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, effectiveness, and inregrity of programs in the United States Deparent of Health and Human Services (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 Congress fully and currently informed about programs or management problems and recommends 

corrective action. The OIG performs its mission by conducting audits, investigations, and inspections 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 Investigations. The OAI conducts inspections which are, typically, shoI1-term studies designed to determine 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 Analysis 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


BOTEC Analysis Corporation


36 JFK Stret


Cambridge, MA 02138 

Contract 

HHS- l00- 88-0019 

Project Officer 

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

Health Car Brach 

Offce of Inspector General 

330 Independence Ave. , SW 

Washington , D. C. 20201 
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. 

In 32.3 percent of incorrect bils, the medical records depanment assigned the wrong 

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 

Appendix C-3: DRG 468 dition of 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- l : DRG 468 reasons for errrs. . 

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. . . 

Appendix l: DRG 468 corrected relative weights 

Appendix 2: DRG 468 correcte reimburement. . . . 

Appendix 3: Overpayment projection. . . . . . . . . . . . . . . 

Appendix G- I: Correct MDC for discharges incorrectly assigned to 

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 expenses 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 discharge 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 unnecessar services. The total payments to the hospitas provided the same financial resources for patient car. In effect, PPS reverse the financial incentives for hospitals. Where the€

cost-reimbursement system rewarded longer hospita stays and more costly treatments, PPS rewarded 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 hospital 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 resulted 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 
a series examing assignment accurcy of one of the DRGs identified as having the highest 

impact on overpayments under PPS and the gratest potential for cost recovery. 

The PPS gaming takes two principal forms: optimization and creep. "Optimization" strategies adhere to coding rules, but maxinize hospital reimbursements by selecting the most expensive among viable alternative principal diagnoses or adding more secondar diagnoses. 

The PPS permts optimization, which flows from the basic incentive strcture of the PPS system. 

DRG creep" results from codng practices which do not conform to codng rules. Sources of 

DRG creep include: 

Misspecification: The attending physician wrtes an incorrect principal diagnosis 

(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. 

Miscoding: The hospital assigns incorrect numeric codes to diseases or procedurs€

correctly attested to by the attending physician.€

Resequencing: The hospital substitutes a seconda 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 beneficiar. 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 (diagnostic 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 

into the GROUPER computer progr which assigns the appropriate DRG for reinbursement.€

Hospital reinbursement is calculated by multiplying the "relative weight" of each DRG category by a standardized amount, as modfied by ceI1n hospital-specifc factors. The relative 

weight of each DRG vares above or below 1.00 accordig to the average amount of hospital 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 assignment 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 diagnosis. " 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 either DRG 89 (pneumonia) or DRG 218 (lower extremity surgical procedures). Because of its 

high relative weight , DRG 468 remais susceptible to inproper creep. 

Figure 1: DRG 46


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 discharges. 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 reponed by the PROs increased to a cumulative 11. 1 percent on DRG 468 bils. For an approximately 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. Unfonunately, 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 All DRGs 

The OIG contrcted with the Health Data Institute (HDI) of Lexington, Massachusetts to 

reabstrct the entie sample ofrecords. Upon receipt, the contrctor "blinded" the ICDcodes 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 methodology 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 

DRG 468: Urban Ves€

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 second 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 hospitals under-represent theirs. This diference in the composition of discharges attaned statistical 

significance (Chi-square 7. 38, df 1 , Po:O.Ol). (Appendix ADRG 46 

Age (years) 68. 

Sex (% male) 60. 

LOS (days) 5816 

Mortalny (%) 

Table I: Patient demography 

National DRG 

Validation Study 

73.€

46.€

3150€

Medicare€

not available 

42. 

2985 urban 

2381 rural 

not available€

Like all discharges under PPS, the majority of DRG 468 discharges cam from urban , nonteaching, 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 discharges 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- , df 1 profit hospitals (Mantel-Haenszel Chi-square 13. , df I, P-c0.005). (Appendi ADischarges 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 substantialy higher than in the National DRG Validation Study and for all PPS discharges , a dif­ ference which proved to be statistically significant (Students-t 23. 

