DRG 468: UNRELATED OPERATING 
ROOM PROCEDURES 
RICHARD P. KUSSEROW 
INSPECTOR GENERAL 
OAI-12-801170 
SEPTEMBER 1989  !..
OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG) is to promote the effciency, effective
ness, and inregrity of programs in the United States Deparent of Health and Human Ser
vices (HS). It does this by developing methods to detect and prevent fraud
, waste, and 
abuse. Created by statute in 1976, the Inspector General keeps both the Secreta and the Con
gress fully and currently informed about programs or management problems and recommends 
corrective action. The OIG performs its mission by conducting audits, investigations, and in
spections with approximately J ,300 staf strategically located around the countr. 
OFFICE OF ANALYSIS AND INSPECTIONS 
This repoI1 is produced by the Offce of Analysis and Inspections (OAI), one of the three 
major offices within the OIG. The other two are the Offce of Audit and the Offce of Investi
gations. The OAI conducts inspections which are, typically, shoI1-term studies designed to de
termine program effectiveness, effciency, and vulnerability to fraud or abuse. 
Entitled "DRG 468: Unrelated Operating Room Procedures " this inspection was conducted 
to analyze the characteristics of discharges paid as DRG 468. The repoI1 was prepared by 
BOTEC Analysis of Cambridge, MA under contract HHS-lOO-88-0019 and the Offce of Anal
ysis and Inspections, Health Care Branch. The following people panicipated in this project. 
David Stone, M.A, BOTEC Analysis

Marcia Meyers, M.PA. , BOTEC Analysis

Mark Kleiman, PhD , BOTEC Analysis

Jeremy Schutte , BOTEC Analysis

Fiona Lee, MEd. , BOTEC Analysis

David Hsia , JD., MD., M.PH., Health Care Branch

Mark Krushat, M.P.  , Health Care Branch
 Contract Information

Contractor

Project Officer 
BOTEC Analysis Corporation

David Hsia , M.  , M. P.H. 
, J. 
36 JFK Stret
 Health Car Brach 
Cambridge, MA 02138  Offce of Inspector General 
330 Independence Ave. , SW 
Contract  Washington , D. C. 20201 
HHS-l00-88-0019  EXECUTIVE SUMMARY
BACKGROUND 
Diagnosis related group (DRG) 468 pays for discharges in which the patient undergoes an 
operating room procedure unrlated to the principal diagnosis occasioning the admission. 
This inspection reabstracts a sample of DRG 468 bills to measur their accuracy. 
FINDINGS 
Of discharges paid as DRG 468, 24.8 percent should have been assigned to another 
DRG. This rate significantly exceeds the 18.6 percent for al DRGs. 
In 83.8 percent of these errors hospitals overpaid themselves, a significantly higher rate 
than the 59.7 percent for all DRGs. These errors project to an estimated $140.3 million 
in Fiscal Year 1990. 
Physicians caused 40.4 percent of assignment errors by mis-specifying the patients 
principal diagnoses or procedures. 
3 percent of incorrect bils, the medical records depanment assigned the wrong 
In 32.
ICD- CM codes to correctly specified procedurs or diagnoses. This rate of coding 
errors significantly exceeded the 12.2 percent for all DRGs. 
Durng their second scope of work, the peerreview organizations (PROs) identified 
1.74 percent of DRG 468 bills as being unnecessar admssions. For a comparble 
cycle, SuperPRO identified 14. 0 percent of DRG 468 bils as unnecessar admssions. 
The third scope of work reduces PRO reviews ofDRG 468 bills from 100 percent to 50 
percent. The PROs  did  not actualy review 100 percent of DRG 468 bils durng their 
second scope of work. 
RECOMMENDATIONS 
The Health Care Financing Admnistration (HCFA) should determine why PRO 
oversight of DRG 468 discharges identifies a lower rate of misclassifications than 
SuperPRO. 
The HCFA should determne why SuperPRO identifies a lower rate of 
misclassifications than this study. 
The HCF A should continue 100 percent review of DRG 468 bils.  .................................. .
. . . . .....     ......      ......      ......      .......       .......       .......       .......       ........        .........         .........         ...........           ...........           ............            ............            .............             .............             .............             .............             .............             .............             .............             .............             .............             ..............              ..............              ..............              ..............              ..............              ...............               .................                 .................                 .................                 ..................                  ....................                    ....................                    ....................                    ....................                    ....................                    .....................                     .....................                     .....................                     .....................                     .....................                     ....................                    ....................                    ....................                    ....................                    ....................                    ....................                    ....................         .........
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
INTRODCCTION ......................................................

Background. . . . . 
PPS vulnerabilities. . . . . . . . . . . . . 
Claims processing
DRG 468 ...........................................................

Methodology. . . . . 
FINDINGS. . . . 
Sample characteristics. . . . . . . . . . . . 
Assignment errors 
Dirction of errors. . . . 
Source of errors. . 

Reasons for assignment errors. . 

Financial effects. . . . . . . . . . . 
. . . . . . . 11 
Corrct DRG assignments. . . . . 
Clinical review results. . . . . 
RECOMMENDATIONS............................................... .
Appendix A-I: DRG 468 dischares from al PPS hospitas. . . 
Appendix A-2: DRG 468 sampling fram 

Appendix A-3: DRG 468 hospital demography. . . . . . . . . . 
Appendix A-4: DRG 468 hospita demogrphy comparson. . . . 
Appendix A-5: DRG 468 patient demography. . . . . . . . . . 
Appendix A-6: DRG 468 comparson of patient demogrphy. . . 
Appendix B- DRG 468 assignment accuracy. . . . 
Appendix B- DRG 468 assignment accuracy comparson
Appendix B-3: DRG 468 assignment accuracy by patient demography  ............................................... .
. ... . .. .. .. . .. . 
............................................... .
. ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ..  ....    ....    ....    ....    ....    ....    ....    ....    .....     .....  .   ... ....   .    ... .....   .     ... ......   .      ... ......   .      ... ......   .      ... ......   .      ... ......   .      ... ......   .      ... .......   ..       ...  .......   ..       ...  .........   ..         ...  .........   .. .        ...  . .........   .. .         .. . . .........  . . .         .. . . .........  . . .         .. . . .........  . . .         .. . . .........  . . .         .. . . .........   .. .         ...  . .........   .. .         ...  . .........   .. .         ...  . .........   .. .         ...  . ............
Appendix C-l: DRG 468 diction of errors by hospital demogrphy. . . 
Appendix C-2: DRG 468 diction of errrs comparson 
dition of 
Appendix C-3: DRG 468  errrs by patient demogrphy

