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Agenda 3M Background DRG Overview DRG Prerequisites
DRG Benefits & Examples IR- DRGs RTI Background Shadow Billing for Inpatient IR-DRGs Sensitivity Analyses Monitoring Adherence to the Projected Timeline Regulation and Compliance
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3M Health Information Systems
Clinical & Economic Research 1,400 U.S. EMPLOYEES 150 INTERNATIONAL Over 30 years of expertise in designing, maintaining and deploying solutions for better clinical and financial Performance. Nosology (e.g. Coders) NLP & Data Scientists Clinical Informatics Physician, Nurses Pharmacists… CUSTOMERS HOSPITALS PHYSICIANS PAYERS REGULATORS
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3M Health Information Systems
Regulator Provider Payer Workforce Experience 30+ years of Experience Implementing & Supporting DRG’s U.S.A. Classification Maintenance for CMS since 1983 ICD-9-CM to ICD-10-PCS P4P/P4Q initiatives in NY & MD United Kingdom - HRG Development (2013) Germany - AR-DRG to G-DRG localization - Calculation of Relative Weights - InEK MBDS data collection - Training for Providers & Payers UAE (Abu Dhabi) - 3M IR DRG adopted (2010) - DRG Assurance Training Chile - 3M IR DRG adopted (2011) Australia - AR DRG development license More than 10,000 clients in 25+ countries Expertise in supporting multiple terminologies, classifications and languages
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3M Health Information Systems
Projects led by 3M Classification Development & Maintenance USA CANADA UK AUSTRALIA HONG-KONG GERMANY Support for DRG Introduction BELGIUM CHILE GERMANY HONG-KONG QATAR SINGAPORE SPAIN UAE Computation of Relative Weights GERMANY ITALY PORTUGAL SINGAPORE SPAIN Reimbursement and Fee Schedule Development GERMANY QATAR USA For the reference see “Worldwide DRG-Related Projects Led by 3M” pdf Quality and Value-Based Initiatives GERMANY SPAIN USA Population-Based Initiatives CANADA ITALY SPAIN USA
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3M Classification and Payment Methodologies
Expert Driven, Enabling Advanced Variability Analysis Inpatient & Outpatient Population Health Risk Adjusted, Linking Clinical Patterns to Cost Patient Centered Risk Adjusted Data, Quality & Patient Safety Measures, Total Cost of Care Inpatient Grouper Severity and Risk of Mortality APR DRGs All Patient Refined Diagnosis Related Groups Outpatient Grouper EAPGs Enhanced Ambulatory Patient Groups International Grouper In & Outpatient IR-DRGs International Refined Diagnosis Related Groups Health status Grouper CRGs Clinical Risk Groups Identify preventable complications PPCs Potentially Preventable Complications Identify preventable readmissions PPRs Potentially Preventable Readmission s Defines 700+ patient episodes PFEs Patient Focused Episodes PFPs Population Focused Preventables PPA Potentially Preventable Initial Admissions PPV ED Visits PPS Potentially Preventable Services We have developed some of the leading classification and payment methodologies used not only in the US but around the world. This chart shows some of industry adopted DRGs for stratifying severity and risk of mortality of hospital cases, ambulatory DRGs, methodologies for identifying preventable events like readmissions or complications, and methodologies design to assess population, rather than individual encounter risks – so methodology to help identify and manage high risk groups within population and apply in care management and disease management initiatives. Value Index Score
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DRG Overview
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Health System Management
Transparency Production Efficiency Quality Management Cost Management Strategic Planning
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It started with a question…..
How could industrial methods of cost and quality control be adapted and applied to the hospital industry? Thompson to Fetter Yale University Asked by researchers a the Yale School of Health to researchers at the Yale School of Administrative Sciences.
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The answer ….. Another question… “What is the true product of the hospital?”
