.

Brian P. Ritchie, B.

Barr L. Steeley 
John M. Traczyk, B. 
HCFA

Timothy F. Greene, M.A., M.

Stephen F. Jencks, M.

Michael R. McMullan, M.B.A.

Harr L. Savitt, Ph.

Jeanette M. Smith, M.D., M.

Malcolm A Sneen. B.S. 
RAN 
Corporation

Haya P. Rubin, M.  , Ph.

Baxer-Health Data Institute

Patricia J. Baxer, R.

Patricia Cassidy-Tsnosas, R.

Annette M. Delaney, R.  , M.

Ellen B. Inghileri, R.

Janet Mathews, AR.

Laurie H. Moore, R.

Claire Shannon, A.

Michele A Wiese, B.

AMRA

Margret K. Amatayakul, M.B.A., R.

Mary Converse, R.

1. Now at Health Audit Servces, Ellcott City, MD. 
2. Now at the Journal of the American Medical Association, Chicago, IL. 
3. Now at Johns Hopkins Medical Institutions. 
4. Ceased operations February 16, 1990.  Nicholas J. Cotsonas, M.

Linda Ertl, R.

Rita M. Finnegan, R.

Desla Mancila, A.

Barbara Manny, R.

Sonia Martiuk, R.

Toula Nicholas, A.

Charlotte Razor, R.

LouAn Schraffenberger, R.

Lyn Smetko, R.

Dawn Smith, A.

Joan Zacharias, A.

BOTEC Analysis Corporation 
Geraldine M. Berenholz, R. 
Andrew H. Chalsma, B. 
David P. Cavanagh, M.  , Ph. 
Janet W. Knight, R.  , Ph. 
Amy L. Lockwood, B.A. 
Contract information

Contractor 
BOTEC Analysis Corporation 
1698 Massachusetts Avenue 
Cambridge, MA 02138 
Project Officer

David Hsia, J.D., M.  , M. 
Offce of Inspector General 
330 Independence Avenue 
Washington, D.C. 20201 
Contract 
HHS:- 100-90-0023 
Firm-fixed price contract 
$203 257 
5. Outside contractor.  Appendix 2: ICD- CM codes in DRG 
430 
Subarachnoid hemorrhage
431 
Intracerebral hemorrhage 
432.  Nontraumatic extradural hemorrhage 
432. 1 Subdural hemorrhage 
432.  Intracerebral hemorrhage, not otherwse specified 
434.  Cerebral thrombosis 
434.  Cerebral embolism 
434.  Cerebral artery occlusion, not otherwse specified 
436 
Cerebrovascular accident 
437.  Nonruptured cerebral aneurysm 
784.3 Aphasia
 Appendix 3: Sample representativeness 
Number (percent)  Population  Sample  Chi-square 
Hos  ital demo 
99 beds  645 (15.  29 (20.  , 2 df, P=0.640 
100-299 beds  125 856 (38.  50 (34.5) 
300+ beds  156 016 (47.  66 (45. 
Metropolitan  249 967 (75.4)  108 (74.  , 1 df, P=0. 150 
Nonmetropolitan 81 583 (24.  37 (25. 
Teaching  131 367 (39.  54 (37.  , 1 df, P=0.372 
Nonteaching  200 183 (60.4)  91 (62. 
Profit  954 (10.  , 2 df, P=0.020 
14. (9.

Nonprofit  292 022 (89.  131 (90.3) 
Patient demo 
64 years
 769 (4.  5 (3.4)  3.4, 3 df, P=0.658 
65-74 years  109 174 (32.  36 (24. 
75-84 years  137 898 (41.6)  68 (46.