Appendix D-I: DRG 468 hospital depanment makng errors
Appendix 0-2: DRG 468 hospital depanment makng errrs comparson
Appendix D-3: DRG 468 hospital deparent makng errors by patient 
demogrphy. . . 
Appendix E- DRG 468 reasons for errrs. . 
l : 
Appendix E- DRG 468 reasons for errrs by hospital demogrphy 
Appendix E- DRG 468 reasons for errors comparson. . . 
Appendix E- DRG 468 reasons for errrs by patient demogrphy. . . 
DRG 468 corrected relative weights 
Appendix  l: 
DRG 468 correcte reimburement. . . . 
Appendix  2: 
Overpayment projection. . . . . . . . . . . . . . . 
Appendix  3: 
Appendix G- for discharges incorrectly assigned to 
I: Correct  MDC 
DRG 468 
Appendix G-2: Correct DRG for discharges incorrectly assigned to 
DRG 468 
Appendix H-l: DRG 468 clinical review. . . . 
Appendix H-2: DRG 468 cliical review comparson. . . . 
Appendix I: HCFA commnts  INTRODUCTION 
BACKGROUND 
On October I , 1983, the Health Car Financing Admistration (HCFA) began implementing a
new system of payment for inpatient hospital services under the Medcar program. The new
prospective payment system (PPS) replaced the cost-based reimbursement system. Congrss
mandated this change because of rapid growth in health care costs, panicularly inpatient ex 
penses under Medicare. 
Under PPS, hospitals received a pre-established payment for each discharge, based upon the 
diagnosis related group (DRG) to which the discharge is assigned. PPS classifed discharges
inro clinically coherent groups which used simlar amounts of hospital resources, based on 
varables such as diagnosis; evaluation and tratment procedures; and patient age, sex
, and dis 
charge status. Each of the 473 DRGs had an associated relative weight, which represented the 
average cost for hospital care provided to patients with diagnoses grouping to that DRG as a 
propoI1ion of the cost of the average patient. The hospital received this payment, independent 
of the actual length of hospitalization or cost of tratment for the individual patient. The hos 
pital retained any surplus from patients consuming less than the expected amount of resources, 
and suffered losses on those patients consuming more. 
The shift from cost-based, retrospective reimburement to prospective payment constituted 
one of the most dramatic changes in health care reimbursement since the creation of Medicare.
A fixed payment per discharge induced hospitals to inplement economies and reduce unneces 
sar 
services. The total payments to the hospitas provided the same financial resources for pa 
tient car. In effect, PPS reverse the financial incentives for hospitals. Where the
cost-reimbursement system rewarded longer hospita stays and more costly treatments, PPS re-
warded earlier discharges and less costly procedurs. One of the first consequences of the 
new payment system was a drop in average length of hospita stay for Medicar patients. 
P PS vulnerabilities

The advent of PPS created new oppoI1unities for manipulation or "gamng" to increase hospi 
tal revenues frm Medicar patients. To protect the integrty of PPS and maitain quality of 
care Congress established the peer review organizations (PROs) to monitor hospital activities. 
The Office of the Inspector General (OIG) conducted the National DRG Validation Study to 
surey the general accuracy of DRG assignment and quality of car performed by hospitals 
under PPS. Its examation of 700 medcal reords and established that assignment errors re 
sulted in $300 million in overpayments to hospitas and that the majority of overpayments 
could be trced to assignment errrs affecting a small number of DRGs. This repoI1 is one in  examing assignment accurcy of one of the DRGs identified as having the highest 
a series 
impact on overpayments under PPS and the gratest potential for cost recovery. 
The PPS gaming takes two principal forms: optimization and creep. "
Optimization" strate 
gies adhere to coding rules, but maxinize hospital reimbursements by selecting the most ex-
pensive among viable alternative principal diagnoses or adding more secondar diagnoses. 
The PPS permts optimization, which flows from the basic incentive strcture of the PPS sys 
tem. 
DRG creep" results from codng practices which do not conform to codng rules. Sources of 
DRG creep include: 
The attending physician wrtes an incorrect principal diagnosis 
Misspecification: 
(defined by the Uniform Hospital Discharge Data Set (UHDS) as "that condition 
established after study to be chiefly responsible for occasioning the admission of the 
patient to the hospital for care  ), secondar diagnoses, or procedures on the attestation 
sheet. 
The hospital assigns incorrect numeric codes to diseases or procedurs
Miscoding: 
correctly attested to by the attending physician.
The hospital substitutes a seconda 
Resequencing:  diagnosis for the corrct principal 
diagnosis. 
Auditing and review practices seek to cunail ilegal creep by identifying discharges in which
coding rules are misapplied or ignored. 
Claims processing 
Under PPS, the hospita fies a clai for Medicare reinbursement upon discharging the benefi 
ciar. At the tie of discharge, the attending physician attests to the pricipal diagnosis which 
caused the patient s 'admssion to the hospita, seconda diagnoses , and procedures (diagnos
tic and therapeutic) provided. The hospital trslates the nartive diagnoses of the 
physician s attestation statement intO numeric codes based on the International Classification
of Diseases, Ninth Revision, Clinical Modcation (lCD- CM), and prepars a claim. Fiscal 
intermediar (F organizations, working under contract with HCFA, enter the hospital' s codes 
progr 
into the GROUPER computer  which assigns the appropriate DRG for reinbursement.
Hospital reinbursement is calculated by multiplying the "relative weight" of each DRG cate 
gory by a standardized amount, as modfied by ceI1n hospital-specifc factors. The relative 
1.00 
weight of each DRG vares above or below  accordig to the average amount of hospi 
tal resoures used by patients in that diagnostic grup. The higher the relative weight, the 
greater the reimburement. Mis-assignment of the ICD- CM categories, or erroneous assign 
ment or sequencing of patient diagnoses, can thus have significant financial implications.  .. 
, "
DRG 468
This study examnes erroneous assignment and gamng in a single DRG: 468
, unrlated oper 
ating room procedures. Accordig to the ICD- Patients are assigned to patient class 
468 when all operating procedures performed are unrelated to the patient
s principal diagno 
sis." For example, if a patient enters the hospital because of pneumonia, falls out of bed, and 
therefore undergoes onhopedic surgery; the discharge groups to DRG 468, rather than to ei 
ther DRG 89 (pneumonia) or DRG 218 (lower extremity surgical procedures). Because of its 
high relative weight , DRG 468 remais susceptible to inproper creep. 
DRG 46

Figure  1: 
Relative Weight 
Discharges (1 OK)

-4 
Charges ($100M)

-e 
Payment ($1 OOM)