(Appendi A- , df 80, 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 

Bed size 

300+


Within the DRG 468 sample, errrs were sharly higher among discharges from small hospi­ tals. Hospitals with less than 100 beds made assignment errrs much more frequen" y than other hospitals in the DRG 468 sample, and nearly twice as often as small hospiw 

National DRG Validation Study. Large hospitas also made assignment .n the full

errrs m( .: frequently 
on DRG 468 discharges than on all DRGs included in the National DRG Validation Study. 

(Appendi B- 1 J 

Examned by demogrphic charcteristics ru hospitals had a higher rate of assignment errors than urban hospitals. Teaching hospitas exceeded non-teaching facilities in mis-assignments. 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 BPatient demographics differed between discharges assigned correctly and incorrctly by the 

hospitals. Discharges incorrectly charged to DRG 468 were on average slightly younger, had 

a lower proporton of males, and died over th 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 BDirection 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 discharges to DRGs with lower relative weights than DRG 468. Within each hospital demographic 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 effective overpayment rate for the National DRG Validation Study (11. percent). (Appen dix CFigure 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 hospitals 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 discharges which were incorrectly assigned. Rur hospitas, in contrast, overpaid themselves on 

29.4 percent and nonteaching hospitals on about one-third (66. 7 percent) of incorrect submissions. The proponion of overpayments was simlar amng nonprofit and for-profit hospitals 

(28.7 percent and 91.0 percent). (Appendix CTuring 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 CSource of errors€

On 16 of the 24 discharges which were incorrctly paid as DRG 468, the medcal records deparent 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 administration 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 incorrectly paid as DRG 468 due to billing errrs alone. (Appendi DThe 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 occurrd when records incorrectly coded as DRG 468 were billed accordngly. In contrst, 50. 

percent of the errors in discharges frm ru hospitas, 33. 3 percent of those from nonteaching hospitals , occurd when the hospita incorrctly biled a correctly coded record. Among 

Figure 6: Reasons for coding errors€

Misspecification€

Miscoding€

Resequencing€

t2 Other€

DRG 468 All DRGs 
discharges from for-profit hospitals, biling errors were also more fruent (50. 0 percent). 

(Appendi D-2) 

Patient charcteristics did not var substatially betWeen discharges either coded or biled incorrctly. 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 average hospita stays 4 days longer than discharges which were incorrtly coded by medical records, and were reimbursed at a slightly higher rate. (Appendi DReasons 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 results 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 EPhysicians caused 8 of the 24 errrs on G 468 discharges by mis-specifying nartive diagnoses 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. Another 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 status. (Appendi E-2) Mis-specifications by the attending physician were parcularly frequent 

however, in discharges from mid-sized hospitas. Among patient demographics, age and gender 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-specifications. (Appendi EFinancia 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 

change raged from $1126 for small hospitas, thugh $625 for large hospitas, to $351 for 

medium sized hospitals. Weighted by discharges, this 81 case sample found $54 709 in overpayments 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 FFigure 8: Clinical Incidents 

Percent 

DRG 468 

National 

DRG study 

Premature discharge Poor quamy care Unneeded admissions 

Correct DRG assignments 

No panern distinguished the corrt 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 different Major Diagnostic Categories (MDCs). (Appendi G-
Clinical review results 

Only three of the discharges in this sample were judged by reviewers to be inappropriate admissions ("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 discharge, was substantially lower than the rate in the National DRG Validation Study. Reviewers identified only one premature discharge in the DRG 468 sample. (Appendix HReviewers 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 hospitals (8. 3 percent) and pancularly low in discharges from large facilities (1.2 percent). (Appendix H-
RECOMMENDATIONS€

The HCF A should determne why the per review organization oversight of DRG 468 

discharges identies a lower rate of misclassifications than SuperPRO. 