85 + years  709 (21.3)  36 (24. 
Male  139 865 (42.  51 (35.  , 1 df, P=0.835 
Female  191 685 (57.  94 (64. 
White  280 550 (84.  131 (90.  , 3 df, P=0.559 
Black  600 (11.0)  9 (6. 
Other  144 (1.6)  2 (1.4) 
Unknown  256 (2.  3 (2. 
Total  331 550 (100.  145 (100.  not applicable
 Appendix 4: DRG 14 coding errors by hospital and patient demography, 1984-1988 
Proportion :t  1984  1985  1988 
standard error (n) 
Hospital demography
1..99 beds 20.
0:t 13.3 (10)  30.8 :t 5.3 (78)  3.4 :t 3.4 (29) 
100-299 beds 17.1 :t 4.2 (85) 13.4 :t 4.2 (67)  0 :t 2.0 (50) 
300+ beds 14.
6 :t 2.2 (260)  12.5 :t 3.9 (72)  0 :t 0.0 (66) 
Metropolitan  13.2 :t 3.4 (133)  9 :t 0.9 (108) 
Nonmetropolitan  26. 1 :t 10.1 (84)  7 :t 2.7 (37) 
Teaching  10.5 :t 3.5 (61)  0 :t 0.0 (54) 
Nonteaching  15.4 :t 3.3 (156)  2 :t 1.5 (91)

Profit  9 :t 2.3 (16)  0 :t 0.
0 (14) 
Nonprofit  16.4 :t 2.7 (201)  1.5 :t 1.1 (131) 
Patient demography 
65 years
 2 :t 2.6 (14)  0 :t 0.0 (5) 
65-74 years  13.5 :t 4.7 (78)  6 :t 3.9 (36) 
75-84 years  19.9 :t 4.3 (85)  0 :t 0.0 (68) 
85 + years  21.9 :t 9.5 (40)  0 :t 0.0 (36) 
Male  14.2 :t 3.9 (103)  0 :t 0.0 (51) 
Female  18.2 :t 3.6 (114)  1 :t 1.5 (94) 
White  1.5 :t 1.1 (131) 
Black  0 :t 0.0 (9) 
Other  0 :t 0.0 (2) 
Unkown 
0 :t 0.0 (3) 
Total  15. 1 :t 1.9 (355)  15.8 :t 2.6 (217)  1.4 :t 1.0 (145) 
1988 difference  14. 1 (8.0 to 20.  14.3 (8.0 to 20.6) NA 
(95% CI)  Appendix 5: Coding errors by hospital and patient demography, 1988 
Proportion :t  DRG  All DRGs 
standard error (n) 
Hospital demography
99 beds 
3.4 :t 3.4 (29)  17.0 :t 2.0 (359) 
100-299 beds 2.0:t 2.0 (50)  14.9 :t 1.2 (893) 
300+ beds 0.
0:t 0.0 (66)  13.9 :t 1.0 (1199) 
Metropolitan  9 :t 0.9 (108)
 14.9 :t 0.8 (1845) 
Nonmetropolitan  7 :t 2.7 (37)
 14.4 :t 1.4 (606) 
Teaching  0 :t 0.0 (54)
 15.5 :t 1.1 (1008) 
Nonteaching  2 :t 1.5 (91)
 14.2 :t 0.9 (1443) 
Profit  0 :t 0.0 (14)
 17.3 :t 2.3 (272) 
Nonprofit  1.5 :t 1.1 (131)
 14.4 :t 0.8 (2179) 
Patient demography 
65 years 0.0 :t 0.0 (5)  16.4 :t 2.4 (232) 
65-74 years 5.6 :t 3.9 (36)  14.9 :t 1.1 (1007) 
75-84 years 0.0 :t 0.0 (68)  14.6 :t 1.2 (854) 
85 + years 0.0 :t 0.0 (36)  13.4 :t 1.8 (358) 
Male  0 :t 0.0 (51)  14.5 :t 1.1 (1094) 
Female  1 :t 1.5 (94)  14.9 :t 1.0 (1357) 
White  1.5 :t 1.1 (131)  14.8 :t 0.8 (220) 
Black  0 :t 0.0 (9)  14.4 :t 2.6 (188) 
Other  0 :t 0.0 (2)  14.3 :t 6.0 (35) 
Unknown  0 :t 0.0 (3)  7 :t 6.
0 (23) 
Total  1.4 :t 1.0 (145)  14.7 :t 0.7 (2451) 
Difference 
13.3 (7.5 to 19. 
(95% CI)  Appendix 6: Financial effect of coding errors, 1985-1988 
DRG  All DRGs 
1985  1988  1988 
CMI 
Before  1.3386 :! 0.0000  1.2429 :! 0.0000  1.3080 :! 0.0166 
After  1.2383 :! 0.0299  1.2521 :! 0.1742  1.3104:! 0.0186 
Change  1003 :! 0.0299  0092 :! 0.1742  0024 :! 0.0352 
(95% CI)  (0.0601 to 0.1121)  2506 to 0.2322) 
Before  3542 :! 0  3797 :! 0  3996 :! 51 
Afer  3277 :! 79  3825 :! 532  4003 :! 57 
Change  265 :! 79  28 :! 532  7 :! 108 
Bils 191
654  331 550  506 361 
$ milion change -56.  9.3  69. 
Difference 
CMI  1095  0068 
Mean $  293 
Total $ milion  60.  60.4  Appendix 7: HCFA comments  Health Care