-? Mean payment ($1 K) 
1984  1985  1986  1987
Fiscal Year 
For this reason, the PROs' second " scope of work" requirs them to review  all  DRG 468 dis 
charges. In its fust 18 months, 
they repon reviewing 120,670 (80. 2 percent) of the population 
of 150,483 discharges. It subseuently incrased to 91.9 percent. Nevenheless, the third 
scope of work decreases PRO review of DRG 468 bills to 50 percent. 
Of the ftrst 11,415 DRG 468 bils reviewed, the PROs found 9.5 percent to be erroneous, a 
higher rate than for other DRGs. By the end of the second scope of work
, the errr rate re
poned by the PROs increased to a cumulative 11. 1 percent on DRG 468 bils. 
For an approxi
mately comparble period, SuperPRO checked the PROs' reabstractions and identified 14. 
percent of DRG 468 bils accepted by the PROs as acrually grouping to other DRGs. Unfonu 
nately, SuperPRO cycles do not corrlate precisely with PRO scope of work periods. 
METHODOLOGY
This study examnes DRG 468 discharges from the same sampling frame as the National DRG
Valdation Study. The National DRG Validation Study used a strtified two-stage sampling  --.
\.  ::'
design based on hospitals to select medical records for review. The first stage used simple ra 
dom sampling without replacement to select 80 hospitals from each of three strata based on 
bed size: less than 100 beds (small), 100 to 299 beds (medum), and 300 or more beds (large). 
The second stage of the design employed systematic random sampling to select DRG 468 bils 
from the 239 stage-one hospitals (one hospital dropped out) for 
Medicar discharges between 
October I, 1984 and March 31 , 1985. 
Figure 2: Sampling frame 
EZ 
0:100 
;( 100-299 
j 300+

DRG 468  DRGs 
All 
The OIG contrcted with the Health Data Institute (HDI) of Lexington, Massachusetts to 
reabstrct the entie sample ofrecords. Upon receipt, the contrctor "blinded" the ICD-
codes by covering them, and assigned an identification number to each record. An accredited 
record technician or registered reord admnistrator proficient in ICD- CM codng reviewed 
the entir record to substatiate the principal diagnosis, other diagnoses, and proedures indi 
cated by the attendig physician in the narative attestation form. Any records which did not 
suppon the assigned DRG classification were referr to 
physician reviewers. The physician 
reviewers designated the corrct UHDS principal diagnosis, additional diagnoses, and proce 
dures substatiated by the patient records. The GROUPER computer progr 
processed the
reabstracted ICD- CM codes to determe correct DRGs. A full discussion of the methodol 
ogy and fmdings of the contrctor record review is available in the fmal repon of the National 
DRG Validation Study (available from OIG Public Affais).  ........,.........
The DRG 468 was chosen for this inspection because of its high relative weight (2.
0818) and 
a high ratio of overpayments. The OIG contrcted With BOTEC Analysis of Cambridge, MA 
to examne data for DRG 468 in grater detai, to identify sources of codng errrs , and to 
make recommendations for recovery of overpayments. 
Figure 3: Hospital demography 
Ves
DRG 468: Urban 
All DRGs: Urban 
DRG 468: Teaching 
no,_,,_,....
All DRGs: Teaching 
DRG 468: Profit 
All DRGs: Profit 
100
Percent FINDINGS
Sample characteristics
In FY 1985, 114 526 of the 8.3 million prospective payment discharges (1.4 percent) grouped
to DRG 468. The National DRG Valdation Study estimates that they came principally from
large and medium sized hospitals. In the ftrs hal ofFY 1985, the 239 hospitas in the sam 
pling frame biled for 222 396 discharges of which 2,765 came from DRG 468. The first 
stage of the sample design reflects the population 
s distrbution by hospital size, while the sec 
ond stage intentionally oversamples small hospitals to increase statistical effciency. The high 
sampling fraction in small hospitals (20.3 percent) reflects the scarcity of DRG 468 discharges
in that strata. (Appendi A-
Additionally, the two-stage sample design permts calculation of separate results for Medicar
beneficiares (the probability of something happening to a person) and hospitals (the odds of
an event at a panicular hospital). The appendices, tables, and char therefore repon individ 
ual totals weighted by both discharges and hospitals.
Approxinately equal numbers of DRG 468 discharges in this sample came from small 
medium, and large hospitals. Unless strta weighted by discharges, the proporton of cases 
from small hospitals over-represents its PPS population, while medium sized and large hospi 
tals under-represent theirs. This diference in the composition of discharges attaned statistical 
significance (Chi-square 7.38, df 1 , Po:O.Ol). (Appendix A 
Table I: Patient demography 
DRG 46  National DRG  Medicare
Validation Study 
Age (years)  68.  73. not available 
Sex (% male)  60.  46. 42. 
LOS (days)  5816  3150 2985 urban 
2381 rural 
Mortalny (%)  not available
Like all discharges under PPS, the majority of DRG 468 discharges cam from urban , non-
teaching, and nonprofit hospitas. (Appendix A-3) While the genera pattern of discharges 
was simiar, the DRG 468 sample (discharge-weighted) diered from estimates for all PPS dis 
charges in having a signifcantly grater proporton of discharges frm urban (Mantel- Haenszel Chi-square 5.
, df 1 , P-c0. 025), teaching (Mantel-Haenszel Chi-squar 8.40
P-c0.OO5), and for-profit hospitals (Mantel- , df 1
Haenszel Chi-square 13.  , df I, P-c0.005).
(Appendi A-
Discharges paid as DRG 468 were
, on average, younger patients and more frequently male
than all PPS discharges. (Appendix A-
5) Their average length of hospita stay (LOS) was al
most 5 days longer than that found in the National DRG Validation Study, and they died at a 
slightly higher rate. The average reimbursement for discharges assigned to DRG 468 was sub
stantialy higher than in the National DRG Validation Study and for all 
ference which proved to be statistically significant (Students-t 23.  PPS discharges , a dif
, df 80
(Appendi A- , P-cO.OOI). 
Assignment errors
Reviewers determned that 24 of the 81 discharges in this sample should have been assigned 
to another DRG. This represents an error rate of 24. 
8 percent when weighted by discharge to
approxinate the underlying population. In contrast
, the National DRG Validation Study found
an average error rate of 18.
6 percent among all DRGs.
Figure 4: Assignment errors
Percent 
DRG 468 
F&J  ALL DRGs 
,,100

