Department of Health and Human Services 

OFFICE OF


NSPECTOR GENERAL


DRG 121 VALIDATION STUDY UPDATE: 

CIRCULATORY DISORDERS WITH 

MYOCARDIAL INFARCTION AND 

CARDIOVASCULAR COMPLICATIONS 

OCTOBER 1992

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 

Services (HHS) programs as well as the health and welfare of beneficiaries served by 

those programs. This statutory mission is carried out through a nationwide network of 

audits, investigations, and inspections conducted by three OIG operating components: 

the Office of Audit Services, the Office 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. 

OFFICE OF AUDIT SERVICES 

The OIG’S Office of Audit Services (OAS) provides all auditing services 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 carting out their respective responsibilities 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 

efficiency throughout the Department. 

OFFICE OF INVESTIGATIONS 

The OIG’S Office of Investigations (01) conducts criminal, 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. 

OFFICE OF EVALUATION AND INSPECTIONS 

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 efficiency, vulnerability, and effectiveness of 

departmental programs. 

Amy L. Lockwood of BOTEC Analysis Corporation prepared this report with 

direction from Janet W. Knight, BOTEC Project Director, and David C. Hsia, OIG 

Project Officer. Contract information and project participants are listed in Appendix 

A to this inspection. 
Department of Health and Human Services 

OFFICE OF


NSPECTOR GENERAL


DRG 121 VALIDATION STUDY UPDATE: 

CIRCULATORY DISORDERS WITH 

MYOCARDIAL INFARCTION AND 

CARDIOVASCULAR COMPLICATIONS 

OCTOBER 1992 OEI-12-89-00194

EXECUTIVE SUMMARY


PURPOSE 

This inspection reabstracted on a blinded basis, the International Classification of 

Diseases, 9th Edition, Clinical Modification codes from a sample of Medicare 

discharges billed as diagnosis-related group (DRG) 121. It compared the reabstracted 

DRGtothe hospital-billed DRGfor reimbursement changes. The sample was 

nationally representative and covered all of 1988, the most recent data available. 

This inspection updated a previous Office of Inspector General (OIG) study. For 

1985, the OIG found 17,7 percent errors among 76 reabstractions, improperly overreimbursing hospitals by a projected $42.2 million. This inspection used a parallel 

methodology to make these studies statistically comparable. Statistical tests 

determined whether numeric differences between 1985 results and 1988 results were 

real (statistically significant) or could be attributed to random error. 

FINDINGS 

DRG 121 billing errors not reduced 

Of 115 discharges reabstracted for this inspection, 12.2 percent had billing errors. The 

difference between this result and the 17.7 percent error rate the OIG found for DRG 

121 discharges in 1985 was not statistically significant. Further, the difference between 

this inspection’s 12.2 percent error rate and the 14.7 percent errors for all discharges 

in 1988 also lacked statistical significance. 

Financial impact not reduced 

This inspection projected that DRG 121 billing errors over-reimbursed hospitals $28,7 

million. This result did not statistically differ from the $42.2 million overreimbursement in 1985. The increase in the number of DRG 121 bills in 1988 largely 

offset the decrease in the proportion of errors. 

1 
TABLE OF CONTENTS


EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i


TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1


FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


DRG121billing errornot reduced . . . . . . . . . . . . . . . . . . . . . . . . . 4


All errors over-reimburse the hospitals . . . . . . . . . . . . . . . . . . . . . . . 4


Over-reimbursement continues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


Reasons for errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5


ENDNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6


APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7


A Project participants ..,.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


B: ICD-9-CM codes in DRG 121..... . . . . . . . . . . . . . . . . . . . . . . . . . . 10


C: Sample representativeness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11


D: Proportion of DRG 121 billing errors, 1985 and 1988 . . . . . . . . . . . . . . 12


E: DRG 121 case-mix index change, 1985 and 1988 . . . . . . . . . . . . . . . . . 13

INTRODUCTION


Background


Diagnosis-related group (DRG) 121 includes 121nternational CJassificationof


Diseases, 9th Edition, Clinical Modification (ICD-9-CM) codes. The ICD-9-CM codes


may appear as either principal or secondary diagnoses. These ICD-9-CM codes


identify complications to cardiovascular disease. To group to DRG 121, a bill must


have codes for both an acute myocardial infarction and cardiovascular complications.