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Defining Hospital Products
PHYSICIAN ORDERS HOSPITAL OPERATIONS LABOR MATERIALS EQUIPMENT MANAGEMENT INPUTS INTERMEDIATE OUPUTS PATIENT DAYS MEALS LABORATORY PROCEDURES SURGICAL PROCEDURES MEDICATIONS PRODUCTS DELIVERY WITHOUT COMPLICATIONS APPENDECTOPMY WITHOUT COMPLICATIONS, AGE <70 w/o Co-morbidity & Complications The major function of a hospital is to provide patient care (diagnostic and therapeutic services) but in doing so the hospital also provides certain hotel and social services.. unlike many other enterprises, a hospital consists of two separate production functions: The first function is to convert raw materials (labor, supplies, equipment) into standard outputs (meals, clean linens, laboratory procedures etc.) -- while traditionally management of hospitals dealt mostly with management of separate departments responsible for the intermediate outputs , these intermediate output however, don’t constitute a real business of a hospital The second production function and the main business of a hospital is accept, evaluate and treat patients under the direction of physicians and by use of the intermediate outputs… . And so it is a bundle of these services and goods provided to a patient with a particular illness is a product of a hospital. To well manage a hospital one can no longer focus only on efficiency in the production of the intermediate product but also to be able to measure and evaluate the effectiveness of utilization of these intermediate products. (consistently efficient performance of the lab does not directly translate to efficient utilization – if a test is not used effectively or was ordered unnecessarily – it is a waste of a resource, no matter how efficiently it was produced. … Efficiency Effectiveness
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Basic Principals of Diagnosis Related Groups
PATIENT CARE PATIENT VARIABLES HOSPITAL VARIABLES DEMOGRAPHICS (AGE, SEX) PRINCIPLE DIAGNOSIS CO-MORBIDITIES PROCEDURES COMPLICATIONS DISCHARGE STATUS MINIMUM BASIC DATA SET [MBDS] GROUPS OF PATIENTS WITH HOMOGENOUS RESOURCE CONSUMPTION
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DRG as a hospital product
One DRG= One product= One cost
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Basic principals of Diagnosis Related Groups
DRGs are Cost homogeneous thus have similar patterns of resource use Patients in DRG are not identical Predict average level of resource use Clinically coherent thus with similar clinical characteristics Common organ system, etiology or clinical specialty Mutually exclusive 1 DRG = 1 Patient stay
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Diagnosis Related Groups (DRGs)
Case mix information can tell us how many resources our hospitals need according to the patients they actually treat First step in understanding quality issues
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DRG Prerequisites
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Basic principals of Diagnosis Related Groups
A method to define the “products” of the hospital Computed from routinely available data Principle diagnosis, complications & co-morbidities: ICD-10-CM Procedures: CPT Age Sex Discharge status [e.g. transfer, home, death] Weight on admission [newborns & neo-nates] Other [e.g. duration of mechanical ventilation]
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Information coded by Clinical Coders
Principal Diagnosis (definition??) Secondary diagnoses Co-morbidities relevant to the admission (present on admission) Complications – arise following admission Procedures performed (therapeutic & diagnostic)
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Importance of Data Quality
Documentation : Specificity, Completeness, Timeliness Coding: Accuracy, Consistency, Completeness Abstracted Data : Validated Abstracted data: Physicians, discharge disposition, admit/discharge dates.
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Complete Documentation Correct Medical Coding Correct DRG
Appropriate Reimbursement/Funding
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DRG Benefits & Examples
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You cannot manage what you do not measure
Improve Planning and Budgeting Define Data and Metrics Monitor Dashboards and Scorecards Analyze Reporting and Analytics Minimum Basic Dataset KPIs Length of Stay Mortality Case Mix Index
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Purpose of a DRG system To provide a classification system that is a better basis for: Management Budgeting Payment Profiling Benchmarking Clinical research Quality reporting
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Balancing Cost and Quality
Providers Payers Consumer
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Case Mix Analysis It is all about comparing data The Ministry compares
the Regions... The Regions compare the Hospitals... The Hospitals compare the Departments... The Departments compare the Physicians... Physicians compare… the Patients
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Case-Mix Index (CMI) A measure of the relative costliness of treating patients in a hospital Case mix index is calculated by: SUM (count * relative value) for each DRG total count An index of 1.15 means that the hospital’s patients are 15% more costly than average
