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DRG System Observed by Computer Network
A P R I L 1984, VOL 39, NO 5
AORN JOURNAL
DRG System Observed by Computer Network
M
ost of us by now know the basics of how the new Medicare system of prospective payment based on DRGs (diagnosis-related groups) will work, but the system for hospital monitoring has not been as well-defined. In a recent article for Nursing & Health Cure, Franklin A Shaffer, RN, EdD, deputy director for operations, National League for Nursing, New York City, described the computer tracking system that will be used under the new DRG program. The nucleus of the nationwide computer network has been set up in the Health Care Financing Administration’s (HCFA) Baltimore headquarters to monitor every step a hospital takes under the prospective payment system. By observing a hospital’s case-mix history, this Central Office and Regional Dispersal Terminal Network (CORDT) will allow HCFA to determine whether or not proprietary hospitals will make large profits under the prospective payment system. Approximately 1,500 hospitals are now under the HCFA prospective payment system and monitored by CORDT. By fiscal year 1984, all individual acute care hospitals will be on the prospective payment system. But how does the CORDT system work in actual practice? One thing the network does is monitor every readmission that takes place within seven days of discharge because these returns for treatment avoid the current cost ceilings. Transfers of patients from acute care units to units excluded from the prospective payment system ceilings are also closely tracked. Another way the CORDT system locates cost ceiling avoidance is by monitoring all transfers 878
from prospective payment system hospitals to those still based on cost-based reimbursement. In addition, a random sample of 5% of all admissions will be chosen by CORDT in an effort to determine whether services are necessary and appropriate. All patients requiring longer than average hospital stays, termed ourliers, will be closely monitored to ensure that they are not avoiding cost ceilings. Surgical procedures will be closely observed for possible misclassification in highlevel reimbursement slots. Admission patient monitoring (APM) is the focal point of CORDT in detecting admission abuses. APM involves entering data generated from reviews of hospital admission records by the professional standards review organization (PSRO) or fiscal intermediary. When entered into the IBM computer in Baltimore, these data comprise a profile of each hospital and compare it to the hospital’s previous history. Comparisons are then made to other hospitals in the region, the state, and nationwide. When questionable admissions patterns are found, APM triggers a corrective action program, which includes PSRO discussion of educational activities to correct the questionable admissions patterns. In addition, all of the hospital’s future admissions are reviewed more intensively by the PSRO, focusing on specific diagnoses or physician cases; and preadmission reviews may be required, as well as payments for inappropriate admissions. The most extreme punitive action is the imposition of civil monetary penalties on these hospitals with questionable admissions policies.
AORN JOURNAL
DRG System Observed by Computer Network
M
ost of us by now know the basics of how the new Medicare system of prospective payment based on DRGs (diagnosis-related groups) will work, but the system for hospital monitoring has not been as well-defined. In a recent article for Nursing & Health Cure, Franklin A Shaffer, RN, EdD, deputy director for operations, National League for Nursing, New York City, described the computer tracking system that will be used under the new DRG program. The nucleus of the nationwide computer network has been set up in the Health Care Financing Administration’s (HCFA) Baltimore headquarters to monitor every step a hospital takes under the prospective payment system. By observing a hospital’s case-mix history, this Central Office and Regional Dispersal Terminal Network (CORDT) will allow HCFA to determine whether or not proprietary hospitals will make large profits under the prospective payment system. Approximately 1,500 hospitals are now under the HCFA prospective payment system and monitored by CORDT. By fiscal year 1984, all individual acute care hospitals will be on the prospective payment system. But how does the CORDT system work in actual practice? One thing the network does is monitor every readmission that takes place within seven days of discharge because these returns for treatment avoid the current cost ceilings. Transfers of patients from acute care units to units excluded from the prospective payment system ceilings are also closely tracked. Another way the CORDT system locates cost ceiling avoidance is by monitoring all transfers 878
from prospective payment system hospitals to those still based on cost-based reimbursement. In addition, a random sample of 5% of all admissions will be chosen by CORDT in an effort to determine whether services are necessary and appropriate. All patients requiring longer than average hospital stays, termed ourliers, will be closely monitored to ensure that they are not avoiding cost ceilings. Surgical procedures will be closely observed for possible misclassification in highlevel reimbursement slots. Admission patient monitoring (APM) is the focal point of CORDT in detecting admission abuses. APM involves entering data generated from reviews of hospital admission records by the professional standards review organization (PSRO) or fiscal intermediary. When entered into the IBM computer in Baltimore, these data comprise a profile of each hospital and compare it to the hospital’s previous history. Comparisons are then made to other hospitals in the region, the state, and nationwide. When questionable admissions patterns are found, APM triggers a corrective action program, which includes PSRO discussion of educational activities to correct the questionable admissions patterns. In addition, all of the hospital’s future admissions are reviewed more intensively by the PSRO, focusing on specific diagnoses or physician cases; and preadmission reviews may be required, as well as payments for inappropriate admissions. The most extreme punitive action is the imposition of civil monetary penalties on these hospitals with questionable admissions policies.