The myocardial infarction must have occurred within eight weeks of the date of


admission for the DRG 121 billing. Either diagnosis may appear as the primary or


secondary diagnosis. [Appendix B].


DRG 121’s weight decreased from 1.8454 in 1985 to 1.7162 in 1988. In October 1989,


the HCFA altered DRG 121 by adding a fifth digit to ICD-9-CM code 410 to identify


whether a given admission is the initial or subsequent treatment for a myocardial


infarction. This change deleted the rule requiring that patients with an identified


myocardial infarction or a myocardial infarction in the prior eight weeks be included in


DRG 121. This change did not affect the period of this study.


In a previous study, the OIG found that DRG 121 had a disproportionately high


proportion of billing errors. 1 Correct ICD-9-CM coding would have grouped 17.7


percent of its 76 reabstractions to different DRGs in 1985. These billing errors over-


reimbursed the hospitals a projected $42.2 million.


This inspection updated the previous study using 1988 data, the most recent available.


It used a parallel methodology to make these inspections statistically comparable.


Methodology


This inspection randomly selected 115 DRG 121 discharges from 42 hospitals. The


study population consisted of the 142,312 Medicare-reimbursed DRG 121 discharges


during calendar year 1988. The design excluded discharges from specialty institutions


such as children’s hospitals, tuberculosis units, and psychiatric facilities. It also


excluded discharges in Maryland and New Jersey, which the PPS still exempted in


1988. Finally, it excluded bills for pediatric, obstetric, and psychiatric DRGs


(principally drug and alcohol rehabilitation performed by a general hospital).’ Unlike


its 1985 predecessor, it included hospitals established since the advent of the PPS in


1983.


The OIG requested that hospitals send complete copies of the sampled medical


records to the OIG’S contractor, Baxter-Health Data Institute (HDI) of Lexington,


MA. The OIG followed-up missing records and issued subpoenas to compel the


cooperation of four hospitals.


1

The OIG contracted with the American Medical Record Association (AMRA) to 

reabstract the charts. The AMRA selected ICD-9-CM codes supported by the record, 

determined the principle diagnosis, and grouped to select the correct DRG. To assure 

that the original ICD-9-CM codes and DRGs did not effect the reabstraction, the 

AMRA coders conducted their work without knowledge of the original ICD-9-CM 

codes and DRGs. The coders had instructions not to treat marginal problems or 

honest differences in judgement about appropriate coding as DRG errors. This 

standard should have produced a conservative estimate of the proportion of discharges 

having DRG errors. A series of reliability checks verified the reproducibility and 

accuracy of the AMRA coding. The AMRA also identified the reasons why a 

hospital’s bill differed from the correct codes. 

BOTEC Analysis Corporation of Cambridge, Massachusetts (BOTEC) edited the 

AMRA database, checked the sample’s representativeness, and conducted statistical 

analyses of the correlates and financial consequences of DRG 121 miscoding. It also 

reweighted the 1985 data to improve comparability with this inspection. The t-test 

determined whether numeric differences between 1985 results and 1988 results were 

real (statistically significant) or could be attributed to random error. 

Representativeness 

To test the sample’s representativeness, the OIG compared the distribution of sample 

bills to the distribution of the underlying population of DRG 121. The sample and 

population did not differ significantly with respect to hospital or patient characteristics. 

[Appendix C]. 

2

Bedsize 

<100 ,@ 100€

1004?99€ e. 

301)+ 

Sample Population 

Location 

Metropolitan ~Me’”’71 

W..tmp!!2?..W’W. 

Sample Population 

Teachingstatus 

WwMii @&i” 

Nonteachlng 

Sample Population 

Control 

N-’f@-Gpti 

Sample Population 

‘igure 1: Sample representativeness by hospital demography, 1988 

Age Sex 

a5-74 Male 

65-74 MaJe 

a4 

75-84 75-84 

; 98 

Female 

Sample Population Sample Population 

Race 

3

tFINDINGS


DRG 121 billing error not reduced 

Of the 115 sample discharges, 12.2 

percent had billing errors that changed 

25 a 

their reimbursement from DRG 121. 