DEPARTMENT OF HEALTH & HUMAN SERVICES 
Financing Administration 
I 0 19  Memorandum 
'r 
Dot' 
Actg Admini trator 
From 
OIG Draf Report: ''DRG 14 Valdation Study Update: Specifc Cerebrovasular 
Subject 
Disorders Oter Than Tranient Ischemic Attcks " OEI-12-89-O192 
Inpector General

Ofce of the Secreta 
We have reviewed the subject draf report which exaes the codg accuracy 
of prospective payment dicharges biled as Diagnosis Related Group (DRG) 14. In 
previous studies, the Ofce of Inpector General (OIG) sapled DRG 14 and found 
upcodg that resulted in over-reimburement to hospita of $31.5 mion in 198 
5 mion in 
and $56. 1985. 
The fidigs of th report show a signcat improvement in codg accuracy 
for DRG 14: from a litte over 84 percent in 1984 and 1985, to 98.6 percent in 198 
The few remaig codg errors no longer result in sytematic over-reimburment of 
hospita. Consequentl, thi report conta no recommendations for fuher acton. 
The Health Cae Financing Administration is pleased with OIG' s fidigs. 
are in agreement with the report and have only a few brief comments for fuher 
consideration by OIG. 
Than you for the opportty to review and comment on thi draf report. 
Please adve us whether you agree with our comments on the report at your earliest 
convenience. 
Attachment  Comments of tilealth Care Financing Administration (HCF A)

on OIG Draft Report: "DRG 14 Validation Study Update:

Specifc Cerebrovascular Disorders Other Than

Transient Ischemic Attacks." OEI-12-89-00192

Technca Comments

Pages 2 and 3. The series of  dicult to read because of their 
graphs on these pages are 
smal siz. We recommend increasing their siz in the fial report. 
Eliated" 
Page 4, 'DRG 14 Over-Reimburement  section. It is not clear how the 
followig underlied statements were assumed: 
al origial 
The 145 sample dicharges  received a Relative Weight of 
Th  dier 
2429,  equtYent to  797.  Relatie Weight did nAot M 
signcantl from the 1.2521 cae-mi index (CMI) afer  re
equtYent to $3.
abstraction, 
The relatie weight is a constat multiplier, but the multiplicad vares accrding to each 
th 
hospita' s specic porton. We understad there were 144 hospita in  study. 
Therefore, the origi of these values should be explaied as an average, median mean 
or actual figue, as appropriate. 
RR 
Page 8, Appendix 1. Project parcipant Rita Finegan  is now a self-employed 
AM 
ART, is no longer employed by  her 
consultat. Parcipant Delsa Mancila, 
curent position is not known.  ' / / ;	 ,(
9203301330 
"""" O
 OBA: ACTION

DEPARTMENT OF HEALTH &. HUMAN SERVICES cc :Hudson;AAO :AACbtf.ce of Inspector General 
OLP:MB:OPHC:AA:AAC: Means; Somsak; Schmidt; Thomas