100-299  300+

Bed size 
Within the DRG 468 sample, 
errrs were sharly higher among discharges from small hospi
tals. Hospitals with less than 100 beds made assignment 
other hospitals in the DRG 468 sample, and nearly twicee rars rosf tmeunc ahs  msomrea llf hreoqsupeiwn"  y than
.n the full
National DRG Validation Study. Large hospitas also made assignment 
errrs m( .
: frequently  on DRG 468 discharges than on all DRGs included in the National DRG Validation Study. 
(Appendi B-
1 J 
ru 
Examned by demogrphic charcteristics  hospitals had a higher rate of assignment er
rors than urban hospitals. Teaching hospitas exceeded non-teaching facilities in mis-assign 
ments. For-profit hospitals were responsible for the highest rate of assignment errors, 
assigning 8 out of 17 discharges (47. 1 percent) incorrectly to DRG 468. (Appendix B-
Patient demographics differed between discharges assigned correctly and incorrctly by the 
hospitals. Discharges incorrectly charged to DRG 468 were on average slightly younger
th  , had 
a lower proporton of males, and died over  times as fruently. Incorrectly assigned dis
charges had approxinately the sam lengt of hospital stay, but reimbured at a higher rate 
than those which were corrctly paid as DRG 468. (Appendix B-
Direction of errors 
Twenty of the 24 discharges incorrctly assigned to DRG 468 resulted in overpayments to the 
hospitals (83. 8 percent discharge-weighted). Hospitas should have coded and billed these dis
charges to DRGs with lower relative weights than DRG 468. Within each hospital demo-
graphic category, the rate of overpayment was similarly high for hospitas in each 
strta. The 
83.8 percent overpayment rate multiplied by the 24.8 percent error rate produces an effective 
overpayment rate of 20.8 percent. This DRG 468 overpayment rate is almost twice the effec
tive overpayment rate for the National DRG Validation Study (11. percent). (Appen 
dix C-
Figure 5: Direcion of errors 
Percent 
DRG 468 
DRG 468 
fS ALL DRGs 
ALL DRGs 
-:100  100-299  300+ 
Bed size  The proporton of overpayments differed among hospitals 
tys. Urban and teaching hospi
tals overpaid themselves much more frequently than rual and nonteaching hospitals 
urban 
hospitals overpaid themselves on 91.3 percent and teaching hospitas on 100.
0 percent of dis
charges which were incorrectly assigned. Rur hospitas, in contrast, overpaid themselves on 
29.4 percent and nonteaching hospitals on about one- 7 percent) of incorrect submis 
third (66. 
sions. The proponion of overpayments was simlar amng nonprofit and for-profit hospitals 
(28.7 percent and 91.0 percent). (Appendix C-
Turing to patient demographic characteristics, discharges which were overpaid had slightly 
older patients and fewer male patients. The length of hospitals stay was similar between the 
two groups, but the reimburement to hospitas was alost $1 00 higher on discharges which 
resulte in hospitals overpayments. (Appendix C-
Source of errors
On 16 of the 24 discharges which were incorrctly paid as DRG 468, the medcal records de-
parent incorrctly coded the record as DRG 468 and the hospital charged accordingly. In 
eight discharges, the medical records deparent corrctly coded the discharge to another 
DRG but the hospital biled the discharge as 468 anyway. Biling errors by the hospitals ad-
ministration were concentrted in discharges from small hospitals (45.5 percem of errors) and 
large hospitals (37. 5 percent). None of the discharges frm mid-size hospitals were incor 
rectly paid as DRG 468 due to billing errrs alone. (Appendi D-
The proponion of codng and biling errrs also vared among hospitas by location and typ. 
Among discharges from urban, teaching, and nonprofit hospitas the majority of 
errrs oc 
currd when records incorrectly coded as DRG 468 were billed accordngly. 
ru  In contrst, 50. 
percent of the errors in discharges frm  hospitas, 33. 3 percent of those from nonteach 
, occurd when the hospita incorrctly biled a correctly 
ing hospitals  coded record. Among 
Figure 6: Reasons for coding errors
Misspecification
Miscoding
Resequencing
t2 
Other
DRG 468  All DRGs  2) 
discharges from for-profit hospitals, biling errors were also more  0 percent). 
fruent (50. 
(Appendi D-
Patient charcteristics did not var substatially betWeen discharges either coded or biled in 
corrctly. Patient age, proporton of males, and rate of moI1ity were similar. Discharges on 
which the hospita admnistrtion changed the medcal codng at the 
time of biling had aver-
age hospita stays 4 days longer than discharges which were incorrtly coded by medical re-
cords, and were reimbursed at a slightly higher rate. (Appendi D-
Reasons for assignment errors 
Errors in codng discharges to DRG 468 were caused in about equal proporton by physician 
mis-specifcations, hospita miscodng, and a varety of "other" errrs. In comparson to the re 
sults from the National DRG Validation Study, this represents a parcularly high rate of 
miscodng errors, a low rate of errors due to resequencing, and a high rate of "other
" errors. 
(Appendix E-
Physicians caused 8 of the 24 errrs on  G 468 discharges by mis-specifying nartive diag 
noses or procedures on the patients ' Attestation Sheets. These mis-specifications concerned 
the principal diagnosis in 5 discharges, the seconda diagnosis in 1 and procedures in 3. An-
other 8 of the 24 errors resulted when hospitas selected the wrong code for a correct nartive 
diagnosis or proedure. Hospitals most frequently miscoded proedures (6 discharges). 
Seven of the discharges were incorrectly biled and paid due to "other" reasons. Only one
error resulte from hospital reseuencing of the nartive diagnosis to substitute a seconda 
diagnosis for the 
corrct principal diagnosis. 
Figure 7: Overpyment projecion 
$ million 
150 
100 
1984  1985  1986  1987  1988  1989  1990 
Fisc Year  Reasons for assignment errrs differed little by hospita size, location, teaching or profit sta
tus. (Appendi E-
2) Mis-specifications by the attending physician were parcularly frequent 
however, in discharges from mid-sized hospitas. Among patient demographics, age and gen
der were similar across all categories. However, the length of hospita stay, reinbursement, 
and rate of moI1ity were parcularly high in discharges on which physicians made mis-speci
fications. (Appendi E-
Financia effects 
After reabstrction, the relative weight for discharges in this sample droppe frm an average 
of 2. 0818 to 1.8991 , a discharge weighted decase of 9. 1 percent. The mean reinbursement 
, thugh 
change raged from $1126 for small hospitas $625 for large hospitas, to $351 for 
medium sized hospitals. Weighted by discharges, this 81 case sample found $54 709 in over-
payments from 24 codng errors. Extrpolation to the enti Medcare population projects $66 
million in errors during the study year. The overpayments rise continuously to $ 107.8 milion 
in FY 1988 and $140.3 milion in FY 1990. (Appendix F-
Clinical Incidents 
Figure 8: 
Percent 
DRG 468 
National 
DRG study 
Premature discharge  Poor quamy care  Unneeded admissions 
Correct DRG assignments 
corrt 
No panern distinguished the  DRG assignments for the miscoded DRG 468 discharges. 
(Appendi G-2J Reviewers assigned the 24 dischares incorrectly paid as DRG 468 to 23 
alternative DRGs after reabstrction. The corrt DRG assignments distrbuted among 15 dif
ferent Major Diagnostic Categories (MDCs). (Appendi G- Clinical review results 
Only three of the discharges in this sample were judged by reviewers to be inappropriate ad-
missions ("an admssion in which the car received by the patient was either not neeed or did 
not require the use of the inpatient settng. ) This rate, 2. 7 percent when weighted by dis
charge, was substantially lower than the rate in the National DRG Validation Study. Review
ers identified only one premature discharge in the DRG 468 sample. (Appendix H-
Reviewers identified quality of care "not meeting professionally recognize standads" in 5 of 
the 81 discharges paid as DRG 468, a rate of 5. 7 percent when weighted by discharge. This is 
approximately the sam rate found acrss all DRGs in the National DRG Validation Study. 
Quality of car problems were somewhat higher amng DRG 468 discharges from small hos
3 percent) and pancularly low in discharges from large facilities (1.2 
pitals (8. percent).
(Appendix H- RECOMMENDATIONS
oversight of DRG 468 
The HCF A should determne why the per review organization 
SuperPRO. 
discharges identies a lower rate of misclassifications than 
The HCF A should determne why SuperPRO identifies a lower rate of 
misclassifications than this study.
bils.
The HCFA should continue 100 percent review ofDRG 468 
The HCFA reviewed a drt of this inspection repon and disagres with these recommenda 
implementation 
tions. (Appendix IJ The Offce of Inspector Genera continues to believe that 
of these recommendations would save $140.3 millon annually.  ($)