The difference between this result and 

the 17.7 percent error rate the OIG 

20 

15 

-i Year 

� 1985 

� 1988 

found in 1985 was not statistically 

significant.1 This trend applied across 

most hospital and patient characteristics. 

Small hospitals, for-profit hospitals, and 

younger patients showed more 

improvement in coding accuracy. 

10 

5 

0 1

DRG 121 

i 

AllDRGs 

[Appendix D]. 

~igure 3: Coding errors, 1985 & 1988 

This 1985-1988 decrease in the 

proportion of billing errors exceeded the improvement for all DRGs, from 20.8 

percent in 1985 to 14.7 percent in 1988. The difference between this inspection’s 12.2 

percent DRG 121 errors and the 14.7 percent errors for all DRGs in 1988 was not 

statistically significant.3 

All errors over-reimbursethe hospitals 

Of the 14 billing errors, all over-reimbursed to the hospitals. This proportion did not 

improve upon the 100 percent over-reimbursement reported for in 1985. 

Over-reimbursement continues 

The 115 sample discharges originally carried Relative Weights of 1.8454, equivalent to 

an average payment of $5,638. The AMRA reabstraction reduced the case-mix index 

(CMI) by a statistically significant 0.0675. This reduction persisted across most 

hospital and demographic characteristics. The net CMI change in 1988 did not differ 

significantly from the net CMI change for DRG 121 in 1985. [Appendix E]. 

An extrapolation of the CMI change in 1988 to all 142,312 DRG 121 discharges from 

the hospital categories included in this sample projected that billing errors overreimbursed hospitals a statistically significant $28.7 million. This over-reimbursement 

1. Because of the smaller sample size that results from DRG-specific analysis, 

estimates of coding for specific DRGs are less precise than OIG’S national estimate. 

Statistical tests determined whether apparent differences were real (statistically 

significant) or could be attributed to random error. 

4 
did not statistically differ from the $42.2 

million over-reimbursement in 1985. 

The increase in the number of DRG 

121 bills offset the nonsignificant 

improvement in coding accuracy. 

Reasons for errors 

The AMRA identified only two types of 

errors in the sample, mis-specification 

and “other.” Mis-specification caused 

85.7 percent of the 14 billing errors. 

This proportion did not statistically 

differ from in 1985. “Other” caused the 

remainder of the sample’s billing errors. 

This proportion also did not statistically 

differ from 1985. 

$ miJon 

$ 

ii 

25 

o1985 1988 

Figure 4: Financial impact of miscoding 

DRG 121, 1988 & 1985 

5 
ENDNOTES


1. Stone D, Kleiman M, Meyers M, Schutte J, Lee F, Hsia D, & Krushat M. DRG 

121: Circulatory disorders with acute myocardial infarction and cardiovascular 

complications. Washington, DC: HHS Officeof Inspector General, 1989. Publication 

no. OAI-12-88-01210. 

2. Knight J W & Hsia D C, eds. National DRG Validation Study Update: Technical 

Report. Washington, DC: HHS Office of Inspector General, 1992. Inspection no. 

OEI-12-90-00191. 

3. Knight J W & Hsia D C, eds. National DRG Validation Study Update: Summary 

Report. Washington, DC: HHS Officeof Inspector General, 1992. Inspection no. 

OEI-12-90-00190. 

6

APPENDICES 

7 
Appendix A Project participants 

QIg 

Cathaleen A. Ahern, B.A.


Evan J. Buckingham, B.A.


David C. Hsia, J.D., M.D., M.P.H.


Thomas F. Komaniecki, M.P.A.


W. Mark Krushat, M.P.H.


Linda M. Moscoe, B.A.


Brian P. Ritchie, B.A.


Barry L. Steeley2


John M. Traczyk, B.A.


HCFA


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


Stephen F. Jencks, M.D.


Michael R. McMullan, M.B.A.


Harry L. Savitt, Ph.D.


Jeanette M. Smith, M.D., M.P.H.3


Malcolm A. Sneen, B.S.