The HCF A should determne why SuperPRO identifies a lower rate of 

misclassifications than this study.€

The HCFA should continue 100 percent review ofDRG 468 bils.€

The HCFA reviewed a drt of this inspection repon and disagres with these recommendations. (Appendix IJ The Offce of Inspector Genera continues to believe that implementation 

of these recommendations would save $140. 3 millon annually. 
(%) ($)

Appendix A- DRG 468 discharges from all PPS hospitals 

Fiscal Year 1984 1985 1986 1987 

Relative weight 1037 0818 2248 4516 

Number of discharges 145 114 526 125 811 117 377 

Total charges ($ million) 579. 175. 447. , 447 . 9 

Total reimbursement ($ million) 396. n9. 887. 938. 

Average reimbursement 990 368 053 998 

Appendix A- DRG 468 sampling frame 

Number	 Bed size 

(100 100- 299 300+ Total 

Medicare population (FY 85) 944 915 667 114 526 

Sample hospitals 118 741 1906 765 

Sampled 

Sampling fraction (20. (3. (1. 5) (2. 

Appendix ANumber 

(Percent) 

Urban 

Rural 

Teaching

Nonteaching 

Profit 

Nonprofit 

Total 

DRG 468 hospital demography 

Bed size Wei hted ercenta 

(100 100- 299 300+ Total Sample Discharge Hospital 

(45. (75. (92. (54. (24. (7. 

(33. (17. (64. (66. 24 (82. 10 (35. 

(41.7) (24. (0. 14 (58. (75. (100) 

24 (100) 29 (100) (100) 

(n. 8) (82. 2) (63. (27. 2) (17. 8) (36. 

(38. 3) (41.6) (33. 

(61.7) (58. 4) (67. 

(21.0) (13. 4) (29. (79. 0) (86. 6) (70. 

(100) (100) (100) 
Appendix A- DRG 468 hospital demography comparison 

Percent Bed size Wei hted ercenta 

(100 100- 299 300+ Sample Discharge Hospital 

Urban	 DRG 468 

NDRGVS 

Rural	 DRG 468 

NDRGVS 

Teaching	 DRG 468 

NDRGVS 

Non- DRG 468 

teaching NDRGVS 

Profit	 DRG 468 

NDRGVS 

Nonprofi t€ DRG 468 

NDRGVS 

45. 75. 92. 

19. 70. 2 94. 

54. 24. 

80. 29. 

33. 17. 64. 

18. 8 55. 

66. 7 82. 8 35. 

97. 81.2 44. 

41. 7 24. 1 0. 

17. 

58. 3 75. 100. 

90. 82. 97. 

72. 8 82. 63. 

62. 0 71.5 48. 

27. 17. 8 36. 

38. 0 28. 52. 

38. 3 41.6 33. 

25. 9 31.9 16. 

61. 7 58. 67. 

74. 68. 2 83. 

21.0 13. 4 29. 

10. 

79. 0 86. 70. 

90. 2 90. 6 89. 

Appendix A- DRG 468 patient demography 

Bed size Weighted average 

(100 100- 299 300+ Sample Discharge Hospital 

Age (years)

Sex (% male)

LOS (days)

Payment ($) 

Mortali ty (%) 

68. 2 69. 5 67. 

54. 2 51.7 71.4 

10. 2 10. 1 14. 

4959 5530 6416 0 6. 9 10. 

68. 4 68. 68. 

59. 3 61.6 56. 

11. 7 12.	 10. 

5667 5929 5375 2 8. 
(%)


Appendix A-


Age (years) 

Sex (% male) 

LOS (days) 

Payment (S) 

Morta1i ty


Appendix B-


Number 

(percentJ 

Urban 

Rural 

Teaching

Nonteaching 

Profit 

Nonprofit 

Total 

DRG 468 comparison of patient demography 

Bed size Wei hted avera 

(100 100- 299 300+ Sample Discharge Hospi tal 

DRG 468 68. 69. 67. 

NDRGVS 76. 2 74. 0 72. 

DRG 468 54. 51.7 71. 

NDRGVS 43. 45. 4 48. 

DRG 468 10. 10. 14. 

NDRGVS 

DRG 468 4959 5530 6416 

NDRGVS 1849 2923 3807 

DRG 468 10. 

