From downcoding to upcoding: DRG based payment in hospitals
- PDF / 1,041,515 Bytes
- 26 Pages / 439.37 x 666.142 pts Page_size
- 62 Downloads / 141 Views
From downcoding to upcoding: DRG based payment in hospitals Carine Milcent1 Received: 29 November 2019 / Accepted: 12 October 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract A prospective disease group-based payment is a reimbursement rule used in a wide array of countries. It turns to be the hospital’s payment rule to imply. The secret of this payment is a fee payment as well as a hospital’s activity based payment. There is a consensus to consider this rule of payment as the least likely to be manipulated by the actors. However, the defined fee per group depends on recorded information that is then processed using complex algorithms. What if the data itself can be manipulated? The result would be a fee per group based on manipulated factors that would lead to an inefficient budget allocation between hospitals. Using a unique French longitudinal database with 145 million stays, I unambiguously demonstrate that the implementation of a finer classification led to an upcoding-learning effect. The end result has been a budget transfer from public nonresearch hospitals to for-profit hospitals. The 2009 policy lead to upcoding disconnected from any changes in the trend of production of care. Keywords Hospital stays · Diagnosis-related groups (DRGs) · Upcoding · Manipulated database · Heterogeneity in responses JEL Classification I18
Introduction Manipulating the data from patient’s health record during their stay in hospital is one way of shifting from one disease group (called DRG) to a more profitable one. Indeed, raw information manipulation allows coding changes to generate additional payment unrelated to the needs of patients (Steinwald and Dummit 1989). In this paper, I use a database that has undergone a change in the logic of construction of DRGs, the number of groups increasing from around 800–2200. This shift in classification logic created a natural experiment for testing whether French hospitals tend to enhance profit by taking advantage of regulatory loopholes through a behavior of upcoding (from an initial down-coding * Carine Milcent [email protected] 1
Health Economics, Center for National Scientific Research, CNRS – Paris School of Economics – PSE, 48 Bd Jourdan, 75014 Paris, France
13
Vol.:(0123456789)
C. Milcent
context). I also examine the heterogeneity in the response of hospitals to this change in coding structure. While DRG-based hospital payment systems may provide adequate reimbursement for the average patient within each DRG, they overpay hospitals for patients with below-average resource consumption and underpay for patients with above-average cost. In order to avoid creating perverse incentives, which could lead to patient selection or a priori treatment choices, DRG payments are adjusted to the expected cost of a patient stay. But studies in various countries, including France, have found that DRG classification did not explain all of the variation in cost between different stays (Häkkinen et al. 2012; Mason et al. 2012; Milcent 2017). While up
Data Loading...