(%) 
Appendix A- DRG 468 discharges from all PPS hospitals 
Fiscal Year  1984  1985  1986  1987 
1037  0818  2248  4516 
Relative weight 
145  114  526  125  811  117  377 
Number of discharges 
Total  charges  ($ million)  579.  175.  447.  , 447 . 9 
($ million)  396.  n9.  887.  938. 
Total reimbursement 
Average reimbursement  990  368  053  998 
Appendix A- DRG 468  sampling frame 
Bed size 
Number	
(100  100-299  300+  Total 
Medicare population (FY 85)  944  915  667  114  526 
Sample hospitals  118  741  1906  765 
Sampled 
(20.  (3.  (2. 
Sampling fraction  (1. 5) 
Appendix A- DRG 468 hospital demography 
ercenta 
Number  Bed size  Wei 
(Percent)  (100 100-299  300+ Total  Samphtlede    Discharge  Hospital 
(n. 
Urban  (45.  (75.  (92. (82. 2) (63.
8) 
Rural  (54.  (24.  (7.  (27. 2) (17. 8) (36. 
Teaching (33.  (17.  (64. (38. 3) (41.6) (33. 
Nonteaching  (66.  24 (82.  10 (35.  (61.7) (58. 4) (67. 
Profit  (41.7)  (24.  (0. (21.0) (13. 4) (29.
Nonprofit  14 (58.  (75.  (100)  (79. 0) (86. 6) (70. 
Total  24 (100)  29 (100)  (100)  (100)  (100)  (100)  Appendix A- DRG 468 hospital demography  comparison 
Percent  Bed size  Wei  ercenta 
(100  100-299  300+ Samplhtede    Discharge  Hospital 
Urban	 DRG 468  45.  75.  92.  72. 8 82.  63. 
NDRGVS  19.  70. 2 94.  62. 0 71.5 48. 
Rural	 DRG 468  54.  24.  27.  17. 8 36. 
NDRGVS  80.  29.  38. 0 28.  52. 
Teaching	 DRG 468  33.  17.  64.  38. 3 41.6 33. 
NDRGVS  18. 8 55.  25. 9 31.9 16. 
Non- DRG 468  66. 7 82. 8 35.  61. 7  58.  67. 
teaching  NDRGVS  97.  81.2 44.  74.  68. 2 83. 
Profit	 DRG 468  41. 7  24. 1 0.  21.0  13. 4 29. 
17.  10. 
NDRGVS 
Nonprofi t DRG 468  58. 3 75.  100.  79. 0 86.  70. 
NDRGVS  90.  82.  97.  90. 2 90. 6 89. 
Appendix A- DRG 468 patient demography 
Bed size  Weighted average 
300+ Sample Discharge Hospital 
(100 100-299 
Age (years) 68. 2 69. 5 67.  68. 4 68.  68. 
Sex (% male) 54. 2 51.7 71.4  59. 3 61.6  56. 
LOS (days) 10. 2 10. 1 14.  11. 7 12.	 10. 
Payment ($)  4959 5530 6416 5667 5929  5375
0 6.  2 8. 
Mortali ty (%)  9 10.  (%)

Appendix A-
 DRG 468  comparison  of patient demography 
Bed size  Wei  hted avera 
(100 100-299  300+ Sample  Discharge  Hospi tal 
(years) 
Age  DRG 468  68.  69.  67.  68.  68.  68. 
NDRGVS  76. 2 74. 0 72.  74.  73.  74. 
Sex  (% male)  DRG 468  54.  51.7 71.  59.  61. 6  56. 
NDRGVS  43.  45. 4 48.  45. 7 46.  44. 
LOS  (days)  DRG 468  10.  10.  14.  11. 7  12.  10. 
NDRGVS 
Payment  (S)  DRG 468  4959  5530 6416  5667  5928  5375 
NDRGVS  1849  2923 3807  2860 3074  2508 
Morta1i ty
 DRG 468  10. 
NDRGVS 
Appendix B-
 DRG 468 assignment accuracy

Number  Bed size  ercenta 
Wei 
(percentJ  (100 100-299  300+ Total  Samphtlede    Discharge 
Hospi tal 
Urban  (45. 5J  (22.  (23.  (27. 1J (24. 5J (34.
Rural  (46. 2J  (O.  7 J  (100.1  J  (36. 4J (52. 7J (39. 
Teaching (62. 5J  (40.  (27. (38. 7J (35. 5J (49.
Nonteaching 
(37. 5J  (12. 5J  (30.  (24. 0J (22. 9J (28. 
Profit 
(60 . OJ  (28.  (O.  (47. 1J (16. 6J (40.
Nonprofit 
(35. 7J  (13. 6J  (28. 6J  (25. 0J (22. 6J (27. 
Total  (45. 8J  (17.  (28. 6J  (29. 6J (24. 8J (33.  ((%$)) (cid:1)
Appendix  DRG  468  assignment  accuracy  comparison 
Percent Bed size  Wei  ercenta 
GOO  100-299  300+  Samphtlede    Discharge  Hospital 
Urban DRG  468  45.  22.  23.  27.  24.  34. 
22.  19.  16.  18.  17.  20. 
NDRGVS 
Rural DRG  468  46.  100.  36.  52.  39. 
23.  16.  22.  20.  21.3 
NDRGVS  21. 9 
Te,,' :hing DRG  468  62.  40.  27.  38.  35.  49. 
20.  20.  15.  17.  17.  19. 
NDRGVS 
Non- DRG  468  37.  12.  30.  24.  22.  28. 
teaching  23.  17.  17.  20.  19.  20. 
NDRGVS 
Profit  DRG  468  60.  28.  47.  16.  40. 
23.  18.  18.  20.  19.  21.3 
NDRGVS 
Nonprofi t DRG  468  35.  13.  28.  25.  22.  27. 
23.  18.  16.  19.  18.  20. 
NDRGVS 
Total  DRG  468  45.  17.  28.  29.  24.  33. 
23.  18.  16.  19.  18.  20. 
NDRGVS 
Appendix B- DRG 468 assignment accuracy by patient demography