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A Clinical Tool To Manage Resources and Control Quality
Casemix DRG’s A Clinical Tool To Manage Resources and Control Quality Coding Grouping DRG Accurately describes the patient activity for the encounter Benchmarking / Budgeting / Funding Consolidates the large and varied set of descriptors to manageable groups Clinical Coding Classifications ICD-9-CM ICD-9 ICD-10; ICD-10-AM ICPM, CPT, OPCS-4 ICD-10-CM /PCS Uses case mix to compare hospitals or resource allocation model among the groups DRG Classifications HCFA DRG’s AP-DRG’s APR-DRG’S AN-DRG’s & AR-DRG’s IR-DRG’s DRG Based Models Global Allocation Per DRG Allocation
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Two thirds of 89,000 cases were grouped into the top 20 DRGs
Top 20 Most Common DRGs 2/3 rs 60,000 Two thirds of 89,000 cases were grouped into the top 20 DRGs
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Cases above High Trim: 2.95%
Average Low Trim Cases above High Trim: 2.95% (days)
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Cases above the High Trim : 0.82%
Average Low Trim Cases above the High Trim : 0.82% (days)
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IR DRGs (International Refined Diagnosis Related Groups)
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Examples of DRG Family “Medicare”; MS-DRGs – original 1983
Includes Multiple Trauma, Transplants, Tracheostomy. Focus on Over 65 Population All Patient; AP-DRGs Adds DRGs for Newborns, Major Complications and Co-morbidities, Intended for a General Population All Patient Refined; APR-DRGs Based on AP-DRGs, Yale Refinements, CMS updates - Adds Four Severity Levels Based on Severity of Illness Risk of Mortality, and Resource Intensity--Minor, Moderate, Major, Extreme International Refined; IR-DRGs Based on AP-DRGs,Yale Refinements, CMS updates and the APR-DRGs - has Three Severity Levels Based on Severity of Illness-- Non-Complications, With Complications and with Major Complications
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DRG development IR-DRG MS-DRG G-DRG IR-DRG 2.x 1st Generation
2nd Generation GHS 2006 3rd Generation MS-DRG 2008 G-DRG 2003 IR-DRG 2.x 2004 4th Generation
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Conceptual Framework Once childbirth and newborn cases are attributed to Major Diagnostic Categories (MDC) 14 and 15, the procedural driven logic of IR-DRG look for relevant procedures: if so, these encounters are defined as procedural DRGs; if not, they become medical DRGs. Further on, as in other DRG systems, the allocation in appropriate MDC and medical DRGs is made using the principal diagnostic. Also the principal diagnostic/ MDC and an hierarchical class logic help define the most appropriate procedural DRG when there two or more relevant procedures in same encounter (see later)
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Procedure Classes Once the cases in MDC 14 & 15 are identified, next stage Tagging each procedure with a procedure class 7 classes – take into account: - the acceptable location where the procedure can be performed - the type and resource intensity of the procedure performed
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“Yes, But My Patients Are Sicker” Led to Inpatient Severity Levels
Minor: Uncomplicated Diabetes Mod: Diabetes with renal complications Major: Diabetes with ketoacidosis Minor: Difficulty breathing Mod: Emphysema Major: Respiratory Failure Minor: Hypertrophy of kidney Mod: Chronic Renal Failure Major: Acute Renal Failure
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IR DRG Classification SOI/ROM
MDC Major Diagnostic Category IR DRG Three Severity of Illness Subclasses Minor Hypertrophy of kidney Moderate Chronic renal failure Major Acute renal failure Three Risk of Mortality Subclasses Minor Impaired renal function Moderate Chronic renal failure Major Acute renal failure
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SOI and ROM are Independent …..
The severity of illness and risk of mortality subclass are calculated separately and may be different from each other. SOI = 3 Significant Organ Decomposition Acute Cholecystitis It is important to understand that Severity of Illness and Risk of Mortality are independent of each other. Acute Cholecystitis or Gall bladder attack – is a good example of this. SOI - The patient is severely ill, organ is in extreme state of decomposition ROM - However, today we have a very effective intervention that does not pose a high risk of death to the patient. ROM = 1 Low risk of mortality
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IR DRG Severity and Mortality Risk Adjustment for Heart Insufficiency
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Basic Principals of DRGs
PATIENT CARE PATIENT VARIABLES HOSPITAL VARIABLES DEMOGRAPHICS (AGE, SEX) PRINCIPLE DIAGNOSIS CO-MORBIDITIES PROCEDURES COMPLICATIONS DISCHARGE STATUS MINIMAL BASIC DATA SET [MBDS] GROUPS OF PATIENTS WITH HOMOGENOUS RESOURCE CONSUMPTION
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Research Triangle Institute (RTI) Michael Trisolini
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RTI – Who we are RTI is an independent, nonprofit institute that provides research, development, and technical services to government and commercial clients worldwide. Our mission is to improve the human condition by turning knowledge into practice.
