Department of Health and Human Servces


OFFICE OF


INSPECTOR GENERAL


DRG 14 VALIDATION UPDATE:


SPECIFIC CEREBROVASCULAR


DISORDERS EXCEPT TRANSIENT


ISCHEMIC ATTACKS


AUGUST 199

OFFCE OF INSPECfOR GEN 

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. 

OFFCE OF EVALUATION AN 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 overreimbursing hospitals by a projected $31.5 mion. 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 overreimbursement 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 

discharges during 1985. The 1985 Study included 217 DRG 14 reabstractions 

with 15.8 percent errors. Upon national projection, these DRG 14 errors overreimbursed 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 

reabstract the charts. The AM 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. 

SAMLE REPREENTATI 

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 

Nomepolt Nonpr Nonpr 

Sample Population Saple Populaton 

Figue 1: Sample representativeness by hospital demography, Age 1988

Sex 

6674 Mal 

6674 Mal 

85+ Female 

Femal 

Sample Population Sample Population 

Race 

Grop 

D White


Black . Ot 

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. 

This proportion significantly improved 1984 

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


1988 contrast, for 1985 DRG 14 reabstraction 198 1985


identified significant over-reimbursement


to the hospitals. Hospital and patient Figue 4: Financial impact of miscoding


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 underreimbursed 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 overreimbursement estimated for 1985. (Appendix 6). 

DRG 14 accounted for 13.3 percent of the $69.8 milion in net under-reimbursement 

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. OAI09-86-00052. 

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 

436 Cerebrovascular accident 

432. Intracerebral hemorrhage, not otherwse specified 

434. Cerebral thrombosis 

434. Cerebral embolism 

434. Cerebral artery occlusion, not otherwse specified 

437. Nonruptured cerebral aneurysm 

784.3 Aphasia

Appendix 3: Sample representativeness 

Number (percent) Population 

Hos ital demo 

99 beds 645 (15. 

100-299 beds 125 856 (38. 

300+ beds 156 016 (47. 

Metropolitan 249 967 (75.4) 

Nonmetropolitan 81 583 (24. 

Teaching 

Nonteaching 

Profit 

Nonprofit 

Patient demo 

64 years


65-74 years 

75-84 years 

85 + years 

Male 

Female 

White 

Black 

Other 

Unknown 

Total 

131 367 (39. 

200 183 (60.4) 

954 (10. 

292 022 (89. 

769 (4. 

109 174 (32. 

137 898 (41.6) 

709 (21.3) 

139 865 (42. 

191 685 (57. 

280 550 (84. 

600 (11.0) 

144 (1.6) 

256 (2. 

331 550 (100. 

Sample 

29 (20. 

50 (34.5) 

66 (45. 

108 (74. 

37 (25. 

54 (37. 

91 (62. 

14. (9.


131 (90.3) 

5 (3.4) 

36 (24. 

68 (46.


36 (24. 

51 (35. 

94 (64. 

131 (90. 

9 (6. 

2 (1.4) 

3 (2. 

145 (100. 

Chi-square 

, 2 df, P=0.640 

, 1 df, P=0. 150 

, 1 df, P=0.372 

, 2 df, P=0.020 

3.4, 3 df, P=0.658 

, 1 df, P=0.835 

, 3 df, P=0.559 

not applicable

Appendix 4: DRG 14 coding errors by hospital and patient demography, 1984- 1988 

Proportion :t 1984 

standard error (n) 

Hospital demography

1..99 beds 20.0:t 13.3 (10) 

100-299 beds 17.1 :t 4.2 (85)

300+ beds 14.6 :t 2.2 (260) 

Metropolitan 

Nonmetropolitan 

Teaching 

Nonteaching 

Profit 

Nonprofit 

Patient demography 

65 years


65-74 years 

75-84 years 

85 + years 

Male 

Female 

White 

Black 

Other 

Unkown 

Total 15. 1 :t 1.9 (355) 

1988 difference 14. 1 (8.0 to 20. 

(95% CI) 

1985 

30.8 :t 5.3 (78) 

13.4 :t 4.2 (67) 

12.5 :t 3.9 (72) 

13.2 :t 3.4 (133) 

26. 1 :t 10. 1 (84) 

10.5 :t 3.5 (61) 

15.4 :t 3.3 (156) 

9 :t 2.3 (16) 

16.4 :t 2.7 (201) 

2 :t 2.6 (14) 

13.5 :t 4.7 (78) 

19.9 :t 4.3 (85) 

21.9 :t 9.5 (40) 

14.2 :t 3.9 (103) 

18.2 :t 3.6 (114) 

15.8 :t 2.6 (217) 

1988 

3.4 :t 3.4 (29) 

0 :t 2.0 (50) 

0 :t 0.0 (66) 

9 :t 0.9 (108) 

7 :t 2.7 (37) 

0 :t 0.0 (54) 

2 :t 1.5 (91)


0 :t 0.0 (14) 

1.5 :t 1.1 (131) 

0 :t 0.0 (5) 

6 :t 3.9 (36) 

0 :t 0.0 (68) 

0 :t 0.0 (36) 