Bed size  Wei  hted avera 
GOO 100-299  300+ Sample  Discharge  Hospi tal 
Age  Correct  76.  69.  64.  69. 4 67. 7 72. 
(years)  Incorrect  58. 4 70. 2 73.  66. 0 71.2 64. 
Sex  Correct  53.  58. 3 80.  64.  68.  59. 
(% male)  Incorrect  54. 5 20. 0 50.  45. 8 37. 2 42. 
LOS  Correct  10.  16.  11.8 13. 2 9. 
(days)  Incorrect  13. 5 9.  10.  11. 6  10.  11. 6 
Payment  Correct  4873  5487  6717  5779  6053 5365 
Incorrect  5061  5738  5664  5403 5654 5377 
Correct
Mortali ty 
Incorrect 0.  20. 0 25.  12. 5 21. 1  10.  Appendix C-l: 
DRG 468 direction of errors by hospital demography 
Number of  Bed size 
Weighted percentage
overpayments (100 100-299  300+ Total  Sample Discharge Hospital 
(Percent) 
Urban  (100.  4 (80.  (100.  (93.  (91.3)  (93.
Rural  (66.  0 (0.  (50.  (62.  (29.  (42. 
Teaching (100. 
2 (100. 0)  5 (100.  (100. 0) (100. 0) (100.
Nonteaching 
4 (66.  2 (66.  2 (66.  (66.  (66. 
(66. 7J 
Profi t  6 (100.  (50. OJ  0 (0.  (87.  (67.
Nonprofi t  (60.  (100.  7 (87.  (81.35 )J   ((9281..  7J  (77. 
Total  (81.8) 
4 (80.  7 (87.  (83.  (83.  (82. 
Appendix C- DRG 468 direction of errors comparison 
Percent  Bed size  Weighted  percentage
overpayments  (100  100-299  300+  Sample  Discharge  Hospital 
Urban  DRG 468  100.  80.  100.  93.  91.3  93.
NDRGVS  53.  60.  57.  58.  57.  56. 
Rural  DRG 468  66.  50.  62.  29.  42.
NDRGVS  66.  57.  65.  64.  62.  63. 
Teaching  DRG 468  100.  100.  100.  100.  100.  100.
NDRGVS  66.  59.  56.  57.  59.  62. 
Nteoanc-hing  DRG 468 66.  66.  66.  66.  66.  66.
NDRGVS  64.  59.  59.  61. 7  60.  61. 9 
Profit 
DRG 468  100.  50.  87.  28.  67.
NDRGVS  68.  55.  63.  60.  61. 7  63. 
Nonprofit 
DRG 468  60.  100.  87.  81.3  91.0  77.
NDRGVS  63.  60.  57.  60.  59. 
61. 6 
Total 
DRG 468  81. 8  80.  87.  83.  83.  82.
NDRGVS  64.  59.  57.  60.  59. 
61. 6  ((%$))(cid:1) 
Appendix  C-3: 
DRG 468  direction of errors  by patient 
demography 
Bed size 
Weighted  average
(100  100-299 
300+  Sample  Discharge  Hospital
Age  Overpaid 
(years)  Underpaid  2685..  8656..   6774..   68.  70.  67. 
52.  72.  52. 
Sex  Overpaid 
44.  25. 
(% male)  Underpaid  100.  42.  40.  35.  37.
100. 
75.  56.  67.
LOS  Overpaid 
16.
(days)  Underpaid 
11. 0  24.  18.  1111.. 07   19.  1111.. 6

Payment Overpaid 
Underpaid  45229351   5825  5788  5545  5766  5513
Mortality 5389  4798  4694  5021  4731
Overpaid
100. 
Underpaid  100.  70.  93.  48.
14. 
Appendix D-l: 
DRG 468 hospital department 
making errors
Number 
Bed size

errors  by the  Weighted  percentage(cid:1)
(100 100-299  300+ Total 
coding  department  (Percent)  Sample  Discharge  Hospital(cid:1)
Urban 
(40. 
Rural  (66.  ((01.0 0.  ((08.3 .  (75.  (87.  (66.
(50.  (4.  (34.
Teaching
(40. 
(100. 
Nonteaching  (80.(cid:1)
(66.  (100.  (33.  (66.  (85.  (65.(cid:1)
Profit  (66.  (64.  (72.
(33. 
Nonprofit  (100.  (0.(cid:1)
(80.  (100.  (62.  (50.  (45.  (49.(cid:1)
(75.  (80.  (83.
Total 
(54. 
(100.  (62. 
(66. 
(78.  (70.  (( $% )) 
Appendix D