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RTI Global Presence – Workforce
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RTI Health Research, Development, and Technical Service Areas
Global health Health economics & financing Health care quality Public health Health planning and policy Health information technology Health communication Epidemiology
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Phase I Timeline – February 2015 to July 2016 Implementation Planning
DHA Project Overview Phase I Timeline – February 2015 to July 2016 Planning Phase Current Situation Analysis Round Table Meeting Implementation Plan Implementation Planning Five-year Plan for 2016 to 2020
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DHA Project Overview (cont.)
Phase II Timeline – August 2016 to July 2018 IR-DRGs Implementation Dubai Health Care Cost Index IR-DRG Parameters & Implementation Monitoring, Policy, Training IR-DRG Monitoring Indicators Policy Briefs Training for DHA Staff
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Shadow Billing for Inpatient IR-DRGs
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Projected Timeline 1st Feb 2017 Shadow Billing Phase I
IR-DRG codes on eClaimLink 1st July 2017 Shadow Billing Phase II Estimated IR-DRG price added to claims Not affecting payments 1st April 2018 IR-DRG Prices Phase Affecting hospital payments
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Shadow Billing Goals Phase-in Transition Period – Experience other countries and in Abu Dhabi strongly suggest an IR-DRG transition period of 12 months or more Transition period enables hospitals, insurance companies, and other stakeholders time to adjust systems, staff and operations to the new financial incentives under IR-DRGs that are very different from the current fee-for-service payment system
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Shadow Billing Goals Start with Shadow Billing -- Include IR-DRGs on hospital inpatient claims for information only and not for payment for 12 months or more, while continuing fee-for-service payment to hospitals Shadow billing allows hospitals, insurance companies, and other stakeholders time to understand the details of IR-DRG payment system requirements and the impact of the new payment system on them
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Shadow Billing Goals (cont.)
Shadow billing allows time to adjust hospital systems, staff, financial management, and clinical operations. For example: Cost analysis by IR-DRG Medical records coding staff training Clinical staff managing hospital ancillary services utilization for efficiency versus for increasing billings At the same time, while managing for efficiency, also avoid under- utilization of hospital services needed by patients
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Goals of IR-DRG Payment
Goals of Bundling Services in IR-DRGs for Hospital Inpatient Payment Remove financial incentives for overtreatment or increasing volumes of care – laboratory tests, radiology, length of stay (LOS) in hospital – that exist in fee-for-service payment Provide financial rewards for efficient hospitals providing care that is less costly than the fixed DRG payment per inpatient stay Simplify hospital billing for inpatient care by reducing the number of units of service billed, simplify utilization review, fewer denials Provide flexibility for future implementation of paying for quality
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What do IR-DRG Payments Cover?
All Inpatient Hospital Services Are Covered by a DRG Payment, Including: Physician care Nursing care Technician services Therapies Radiology Laboratory Pharmaceuticals Room Meals And Others…
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Shadow Billing – Phase I
IR-DRG coding – Each inpatient stay needs to have an IR-DRG assigned using the 3M grouper software ICD-10 and CPT coding – An IR-DRG system depends upon accurate coding of all hospital services provided in inpatient hospital stays, and diagnoses, so hospital coding needs to be reviewed and upgraded if needed
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Shadow Billing – Phase I (cont.)
Standardizing payment terminology and claims data coding for Encounter Type – Defining key measures of hospital use and cost For example, define what constitutes an inpatient stay that will be paid using IR-DRGs, versus outpatient care Is one overnight in the hospital required to define an inpatient stay, or patient’s presence in the hospital for the midnight census, or formal admission by a doctor to define an inpatient stay Other rules, regulations, data dictionaries for claims data coding and IR-DRG payment Consultation and discussion among stakeholders
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Shadow Billing – Phase I (cont.)