NDRGVS 

DRG 468 assignment accuracy


Bed size 

(100 100- 299 300+ Total 

(45. 5J 

(46. 2J 

(22. 7 J 

(O. 

(23. 1 J 

(100. 

(62. 5J 

(37. 5J 

(40. 

(12. 5J 

(27.

(30. 

(60 . OJ (28. (O. 

(35. 7J (13. 6J (28. 6J 

(45. 8J (17. (28. 6J 

68. 68. 68. 

74. 73. 74. 

59. 61. 6 56. 

45. 7 46. 44. 

11. 7 12. 10. 

5667 5928 5375 

2860 3074 2508 

Wei hted ercenta 

Sample Discharge Hospi tal 

(27. 1J (24. 5J (34. (36. 4J (52. 7J (39. 

(38. 7J (35. 5J (49. (24. 0J (22. 9J (28. 

(47. 1J (16. 6J (40. (25. 0J (22. 6J (27. 

(29. 6J (24. 8J (33. 
($)%)

Appendix DRG 468 assignment accuracy comparison 

Percent€ Bed size Wei hted ercenta 

GOO 100- 299 300+ Sample Discharge Hospital 

Urban€ DRG 468 45. 22. 23. 27. 24. 34. 

NDRGVS 22. 19. 16. 18. 17. 20. 

Rural€ DRG 468 46. 100. 36. 52. 39. 

NDRGVS 23. 16. 22. 21. 9 20. 21.3 

Te,,' :hing€ DRG 468 62. 40. 27. 38. 35. 49. 

NDRGVS 20. 20. 15. 17. 17. 19. 

Non- DRG 468 

teaching NDRGVS 

37. 

23. 

12. 

17. 

30. 

17. 

24. 

20. 

22. 

19. 

28. 

20. 

Profit DRG 468 

NDRGVS 

60. 

23. 

28. 

18. 18. 

47. 

20. 

16. 

19. 

40. 

21.3 

Nonprofi t DRG 468 

NDRGVS 

35. 

23. 

13. 

18. 

28. 

16. 

25. 

19. 

22. 

18. 

27. 

20. 

Total DRG 468 45. 17. 28. 29. 24. 33. 

NDRGVS 23. 18. 16. 19. 18. 20. 

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 

Mortali ty Correct Incorrect 0. 20. 0 25. 12. 5 21. 1 10. 
Appendix C-l: 

Number of 

overpayments

(Percent) 

Urban 

Rural 

Teaching

Nonteaching 

Profi t 

Nonprofi t 

Total 

Appendix CPercent 

overpayments 

DRG 468 direction of errors by hospital demography 

Bed size Weighted percentage (100 100- 299 300+ Total Sample Discharge Hospital 

(100. 4 (80. (100. (93. (91.3) (93. (66. 0 (0. (50. (62. (29. (42. 

(100. 2 (100. 0) 5 (100. (100. 0) (100. 0) (100. 4 (66. 2 (66. 2 (66. (66. (66. (66. 7J 

6 (100. (50. OJ 0 (0. (87. 5 J (28. 7J (67. (60. (100. 7 (87. (81.3) (91. (77. 

(81.8) 4 (80. 7 (87. (83. (83. (82. 

DRG 468 direction of errors comparison 

Bed size Weighted percentage (100 100- 299 300+ Sample Discharge Hospital 

Urban DRG 468 

NDRGVS 

100. 

53. 

80. 

60. 

100. 

57. 

93. 

58. 

91.3 

57. 

93.

56. 

Rural DRG 468 

NDRGVS 

66. 

66. 57. 

50. 

65. 

62. 

64. 

29. 

62. 

42.

63. 

Teaching DRG 468 

NDRGVS 

100. 

66. 

100. 

59. 

100. 

56. 

100. 

57. 

100. 

59. 

100.

62. 

Non- DRG 468 teaching NDRGVS 

66. 

64. 

66. 

59. 

66. 

59. 

66. 

61. 7 

66. 

60. 

66.

61. 9 

Profit DRG 468 

NDRGVS 

100. 

68. 

50. 

55. 63. 

87. 

60. 

28. 

61. 7 

67.

63. 