RAND Corporation


Haya P. Rubin, M.D., Ph.D4


Baxter-Health Data Institute5


Patricia J. Baxter, R.N.


Patricia Cassidy-Tsnosas, R.N.


Annette M. Delaney, R. N., M.A.


Ellen B. Inghilleri, R.N.


Janet Mathews, A.R.T.


Laurie H. Moore, R.R.A.


Claire Shannon, A.R.T.


Michele A. Wiese, B.A.


AMRA


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


Mary Converse, R.R.A.


Nicholas J. Cotsonas, M.D.b


Linda Ertl, R.R.A.


2. Now at Health Audit Services, Ellicott City, MD. 

3. Now at the Journal of the American Medical Association, Chicago, IL. 

4. Now at Johns Hopkins Medical Institutions. 

5. Ceased operations February 16, 1990. 

6. Outside contractor. 

8 
Rita M. Finnegan, R.R.A.


Desla Mantilla, A.R.T.


Barbara Manny, R.R.A.


Sonia Martyniuk, R.R.A.


Toula Nicholas, A.R.T.


Charlotte Razor, R.R.A.


LouAnn Schraffenberger, R.R.A.


Lynn Smetko, R.R.A.


Dawn Smith, A.R.T.


Joan Zacharias, A.R.T.


BOTEC Analvsis Corporation


Geraldine M. Berenholz, R.R.A.


Andrew H. Chalsma, B.A.


David P. Cavanagh, M.A., Ph.D.


Janet W. Knight, R.N., Ph.D.


by L. Lockwood, B.A.


Contract information 

Contractor


BOTEC Analysis Corporation


1698 Massachusetts Avenue


Cambridge, MA 02138


Proiect Officer


David Hsia, J.D., M.D., M.P.H.


Office of Inspector General


3301ndependence Avenue


Washington, D.C. 20201


Contract


HHS-1OO-9O-OO23


Firm-fixed price contract


$203,257


9

402 

411.0 

414 

415.1 

426 

427 

428 

429 

441.0 

458.9 

584 

785 

Appendix B: ICD-9-CM codes in DRG 121 

hypertensive heart disease with congestive heart failure


post-myocardial infarction syndrome


heart aneurysm


pulmonary embolism-infarction


atrioventricular block


tachycardia


congestive heart failure


papillary muscle rupture


dissecting aneurysm


hypotension


acute renal failure


shock


10 
Appendix 

Number [percent] Population 

Hospital demomaphy 

1-99 beds 21,874 [15.4] 

100-299 beds 55,381 [38.9] 

300+ beds 65,050 [45.7] 

Metropolitan 105,776 [74.3] 

Nonmetropolitan 36,536 [25.7] 

Teaching 55,599 [39.1] 

Nonteaching 86,713 [60.9] 

Profit 14,650 [10.5] 

Nonprofit 125,237 [89.5] 

Patient demomaphy 

c65 years 8,061 [5.7] 

65-74 years 56,834 [39.9] 

75-84 years 56,279 [39.5] 

85+ years 21,138 [14.9] 

Male 71,330 [50.1] 

Female 70,982 [49.9] 

White 127,723 [89.7] 

Black 8,794 [6.2] 

Other 1,836 [1.3] 

Unknown 3,959 [2.8] 

Total 142.312 I1OO.O1 

C Sample 

Sample 

14 [12.2] 

49 [42.6] 

52 [45.2] 

85 [73.9] 

30 [26.1] 

43 [37.4] 

72 [62.6] 

9 [7.8] 

106 [92.2] 

2 [1.7] 

52 [45.2] 

44 [38.3] 

17 [14.8] 

49 [42.6] 

66 [57.4] 

104 [90.4] 

7 [6.1] 

2 [1.7] 

2 [1.7] 

115 [100.01 

representativeness 

Chi-square 

1.02, 2 df, P= O.400 

0.01, 1 df, P= O.071 

0.12, ldf, P= O.264 

0.75, 1 df, P= O.61O 

3.46, 3 df, P= O.672 

2.26, 1 df, P= O.871 

0.55, 3 df, P= O.093 

11

Appendix D: Proportion of DRG 121 billing errors, 1985 and 1988 

Number f standard 

error [percent] 