Ensuring other claims data fields are defined in detail and coding is complete and consistent across all hospitals Ensuring that patient demographic data and unique identifiers are complete and consistent in all member registries for health insurance companies
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Shadow Billing – Phase II
Estimated payments added to claims for information only to provide hospitals with information on the new IR-DRG payment system, not affecting hospital payment that continues under fee- for-service Enables hospitals time to adjust systems, staff, financial management, and clinical operations to the new types of payment information and financial incentives under the IR-DRG system Consultation and discussion among stakeholders
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Sensitivity Analyses
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Sensitivity Analyses Goals and Methods
To assess the planned Dubai IR-DRG payment system for biases and understand the potential effects of the IR-DRG implementation on the Dubai health care system Conducted at the hospital, insurer, IR-DRG, and healthcare sector levels during the shadow billing period initially, and also continuing Use DHA’s eClaimLink claims data and IR-DRG payment calculation parameters developed to reflect the Dubai health care system
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Types of Sensitivity Analyses
Overall Dubai Health Care System Compare overall total payments made to all hospitals in Dubai under the current fee-for-service (FFS) payment system to overall total payments that all hospitals would receive using the IR-DRG payment system. Dubai Geographic Areas Compare overall total payments made to all hospitals in different geographic areas of Dubai (e.g. Jumeirah vs. Karama) under the current FFS payment system and under the IR-DRG payment system.
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Types of Sensitivity Analyses (cont.)
Dubai IR-DRGs Compare overall payments and per by IR-DRG admission payments made under the current FFS system and under the proposed IR-DRG system. Dubai Hospitals Compare overall payments and per admission IR-DRG payments made to individual hospitals in Dubai by hospital under FFS and under the IR-DRG system.
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Types of Sensitivity Analyses (cont.)
Dubai Insurers Compare overall and per admission IR-DRG payments made by health insurance company under both the current FFS payment system and under the IR-DRG system.
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Monitoring
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Need for Monitoring IR-DRGs by DHA
Incentives for increasing the number of hospital admissions to increase hospital revenue from additional IR-DRG payments Incentives for decreasing services and quality of care for patients to reduce hospital costs per admissions to increase profits in relation to the fixed IR- DRG payment per admission Incentives for upcoding CPT procedure codes and ICD-10 diagnosis codes in hospital inpatient claims to move to IR-DRG with higher payment rate (increase severity adjuster)
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Dubai health sector-wide
Types of Monitoring All hospitals – Dubai health sector-wide Individual Dubai hospitals Dubai IR-DRGs
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Monitoring 1 – Dubai Health Sector-wide
Trends over time – hospital admissions, readmissions, average length of stay, transfers of patients to other hospitals New hospital openings, hospital closures, hospital services added, hospital services dropped Patient safety events – hospital acquired conditions (HACs), patient safety indicators (PSIs), never events, hospital acquired infections (HAIs) Changes in CPT procedure codes, ICD-10 diagnosis codes, average case-mix Medical records audits of procedure codes, diagnosis codes
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Monitoring 2 – Individual Dubai Hospitals
Trends over time – individual hospital payments, individual hospital case-mix, individual hospital occupancy rate, average length of stay, number of ICU days Starting or stopping hospital admissions for specific IR-DRGs Changes in the numbers of outpatient procedures, outpatient visits, ED visits Medical records audits of procedure codes, diagnosis codes, that are included in the claims data and used to assign IR-DRGs and severity of illness (SOI) levels for payment
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Monitoring 3 – Individual Dubai IR-DRGs
Trends over time Number of times billed per month overall for high volume IR-DRGs, Number of times billed per month by each individual hospital for high volume IR-DRGs, Changes in severity of illness levels (SOI) billed for high volume DRGs Starting or stopping billing for specific IR-DRGs
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Regulation and Compliance
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Adherence to the Projected Timeline
1st Feb 2017 Shadow Billing Phase I IR-DRG codes on eClaimLink 1st July 2017 Shadow Billing Phase II Estimated IR-DRG price added to claims Not affecting payments 1st April 2018 IR-DRG Prices Phase Affecting hospital payments
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Regulation and Compliance
Failure to complete shadow billing will have a direct impact on parameters that are vital to billing using the IR-DRG system. As a result…. From 1st of March, claims submitted to eClaimLink will be rejected if DRG codes are not included Technically, the DRG code will be mandatory on the claim schema.
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Q&A
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