Nonprofit DRG 468 

NDRGVS 

60. 

63. 

100. 

60. 

87. 

57. 

81.3 

60. 

91.0 

59. 

77.

61. 6 

Total DRG 468 

NDRGVS 

81. 8 

64. 

80. 

59. 

87. 

57. 

83. 

60. 

83. 

59. 

82.

61. 6 
(%) ($ 

Appendix C-3: DRG 468 direction of errors by patient demography 

Bed size Weighted average (100 100-299 300+ Sample Discharge Hospital Age Overpaid 65. (years) Underpaid 28. 66. 74. 68. 70. 67. 

Sex Overpaid 44. 

85. 67. 52. 72. 52. 

(% male) Underpaid 100. 25. 42. 40. 35. 37. 100. 75. 56. 67. LOS Overpaid 16. (days) Underpaid 11. 0 24. 18. 11.0 19. 11.

11. 7 11. 6


Payment€ Overpaid 

Underpaid 4295 

5231 

5389 

5825 5788 5545 5766 5513

Mortality€ 4798 4694 5021 4731 Overpaid

Underpaid 100. 100. 70. 93. 48. 14. 

Appendix D-l: DRG 468 hospital department making errors

Number Bed size
 errors by the (100 100-299 300+ Total Weighted percentage coding department (Percent) Sample Discharge Hospital

Urban 

Rural 

Teaching

Nonteaching 

Profit 

Nonprofit 

Total 

(40. (100. (83. (66. (0. (75. (87. (66. (0. (50. (4. (34. (40. (100. (80. (66. (100. (33. (66. (85. (65. (66. (64. (72. (33. (100. (0. (80. (100. (62. (50. (45. (49. (75. (80. (83. (54. (100. (62. (66. (78. (70. 
( %)€ ($ ) 

Appendix D­
 DRG 468 hospital department 

making errors comparison 

Percent of errors 

by the coding Bed size
 Weighted percentage department (l00 100- 299 300+ Sample Discharge Hospital

Urban

NDRGVS 

DRG 468 40. 

89. 

100. 83. 75. 0 87. 66. 88. 90. 89. 7 89. 7 89. 

Rural DRG 468 66. 

NDRGVS 94. 95. 90. 50. 0 4. 34. 94. 93. 94. Teaching DRG 468 40. 

NDRGVS 91. 7 

100. 80. 66. 7 85. 65. 92. 89. 90. 3 91.0 91.6 

Non- DRG 468 66. 100. 33. 66. 7 64. 72. teaching NDRGVS 93. 90. 92. 92. 91. 8 92. 

Profi t	 DRG 468 33. 100. 

NDRGVS 86. 50. 0 45. 9 49. 92. 81. 8 89. 86. 5 87. 

Nonprofi t	 DRG 468 80. 

NDRGVS 94. 100. 62. 75. 0 80. 83. 90. 90. 92. 91. 4 92. Total DRG 468 

NDRGVS 93. 

54. 100. 62. 66. 78. 70. 90. 90. 91. 7 91. 2 92. 

Appendix D-3: DRG 468 hospital department demography making errors by patient 

Bed size Weighted average (l00 100-299 300+ Sample Discharge Hospital 

Age Billing 64. 5 0. 67. (years) Coding 52. 70. 2 77. 

66. 37. 8 43. 

65. 72. 62. 

Sex Billing 60. 0 0. 33. (% male) Coding 50. 0 20. 0 60. 

50. 0 20. 6 36. 43. 8 41. 41.8 

LOS 

(days) Billing 

Coding 16. 0 0. 11. 7 14. 10. 11.3 9. 10. 2 9. 10. 

Payment Billing 5444 0 5424 Coding 4741 5737 5808 

5437 3061 3666 

5386 5703 5234 

Mortality Billing 

Coding 33. 12. 16. 20. 0 20. 12. 18. 6 9. 
Appendix DRG 468 reasons for errors 

Bed size 

(100 100- 299 300+ Total 

Mis-specification Principal diagnosis Secondary diagnosis Procedure 

Miscoding Principal diagnosis Procedure 

Resequencing Incorrect sequence Other hospital codes 

other 

Total 

(Percent) 

(20.