0 :t 0.0 (51) 

1 :t 1.5 (94) 

1.5 :t 1.1 (131) 

0 :t 0.0 (9) 

0 :t 0.0 (2) 

0 :t 0.0 (3) 

1.4 :t 1.0 (145) 

14.3 (8.0 to 20.6) NA 
Appendix 5: Coding errors by hospital and patient demography, 1988 

Proportion :t DRG 

standard error (n) 

Hospital demography 99 beds 3.4 :t 3.4 (29) 

100-299 beds 2.0:t 2.0 (50) 

300+ beds 0.0:t 0.0 (66) 

Metropolitan 9 :t 0.9 (108)


Nonmetropolitan 7 :t 2.7 (37)


Teaching 0 :t 0.0 (54)


Nonteaching 2 :t 1.5 (91)


Profit 0 :t 0.0 (14)


Nonprofit 1.5 :t 1.1 (131)


Patient demography 

65 years 0.0 :t 0.0 (5) 

65-74 years 5.6 :t 3.9 (36) 

75-84 years 0.0 :t 0.0 (68) 

85 + years 0.0 :t 0.0 (36) 

Male 0 :t 0.0 (51) 

Female 1 :t 1.5 (94) 

White 1.5 :t 1.1 (131) 

Black 0 :t 0.0 (9) 

Other 0 :t 0.0 (2) 

Unknown 0 :t 0.0 (3) 

Total 1.4 :t 1.0 (145) 

Difference 13.3 (7.5 to 19. 

(95% CI) 

All DRGs 

17.0 :t 2.0 (359) 

14.9 :t 1.2 (893) 

13.9 :t 1.0 (1199) 

14.9 :t 0.8 (1845) 

14.4 :t 1.4 (606) 

15.5 :t 1.1 (1008) 

14.2 :t 0.9 (1443) 

17.3 :t 2.3 (272) 

14.4 :t 0.8 (2179) 

16.4 :t 2.4 (232) 

14.9 :t 1.1 (1007) 

14.6 :t 1.2 (854) 

13.4 :t 1.8 (358) 

14.5 :t 1.1 (1094) 

14.9 :t 1.0 (1357) 

14.8 :t 0.8 (220) 

14.4 :t 2.6 (188) 

14.3 :t 6.0 (35) 

7 :t 6.0 (23) 

14.7 :t 0.7 (2451) 
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 

'r I 0 19 Memorandum 

Dot' 

From Actg Admini trator 

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 

and $56.5 mion in 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 graphs on these pages are dicult to read because of their 

smal siz. We recommend increasing their siz in the fial report. 

Page 4, 'DRG 14 Over-Reimburement Eliated" section. It is not clear how the 

followig underlied statements were assumed: 

The 145 sample dicharges al origial received a Relative Weight of 

2429, equtYent to 797. Th Relatie Weight did not dier 

signcantl from the 1.2521 cae-mi index (CMI) afer AM reabstraction, equtYent to $3.

The relatie weight is a constat multiplier, but the multiplicad vares accrding to each 

hospita' s specic porton. We understad there were 144 hospita in th study. 

Therefore, the origi of these values should be explaied as an average, median mean 

or actual figue, as appropriate. 

Page 8, Appendix 1. Project parcipant Rita Finegan RR is now a self-employed 

consultat. Parcipant Delsa Mancila, ART, is no longer employed by AM her 

curent position is not known. 
/ / ,(

9203301330 """" O
 OBA: ACTION


4"'" 

Date 

From 

Subject 

DEPARTMENT OF HEALTH &. HUMAN SERVICES cc :Hudson;AAO :AACbtf.ce of Inspector General 

OLP:MB:OPHC:AA:AAC: Means; Somsak; Schmidt; Thomas


p 3 0 	 ADMINISTRATOR SIG. DUE 4/2SIIQ Memorandum 

Richard P. Kusserow 


Inspector General 	 1Z1 12-

DRG 14 alidation study Update: Specific 

Cerebrovascular Disorders other Than Transient Ischemic 

Attacks, " OEI-12-89-00192 

OIG Draft Report: 


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

98. 6 percent in 1988. The few coding errors no longer 

systematically over-reimburse the hospitals. This report, 

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


DISORDERS EXCEPT TRSIENT


ISCHEMIC ATIACKS


NOTCE - THIS DRA RESTICT TO OFFCIA USE 

This doumnt is a drft repo of th Ofce of Insctor General and is subject to

reion; therefore, reciient of th drft shoul not diclose it contents for purses 

other than for offcial re and commnt unr 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 OEI-12-8192 
EXECUTIVE SUMMAR 

PURE 

Ths inspection reabstracted on a blided basis, the International Cassifcation of 

Diseases, 9th Edition, Clcal 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 overreimbursing hospitals by a projected $31.5 miion. For 198, the OIG found 15. 

percent errors among 217 DRG 14 reabstractions, over-reimbursing hospitals an 

estimated $56.5 millon. Ths inspection used a parallel methodology to make these 

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 inspection s low proportion of errors precluded identig risks by 

hospital or patient demography. 

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.