DRG 468 hospital department  errors comparison 
making 
Percent of errors 
dby ethpe artmceondt ing  B(le0d0  size
 100-299  300+ SWameipglhet ed  pDericsecnhtaarggee  Hospital
Urban(cid:1)
NDDRRGG V4S6 8  4890..   8180.0 .  9803..   8795..  0 87.  66.
7 89. 7 89. 
Rural(cid:1)
DRG 468  66. 
NDRGVS  94.  95.  90.  9540..  0 49.3 .  3944..
Teaching(cid:1)
NDDRRGG V4S6 8  4910..  7  9120.0 .  8890..   9606..  37  8951.. 0 9615..6 
Non-
teaching  NDDRRGG V4S6 8  9636..   9100.0 .  3923..   9626..  7 6941..  8  7292. . 
Profi t	 DRG 468  33.  100. 
NDRGVS  86.  92.  50. 0 45. 9 49.
81. 8  89.  86. 
5 87. 
Nonprofi t	 DNDRRGG V4S6 8  9840..   9100.0 .  9602..   9725..  0 8901..  4  9823..
Total(cid:1)
DNDRRGG V4S6 8  9534..   9100.0 .  9602..   66.  78.  70.
91. 7  91. 2  92. 
Appendix D-3: 
demography  DRG 468 hospital department errors by patient 
making 
Bed size  Weighted average
(l00 100-299  300+ Sample 
Discharge Hospital 
A(ygee ars)  Billing  64. 5 0.  67. 66.  37. 
Coding  52.  70.  8 43. 
2 77.  65.  72.  62. 
Sex(cid:1) Billing 
(% male)  Coding  5600..  0 0.  33. 50. 0 20. 6 36.
0 20. 0 60.  43. 8 41.  41.8 
Billing 
LOS  16. 0 0. 
(days)  Coding  11.3 9.  11. 7  14.  10.
10. 2 9.  10. 
Payment(cid:1) Billing 
5444 0  5424
5437 3061 3666 
Coding  4741  5737  5808 
5386 5703 5234 
Mortality  Billing 
33.  12.  16.
Coding 
20. 
0 20.  12.  18. 6 9.  Appendix  DRG 468  reasons  for  errors 
size 
Bed 
(100  100-299  300+  Total  (Percent) 
Mis-specification
Principal  diagnosis (20.
Secondary  diagnosis (4.
Procedure  (12. 
Miscoding
Principal  diagnosis (8.
Procedure  (24. 
Resequencing
Incorrect  sequence (4. 
Other 
hospital  codes  (4.
other  (24. 
Total  (100. 
Appendix E- DRG 468 reasons for errors by hospital demography

Number  Narrative  Miscoding  Resequencing  Other 
(Percent) 
(100 beds (27. (36. (0. (36.
100-299 beds  (60. (40. (0. (0.
300+ beds  (25.  (25.  (12.  (37. 
Urban  (37. (37. (6. (18.
Rural  (25.  (25.  (0.  (50. 
Teaching (33. (33. (8. (25.
Nonteaching  (33.  (33.  (0.  (33. 
Profit  (25. (37. (0. (37.
(37.  (31.3)  (6.  (25. 
Nonprof it 
Total  (33.  (33.  (4.  (29.  (%)

Appendix E-3: 
DRG 468 reasons for errors comparison 
Percent 
Bed size

Weighted percentage

(100 100-299  300+ Sample 
Discharge Hospital
Mis-speci-
fication  DRG  468  27.  60.  25.
NDRGVS  49.  44.  49.  4383..   4470..   3487..
MiScoding 
DRG  468  36.  40.  25.  33.  32.  35.
NDRGVS  10.  14. 
11. 4  11. 9  12. 
11. 8
Resequencing 
DRG 468 
12. 
NDRGVS  31.0  24.  24.  27.  25.  1.2 89
.
Other 
DRG 468  36.  37.  29.  21.1  24.
NDRGVS  15.  14.  12.  13. 
11. 0 
Appendix E-4: 
DRG 468 reasons for errors by patient demography 
Mis-specification 
Miscoding

Resequencing 
Other 
Age  (years) 66. 
59. 
Sex  (% male)  37.  79.  71.1 
50. 
LOS  (days) 13.  57.
Payment  (S) 6116  11. 6  12. 
Mortality  4921 
25.  5320  5151 
14. 
Appendix F-l: 
DRG 468  corrected relative weights

Relative 
weight 
Bed size 
Average-
Average
 GOO  100-299  300+  total 
Paid

Corrected
 0818  0818  0818 
0818
Difference
 6092  9497  1. 8789 
8911
4726  1321  2029  1908 
Total

Paid

DCoifrfreercetnecde
 
 314189...   369426203482    56608..  335047912 32   55286..  826109290 24   211046.78 8..  576472515 38 (%)
Appendix F-
DRG 468  corrected reimbursement
Bed size  Average-
(100  100-299  300+  total 
Avera
Paid
959  530  416  929 
Cor:-ected 833  179  791  388 
Difference
126  351  625  541 
Total
Paid
119  023  160  381  179  657  459  063 
Corrected
, 003  150  204  162  147  404  354 
Difference
020  177  510  709 
Overpayment  rate  (22.  (6.  (9.  (9.
Appendix F- Overpayment proj ection
Fiscal Year Reimbursement  Overpayment
(S million)  ($ million)
1984 396.  36.
1985 729.  66.
1986 887.  80.
1987 938.  85.
1988 est. 184.  107.
1989 est. 362.  124.
1990 est. 541.4  140.
Overpayment calculated as 9. 1 percent of reimbursement.
Estimates based on linear regression. Appendix G- Correct MDC for discharges incorrectly assigned to DRG 468
Number  Bed size 
(100  100-299  300+  Total  (Percent) 
01 :  Nervous System  (4.
03:  Ear  Nose  and Throat 
(4.
04:  Respiratory System 
(4.
05:  Circulatory 
(8.
06:  Digestive 
(12.
07:  Hepatobi1iary & Pancreas 
(4.
08:  Musculoskeletal 
(12.
09 :  Skin and Breast  (8.
11:	 Kidney and Urinary Tract 
(4.
12:  Urological 
(4.
13:  Gynecological 
(12.
14:  Delivery 
(8.
16:  Blood  Hematopoietic 
(4.
21:  Injury,  Poisoning & Drugs  (4.
Other 
23 :  (4. 
Total 
(100.  Appendix G- Correct DRG for discharges incorrectly assigned to DRG 468
Number 
ConcussionBed size 
(100 100-299  300+ Total  (Percent)
Sinus & mastoid procedures  (4.(cid:1)
Respiratory infections  (4.(cid:1)
Heart failure & shock 
(4.(cid:1)
127 
Syncope & collapse 
(4.(cid:1)
142 
(4.(cid:1)
148  Lower gastrointestinal procedures 
154  HUppeerr ganstiroiant estrineal ppraociedurre s 0  (4.(cid:1)
Liver disorders 
(4.(cid:1)
161 
Hip procedures  (4.(cid:1)
205 
(4.(cid:1)
210 
Lower extremi ty procedures  (4.(cid:1)
218 
Skin graft 
240  Connective tissue disorders  (4.(cid:1)
(4.(cid:1)
264 
Urinary tract symptoms 
(8.(cid:1)
325 
Transurethral prostatectomy  (4.(cid:1)
336 
Conization 
Uterine malignancy procedures  (4.(cid:1)
354 
360  Vagina  (4. 
, cervix, & vulva procedures 0 
364  (4. 
374  Vaginal delivery & sterilization  (4. 
395  Red blood cell disorders  (8. 
Trauma procedures 
443  Other diagnoses  (4. 
461  (4.
(4.
Total 
(100.  Appendix H-1: 
DRG 468 clinical review 
Number  Bed size  Weighted percentage
(Percent)  (100 100-299  300+ Total  Sample Discharge 
Hospi tal 
Unnecessary
admissions  2 (8.  1 (3.  o (0.  (3.  (2.  (5. 
Poor quality 
of care  2 (8.  2 (6.  1 (3.  (6.  (5.  (8. 
Premature 
discharge  a (0.  1 (3.  a (0. 
(1.1) 
(1. 2)  (1. 5) 
Appendix H- DRG 468  clinical  review  comparison 
Percent  Bed  size  Wei  hted  ercenta
000 
100-299  300+  Sample  Discharge  Hospital 
Unnecessary
DRG 468
admissions 
NDRGVS  12.  10.  10.  10. 
11. 3
Poor quality  DRG 468 
care 
NDRGVS  11. 4 
Prema ture  DRG 468  1.5  1.1 
discharge  1. 2 
NDRGVS  1.1  1.4  Appendix I: 
HCFA comments  , -. ~~~
""y 
':. . - !)  .. )
..IZ'
FoG
Hr-j) 
Health Care 
e /e..:y 
DEPARTME-'T OF HEALTH &. HL' ".A-' SERVICES 
nanCll1g  AdmInIS:' 3:,a"" 
"DL'
I'm-I
Memorandum
'IC
Da!t'
Err
y COle'1.an