(4.

(12. 

(8.

(24. 

(4. 

(4.

(24. 

(100. 

Appendix E- DRG 468 reasons for errors by hospital demography


Number 

(Percent) 

Narrative Miscoding Resequencing Other 

(100 beds

100- 299 beds 

300+ beds 

(27.

(60.

(25. 

(36.

(40.

(25. 

(0.

(0.

(12. 

(36.

(0.

(37. 

Urban 

Rural (37.

(25. (37.(25. (6.(0. (18.

(50. 

Teaching

Nonteaching (33.

(33. (33.

(33. (8.

(0. (25.

(33. 

Profit 

Nonprof it 

(25.

(37. (37.

(31.3) (0.

(6. (37.

(25. 

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- fication speci- DRG 468 27. 60. 25. NDRGVS 49. 44. 49. 33. 40. 37. 48. 47. 48. MiScoding 

NDRGVS 

DRG 468 36. 

10. 

40. 25. 33. 32. 35. 14. 11. 4 11. 9 12. 11. 8 Resequencing DRG 468 12. NDRGVS 31.0 1. 9
 24. 24. 27. 25. 28. Other 

NDRGVS 

DRG 468 36. 37. 29. 21.1 24. 15. 14. 12. 13. 11. 0 

Appendix E-4: DRG 468 reasons for errors by patient demography 

Mis-specification Miscoding


Age (years) Sex (% male) 

LOS (days) Payment (S) Mortality 

Appendix F-l: 

Relative weight 

Average


Paid


Corrected


Difference


Total


Paid


Corrected


Difference


66. 

37. 

13. 

6116 

25. 

DRG 468 

59. 

50. 

11. 6 

4921 

Resequencing Other 

79. 71.1 

57. 12. 

5320 5151 

14. 

corrected relative weights


Bed size 

GOO Average- 100-299 300+ total 

0818 0818 0818 0818 6092 9497 1. 8789 8911 4726 1321 2029 1908 

38. 

49. 9632 60. 3722 58. 2904 168. 6258

11. 

6208 56. 5413 52. 6092 147. 7713 3424 8309 6812 20. 8545 
(%)

Appendix F- DRG 468 corrected reimbursement€

Avera€

Paid€

Cor:-ected€

Difference€

Total€

Paid€

Corrected€

Difference€

Bed size 

(100 100- 299 300+ Average- total 

959 530 416 929 

833 179 791 388 

126 351 625 541 

119 023 160 381 179 657 459 063 

, 003 150 204 162 147 404 354 

020 177 510 709 

Overpayment rate (22. (6. (9. (9.€

Appendix F-€

Fiscal Year€

1984€

1985€

1986€

1987€

1988 est.€

1989 est.€

1990 est.€

Overpayment proj ection€

Reimbursement Overpayment€ (S million) ($ million)€

396. 36.€

729. 66.€

887. 80.€

938. 85.€

184. 107.€

362. 124.€

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 

11:	 Kidney and Urinary Tract (8.

(4. 12: Urological (4. 13: Gynecological (12. 14: Delivery (8. 16: Blood Hematopoietic (4. 21: Injury, Poisoning & Drugs (4. 23 : Other (4. 

Total (100. 
Respiratory infections 

Hernia repair 

Trauma procedures 

Appendix G- Correct DRG for discharges incorrectly assigned to DRG 468€

Number Bed size 

(100 100- 299 300+ Total Concussion (Percent)

Sinus & mastoid procedures (4.

(4.

127 Heart failure & shock (4.

142 Syncope & collapse (4.

148 Lower gastrointestinal procedures (4.

154 Upper gastrointestinal procedures 0 (4.

161 (4.

205 Liver disorders (4.

210 Hip procedures (4.

218 Lower extremi ty procedures (4.

240 Connective tissue disorders (4.

264 Skin graft (4.

325 Urinary tract symptoms (8.

336 Transurethral prostatectomy (4.

354 Uterine malignancy procedures (4.

360 Vagina , cervix , & vulva procedures 0 (4. 

364 Conization (4. 

374 Vaginal delivery & sterilization (4. 

395 Red blood cell disorders (8. 

443 (4. 