4"'"  Memorandum 
p 3 0 	 ADMINISTRATOR SIG. DUE  4/2SIIQ 
Date 
1Z1 
Richard P. Kusserow 

From  Inspector General 	
12-
alidation study Update: Specific 
DRG 14 
OIG Draft Report: 

Subject  Cerebrovascular Disorders other Than Transient Ischemic 
Attacks, " OEI-12-89-00192 
J. Michael Hudson

Acting Administrator

Health Care Financing Administration

Attached is a draft inspection report on the coding accuracy

of prospective payment discharges billed as diagnosis-related

group 
(DRG) 14. 
In two previous studies, the Office of Inspector General (OIG) 
reabstracted the ICD-9-CM codes from samples of DRG 14 bills 
on a blinded basis and found upcoding that over-reimbursed 
hospitals $31. 5 million in 1984 and $56. 5 million in 1985. 
The attached report updates the previous studies by applying 
the same methodology to a nationally representative sample of 
1988 discharges, the most recent year for which data were
available. 
These inspections find a significant improvement in DRG cOding 
accuracy from 84. 5 percent in 1984 and 84. 2 percent in 1985 to
1988. 
98. 6 percent in  The few coding errors no longer 
This report, 
systematically over-reimburse the hospitals. 
therefore, makes no recommendations. 
We would appreciate receiving your comments on the draft 
report within 30 days of the date of this memorandum. The OIG 
briefed your staff about these inspections on October 31, 
1991. 
If you have any questions about this report, please call me or

Michael Mangano, Deputy Inspector General for Evaluation and

Inspections, or have your staff contact Penny Thompson at

FTS 646-3138. 
Attachment  Departent of Health and Human Servces

DRG 14 VALIDATION UPDATE:

SPECIFC CEREBROVASCULA

TRSIENT

DISORDERS EXCEPT 
ISCHEMIC ATIACKS

DRA RESTICT 
NOTCE -THIS  TO OFFCIA USE 
This doumnt is a drft repo of th Ofce of Insctor General and is subject to
reion; therefore, recriieent  of th drft shoul not diclose it contents for purses 
unr 
other than for offcial  and commnt  any cirumances. This draft and 
all copies thereof remain th propert of, and mut be retued on demand to, the 
Offce of Inspector GeneraL 
MACH 199  12-8192 
OEI- EXECUTIVE  SUMMAR 
PURE 
Ths inspection reabstracted on a blided basis, the International Cassifcation of 
Clcal 
Diseases, 9th Edition,  Modifcation (ICD- CM) coes from a sample of 
Medicae dicharges biled as diagnosis-related group (DRG) 14. It compared the 
resulting DRG to the hospita DRG for reimburment changes. The saple was 
nationall representative and coered al of 1988 the most recnt data avaiable. 
Th 
inpection updated two prevous Ofce of Inpector Genera (OIG) studies. For 
1984, the OIG found 15.5 percent errors among 355 reabstractions, improperly over-
reimbursing hospitals by a projected $31.5 miion. For 198, the OIG found 15. 
percent errors among 217 DRG 14 reabstractions, over-reimbursing hospitals an 
5 millon. Ths inspection used a parallel methodology to make these 
estimated $56.
studies statistically comparable. 
FIINGS 
DRG 14 codini error reduced: Of 145 discharges reabstracted for this 
inspection, 1.4 
percent had coding errors. Ths proportion statistically signifcantly improved over the 
15.5 percent for 1984 and the 15.8 percent for 1985. This proportion also statistical1y 
significantly improved over the 14.7 percent error rate previously reported for all 1988 
DRGs. This inspecdtione s mlow poropgortriona opf erhrorsy pr.ec luded identig risks by 
hospital or patient 
Financial impact of DRG 14 codini error reduced: This inspection projected that 
DRG 14 under-reimbursed hospitals a nonsignifcant $9.3 mion. Ths result 
contrasts with the statistically signcant $31.5 mion over-reimbursement of the 1984 
Inspection and $56.6 mion over-reimbursement of the 1985 Study.