c:in  inistrator
Gr2  o;t  DRG 468:  Unrel ated Operati ng Room Procedures, 
Sub!ec: 0'-1- 12-83-01170 
he Inspecto  General 
'10 Offi ce of the Secretary 
We have reviewed the draft r  ort on DRG 468. HCFA recognized many of the

problems with DRG 468, and we have taken a number of steps to correct the

deficiencies. Our specific comments on the recommendations are attached

for your consideration.

Thank you for the opportunity to comment on thi s report.

Attachment
DIG
c1J 
;b 
AlG-l 
ADM 
OGC/IG 
EXSr:C
SF.
DATE 
Co' , " 
Comments of the
Health Care Flnanclna Administration
on the OiG Draft Reoort  DRG 468:
Unrelatea Dperatina Room Procedures 
OAI-12-88-01l70 
Geceral Comments 
e believe that this report is out of
Tahe aper:ieod .st udied was FY 1985. 
Si nce that time, HCFA has taken steps to reduce the number of cases 
assigned to DRG 468. These actions should be addressed in the report. 
Once again , we find the use of the term overpayment in connection with 
81 discharges reviewed to be inappropriate in the context of the Medicare 
h i 1 e we agree that cod i ng accuracy is 
pros pect i ve payment sys tem (PPS). 
vital to the correct DRG assignment, the payment for an indtvidual DRG 
does not determine the aggregate effect of p:  on individual hospitals or 
groups of hospitals. 
O:G Recommendation 
The Health Care Financing Administration (HCFA) should ensure that the 
This 
PROs review prospectively all bills for DRG 468.  proces s shou 1 
yield $140 million annually. 
HCr A Res pon se 
e disagree with the recommendation and projected . savings of $140 million 
annually for the follo,ing reasons: 
The data on which these projections were made is old and based on 
cases from early in PPS. Substantial growth has taken plac 
understandi ng how to document and code for the system. 
HCFA has held training sessions across the country for all PROs and 
instructed PROs to educate hospitals in correct coding principles. 
Additionally, outside groups such as the American Medical Record 
Association and the American Hospital Association have put 
considerable emphasis on correct coding. These Associations have 
conducted training sessions and publis  numerous articles to educate 
coders. The data for DRG 468 should no longer have the same high 
percentage of errors. 
For economies of scale, HCFA has reduced the sample for required 
revi ew to 50 percent, n the . thi rd scope of work. We be 1 i eve th is to 
be sufficient to identify problem areas where review should be
intensified.  Page 2 
. of tases 
HCF  recognized that there were problems with the numbers 
looking at the data, we found that a
being assigned to DRG 468. In 
, as of 
large volume of cases fell into two distinct categoriesT hweh incuhm ber of 
O:toDer 1988, have been developed into two new DRGs. 
cases which will now fall into DRG 468 has been substantially regdsu. ced 
ana will , therefore, directly impact on the OIG estimated savi 
mendation 
OIG Reco 
i ew of " all" DRG 468 
The HCFA shou 1 d determi ne why the on-goi ng PRO rev 
2 percent of this populatio 
discharges actually reabstracts only 80. 
HCFA Response 
second scope of work 
OIG reported that during the first 18 months of the. 
2 percent of the cases assigned to DRG 468. 
the PROs reviewed only 80. 
HCFA'  s official PRO Medical Review Activity Reports for the 24 months of 
at PROs reported 
-- the second scope of work, recei ved to date, show th  420 discharges 
reviewing 179, 598 or 91. 9 percent of the population of 195, 
ass i gned to DRG 468. 
sti 11 in
The remaining 8. 1 percent of discharges assigned to DRG 468 are 
the new 
the PRO review process and wi 11 be reviewed and reported during 
PRO contract cyc 
mendat ion 
OIG Reco 
The HCFA should reabstlact a large sample of DRG 468 bills for coding 
of all DRG 468 
accuracy tbdetermine why the on-going PRO review 
0 percent (SuperPRO rate) to 
discharges fails to detect the 14. 
percent (OIG rate) of discharges incorrectly billed to DRG 468. 
HCFA Response 
Through the SuperPRO contract and 
We di sagree with thi s recommend at i on. 
' review of DRG 468 
evaluations protocols, HCFA is validatiin ngg  tchoer rPeRcOts d etermi nat ions. These

bi 11 s to determi ne if the PROs are mak 
results are used to identify problems and institute necessary corrective
action. 
DIG Recommendation 
The HCFA should reabstract a large sample of DRG 468 bi0l lpse rfcoern ct oodfing 
accuracy to determine why Super PRO identifies only 14.  , identifies 
incorrect PRO confirmation of DRG 468 bills, whereas this st. 
8 percent rate. 
a 24.  Page 3
HCFA ResDonse 
e do not agree with this recommendation. The DIG'
based on FY 1985 data. The SuperPRD  s disagreement rate is
data. Therefore  disagreement rate is based on current
, we do not believe that it is necessary to determine why
there is a difference between these disagreement rates since they cannot
be Co pared. 
As mentioned previously, since the periOd the DIG studied
been added and HCFA has conducted training sessions to educate hospitals
, new DRGs have
incorrect cod i ng pri nc i p 
reviewing a 50 percent sa1m pelse.  oUfn dDeRrG  t4h6e 8s.c ope of work 
, PROs wi 11 be
identified and corrective actions will be imPprloebmleenmt eadr ewahse nw ialplp rboepriate.