Hospital demo~raphv 

1-99 beds 

100-299 beds 

300+ beds 

Metropolitan 

Nonmetropolitan 

Teaching 

Nonteaching 

Profit 

Nonprofit 

Patient demography 

1988 1985* t-test 

<65 years 

65-74 years 

75-84 years 

85+ years 

Male 

Female 

White 

Black 

Other 

Unknown 

Total 

*Reweighted 

1 [7.1 f 

4 [8.2 f 

9 [17.3 t 

10 [11.8 t 

4 [13.3 f 

7 [16.3 f 

7 [9.7 f 

o [0.0 f 

14 [13.2 f 

1 [50.0 t 

2 [3.8 ~ 

8 [18.2 t 

3 [17.6 f 

3 [6.1 t 

11 [16.7 t 

11 [10.3 t 

3 [42.9 f 

o [0.0 * 

o [0.0 f 

14 [12.2 f 

7.1] 8 [30.8 f 9.2] 3.87 

4.0] 3 [12.0 * 6.6] 0.88 

5.3] 4 [16.0 f 7.5] 0.23 

3.5] 8 [16.2 f 5.5] 0.87 

6.3] 7 [6.1 i 1.9] 1.89 

5.7] 4 [3.5 ~ 1.6] 2.81 

3.5] 11 [8.9 t 2.7] 0.22 

0,0] 1 [5.7 * 5.7] 3.50 

3.3] 14 [18.3 3 4.8] 0.94 

50.0] 1 [25,0 ~ 25.0] 3.03 

2.7] 8 [24.7 ~ 7.6] 4.40 

5.9] 6 [24.0 t 9.5] 0.92 

9.5] o [0.0 f 0.0] 3.80 

3.5] 8 [17.1 ~ 6.0] 2.35 

4.6] 7 [16.0 ~ 6.4] 0.11 

3.0] 

20.2] 

0.0] 

0.0] 

3.1] 15 [17.0 f 4.4] 0.92 

for comparability to 1988.

12

Appendix E DRG 121 case-mix index change, 1985 and 1988 

Relative weight ~ 1988 1985 Difference t-test 

standard error 

Hospital demo~raphy 

1-99 beds 

100-299 beds 

300+ beds 

Metropolitan 

Nonmetropolitan 

Teaching 

Nonteaching 

Profit 

Nonprofit 

-0.0227 t 0.0227 -0.2362 t 0.0758 0.2135 4.55 

-0.0417 t 0.0209 -0.0774 * 0.0434 0.0357 1.40 

-0.1038 ~ 0.0325 -0.0282 t 0.0963 -0.0756 1.53 

-0.0672 t 0.0207 -0.0673 f 0.0508 0.0001 0.00 

-0.0681 f 0.0334 -0.0490 f 0.0161 -0.0191 0.89 

-0.0962 ~ 0.0345 -0.0061 ~ 0.0210 -0.0901 3.15 

-0.0503 t 0.0189 -0.0638 t 0.0183 0.0135 0.61 

0.0000 f 0.0000 -0.0282 f 0.0282 0.0282 3.50 

-0.0732 i 0.0189 -0.0973 t 0.0470 0.0241 0.57 

patient demomaphy 

e 65 years 

65-74 years 

75-84 years 

85+ years 

Male 

Female 

White 

Black 

Other 

Unknown 

Total 

-0.4313 f 0.4313 -0.1803 ~ 0.1803 -0.2510 3.89 

-0.0198 t 0.0138 -0.1275 f 0.0695 0.1077 2.68 

-0.0901 t 0.0301 -0.1750 f 0.0739 0.0849 2.03 

-0.1120 f 0.0611 -0.0000 t 0.0000 -0.1120 3.76 

-0.0423 f 0.0244 -0.0516 t 0.0689 0.0093 0.19 

-0.0862 t 0.0246 -0.1271 f 0.0557 0.0409 1.10 

-0.0530 f 0.0155 

-0.3215 t 0.1530 

0.0000 * 0.0000 

0.0000 t 0.0000 

-0.0675 ~ 0.0175 -0.0845 t 0.0463 0.0170 0.39 

13