1. 3M Health Information Systems APR-DRGs: A Practical Update

2. This Session Will Provide the Attendee with an Understanding of: The development of APR-DRGs The use of severity to define and compare a patient population Application by agencies / associations Current APR-DRG research & development

3. APR-DRGs A tool to help analyze and report severity adjusted inpatient data Developed by Healthcare Professionals for Healthcare Professionals

4. NACHRI Pediatric DRG Modifications Medicare DRG Updates New York AP-DRG Expansion Yale DRG Refinements APR-DRGs Evolution of the APR-DRG’s

5. The Use Of Inpatient Claims Data For Outcomes / Profiling studies There are advantages to using of inpatient claims data for QI & UM management purposes: With the implementation of Diagnosis Related Groups (DRGs) there is an extended period of experience with inpatient coding As there are significant financial issues at stake for the hospital, there typically is considerable effort to code as accurately as possible

6. 3M™ APR-DRG Assignment is Driven by: Principal diagnosis Procedures performed All secondary diagnoses Age, sex Discharge disposition

7. Definitions Definitions Severity of Illness: The extent of physiologic decompensation or organ system loss of function Risk of Mortality: The likelihood of dying Resource Intensity: The relative volume and types of diagnostic, therapeutic and bed services used in the management of a particular disease

8. APR-DRG Descriptors In the APR-DRG system a patient is assigned three distinct descriptors: 1. Base APR-DRG 2. One of four Severity of Illness subclasses 3. One of four Risk of Mortality subclasses

9. 357 DRGs - 1422 Categories 3M™ APR-DRG Classification System Subclasses are comparable within an APR-DRG but not between APR-DRG’s. Subclasses provide information regarding relative not absolute severity.

10. Examples of Severity of Illness Levels

11. Examples of Standard Risk of Mortality Levels

12. APR-DRGs Are A Categorical Clinical Model APR-DRGs are a clinical model that has been extensively refined with historical data Different clinical models are developed for 355 different types of patients Clinical models verified with data Final decisions were always clinical

13. APR-DRGs are a Categorical Clinical Model (Cont’d.) Expected values are computed using APR- DRG norms Norms are average values of resource use or mortality for each APR-DRG subclass An extensive set of APR-DRG norms are produced and updated annually National / Regional / Hospital Type / Payer Specific

14. Level of Secondary Diagnosis for Severity of Illness and Risk of Mortality can be Different A patient with acute cholecystitis has a significant amount of organ decompensation, but a low risk of dying: Severity of Illness:3 Risk of Mortality:1

15. Level of Secondary Diagnosis for Severity of Illness and Risk of Mortality can be Different In general, except for malignancies and certain extreme acute diseases, the risk of mortality level is lower than the severity of illness levelIn general, except for malignancies and certain extreme acute diseases, the risk of mortality level is lower than the severity of illness level Traumatic amputation of arm, acute cholecystitis and acute osteomyelitis are a major severity of illness level but a minor risk of mortality levelTraumatic amputation of arm, acute cholecystitis and acute osteomyelitis are a major severity of illness level but a minor risk of mortality level Death is a relatively rare outcomeDeath is a relatively rare outcome

16. Outcome Measures which can be Examined Using APR-DRGs include: Severity Mortality Certain types of complication rates HCUP Quality Indicators LOS Charges Readmission rates Infection rates Profiling outcomes and resource use

17. Measures which can be Examined Using APR-DRGs include: Evaluating physician profiles for best practice models Developing and supporting clinical pathways Benchmarking Improving accuracy of medical record coding/documentation Negotiating managed care contracts Responding to comparative data

18. Who Is Profiling Hospitals & Physicians? Federal/state regulatory agencies Joint Commission on Accreditation of Healthcare Organizations HCFA Peer review organizations Managed care payors Third-party payors Profiling agencies Hospitals Physician groups State Health Departments Employers Public-Internet

19. Actual Versus Expected Average Pharmacy Charge by Patient Severity Level: Benchmarking Resources

20. Determining Severity / Mortality Subclass Determining the of subclass values uses a three phase processDetermining the of subclass values uses a three phase process The base APR-DRGs for severity of illness and risk of mortality are the sameThe base APR-DRGs for severity of illness and risk of mortality are the same

21. APR-DRG Subclass Assignment Phase 1: Determine the SOI / ROM level for each secondary diagnosis: Phase 2: Determine the base SOI / ROM level for the patient: Phase 3: Determine the final SOI / ROM level for the patient: SOI = Severity of Illness ROM = Risk of Mortality

22. Number of APR-DRGs There are 355 base APR-DRGsThere are 355 base APR-DRGs Each APR-DRG is subdivided into four severity of illness subclasses and four risk of mortality subclassesEach APR-DRG is subdivided into four severity of illness subclasses and four risk of mortality subclasses In addition there are two error APR-DRGs (955,956) that are not subdivided into subclassesIn addition there are two error APR-DRGs (955,956) that are not subdivided into subclasses The combination of APR-DRG and subclasses results in 1422 APR-DRGsThe combination of APR-DRG and subclasses results in 1422 APR-DRGs

23. APR-DRGs are the Most Widely Used Severity of Illness System Agency for Research & Quality – HCUP II quality indicators Several payers evaluating for payment purposes 22 states use APR-DRGs for public dissemination of provider profiles 1400 individual hospitals have APR-DRG software Many major hospital groups and vendors have standardized on APR-DRGs

24. APR – DRG Clinical Research Secondary Diagnosis Complication vs Co-morbidity Updates Code updates every October Grouper update 2-3 years Version 19 – scheduled release summer 2001

25. Summary APR-DRGs can be used to identify utilization patterns APR-DRGs can be used to begin continuous quality improvement and outcome studies APR-DRGs provide a more effective basis for communicating with medical staffs APR-DRGs are an effective means of evaluating resources and outcomes data APR-DRGs are used in public release of data APR-DRGs are continually being evaluated and improved

26. APR-DRG data in TRENDSTAR TRENDSTARTRENDSTAR Patient Data sent to the PC for APR-DRG Grouping 2 1 Patient record updated with: APR-DRG Code Severity of Illness Code Mortality code 3M APR-DRG Grouper Installed on local PC

27. Uses of APR-DRG Information Patients adjusted for severity Comparative data among hospitals Examine mortality rates based on mortality risk assignment Development of clinical pathways Quality improvement initiatives Contract negotiation Identification of disproportionate share of major and extreme severity levels Analysis of net income for APR-DRGs based on severity levels