461 Other diagnoses (4.

(4. Total 

(100. 
Appendix H-1: DRG 468 clinical review 

Number 

(Percent) 

Unnecessary

admissions 

Poor quality 

of care 

Premature 

discharge 

Appendix HPercent 

Unnecessary

admissions 

Poor quality 

care 

Prema ture 

discharge 

Bed size Weighted percentage

(100 100- 299 300+ Total Sample Discharge 

2 (8. 1 (3. o (0. (3. (2. 

2 (8. 2 (6. 1 (3. (6. (5. 

a (0. 1 (3. a (0. (1. 2) (1. 5) 

DRG 468 clinical review comparison 

Bed size Wei hted ercenta 000 100- 299 

Hospi tal 

(5. 

(8. 

(1.1) 

300+ Sample Discharge Hospital 

DRG 468€

NDRGVS 12. 10. 10. 10. 11. 3€

DRG 468 

NDRGVS 11. 4 

DRG 468 1. 2 1.5 1.1 

NDRGVS 1.1 1.4 
Appendix I: HCFA comments 
, 

.:. . 

'IC€

Da!t'€

Sub!ec:€

'10€

y !) .. )€

..IZ'€

Hr-j) FoG€ e /e..:y Health Care 

DEPARTME-'T OF HEALTH &. HL' ".A-' SERVICES nanCll1g AdmInIS:' 3:, a"" 

"DL'€

I'm-I€ Memorandum€

Err y COle'1.an


c:in inistrator€

Gr2 o;t DRG 468: Unrel ated Operati ng Room Procedures, 

0'-1- 12-83- 01170 

he Inspecto General 

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€

DATE SF.€

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 

The period studied was FY 1985. e believe that this report is out of

aa:e. 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 

pros pect i ve payment sys tem (PPS). h i 1 e we agree that cod i ng accuracy is 

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 

PROs review prospectively all bills for DRG 468. This 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 

being assigned to DRG 468. In looking at the data, we found that a

, as of 

large volume of cases fell into two distinct categories which 

O:toDer 1988, have been developed into two new DRGs. The number of 

cases which will now fall into DRG 468 has been substantially reduced 

ana will , therefore, directly impact on the OIG estimated savi gs. 

OIG Reco mendation 

The HCFA shou 1 d determi ne why the on-goi ng PRO rev i ew of " all" DRG 468 

discharges actually reabstracts only 80. 2 percent of this populatio 

HCFA Response 

OIG reported that during the first 18 months of the. second scope of work 

the PROs reviewed only 80. 2 percent of the cases assigned to DRG 468. 

HCFA' s official PRO Medical Review Activity Reports for the 24 months of 

-- the second scope of work, recei ved to date, show th at PROs reported 

reviewing 179, 598 or 91. 9 percent of the population of 195, 420 discharges 

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 

OIG Reco mendat ion 

The HCFA should reabstlact a large sample of DRG 468 bills for coding 

accuracy tbdetermine why the on-going PRO review 

of all DRG 468 

discharges fails to detect the 14. 0 percent (SuperPRO rate) to 

percent (OIG rate) of discharges incorrectly billed to DRG 468. 

HCFA Response 

We di sagree with thi s recommend at i on. Through the SuperPRO contract and 

' review of DRG 468 

evaluations protocols, HCFA is validating the PROs€

bi 11 s to determi ne if the PROs are mak i ng correct determi nat ions. These


results are used to identify problems and institute necessary corrective

action. 

DIG Recommendation 

The HCFA should reabstract a large sample of DRG 468 bills for coding 

accuracy to determine why Super PRO identifies only 14. 0 percent of , identifies 

incorrect PRO confirmation of DRG 468 bills, whereas this st. 

a 24. 8 percent rate. 
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 1 es. Under the scope of work , PROs wi 11 be reviewing a 50 percent sample of DRG 468. 

identified and corrective actions will be implemented when appropriate.€ Problem areas will be