Special Article
Possible Influence of the Prospective Payment System on the Assignment of Discharge Diagnoses for Coronary Heart Disease
N Engl J Med 1993; 329:931-935September 23, 1993
- Abstract
Background
The prospective payment system, under which diagnosis-related groups (DRGs) are used to reimburse hospitals for the care of Medicare patients, replaced the fee-for-service method of payment in Rhode Island in 1983 and in Massachusetts in 1985. Changes in financial incentives resulting from the use of the DRG system may have influenced the assignment of discharge diagnostic codes away from those with lower reimbursement toward codes with higher reimbursement.
Methods
We collected data from the hospital records of patients 35 through 74 years of age who were discharged with codes 410 through 414 (representing various categories of coronary heart disease) of the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM). The patients were discharged from seven hospitals in two New England communities (one in Rhode Island and one in Massachusetts) between 1980 and 1988. The rates of diagnosis of various forms of coronary heart disease were determined by studying ICD-9-CM hospital discharge codes (codes 410 and 411 for acute forms of coronary heart disease and codes 412, 413, and 414 for chronic forms) and by using a computerized diagnostic algorithm designed to detect definite myocardial infarction and fatal coronary heart disease.
Results
The rates of definite coronary events diagnosed by the algorithm and by the study of ICD-9-CM codes 410 through 414 were constant or increased slightly during the study period. However, the frequency of assignment of codes for the acute forms of coronary heart disease (which entail higher reimbursement) rose from 35.2 percent to 48.4 percent among discharged patients with cardiac disease after the institution of DRGs. The majority of this increase was associated with the code for unstable angina pectoris. The frequency of assignment of codes for the chronic forms of coronary heart disease (which entail lower reimbursement) decreased reciprocally, from 64.8 percent to 51.6 percent (P<0.001).
Conclusions
Our data are consistent with the hypothesis that the prospective reimbursement system has influenced the assignment of hospital discharge codes in a way that would increase payment to hospitals. However, the data do not permit us to distinguish whether hospitals began to assign more precise diagnoses with the advent of the DRG system, or whether they began to favor diagnoses of acute conditions solely for financial reasons.
Media in This Article
Figure 1
Quarterly Rates of Coronary Events in Both Cities Studied, as Derived from ICD-9-CM Discharge Codes 410 through 414 and the Diagnostic Algorithm, before and after the Initiation of DRGs.Figure 2
Quarterly Rates of Hospital Discharge Diagnoses before and after the Institution of DRGs in Pawtucket, Rhode Island (Panel A), and a Massachusetts City (Panel B), 1980-1988.Article Activity
- Article
When it enacted the Tax Equity and Fiscal Responsibility Act of 1982, Congress modified the system by which hospitals are reimbursed for the care of Medicare patients1. The prospective payment system instituted was based on diagnosis-related groups (DRGs). Whereas in the past hospital reimbursement had been based on a fee-for-service method of payment, the DRG concept provided a fixed sum based on the usual nature and severity of the illness of patients in a diagnostic grouping. Thus, for example, discharging a patient with a diagnosis of stable angina pectoris resulted in a smaller payment to hospitals than discharging a patient with a diagnosis of acute myocardial infarction, regardless of the resources used.
Much concern has been expressed about the effects of DRGs on medical practice,2 physicians' patient loads,3 categorization of the severity of illness,4,5 and quality of care6. Epidemiologists who rely on the codes in the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) for their research are understandably concerned that coding may have changed with the advent of DRGs7. Although theoretically the assignment of ICD-9-CM discharge codes and that of DRGs are separate processes, concern has been expressed that changing financial incentives through the use of the DRG system may influence the assignment of discharge diagnostic codes and thereby affect regional or national health care statistics. Simborg8 described the potential financial impact of a prospective payment system based on DRGs, demonstrating that “DRG creep” could dramatically alter reimbursement under the prospective payment system. Subsequently, Cohen and colleagues compared data from the National Hospital Discharge Survey for 1984, after the institution of the DRG reimbursement system, with data from the period 1979 through 19837. They found a trend away from discharge diagnoses with lower reimbursement toward those with higher levels of reimbursement for patients with one of five peptic ulcer-related DRG assignments.
Beginning January 1, 1980, the Pawtucket Heart Health Program began surveillance for coronary heart disease in citizens of Pawtucket, Rhode Island, and citizens of a comparison city in Massachusetts. On October 1, 1983, Rhode Island, along with 45 other states, instituted the DRG-based reimbursement system. Four states, including Massachusetts, did not implement the DRG system until October 1, 1985. Thus, we were presented with an opportunity to determine whether the assignment of ICD-9-CM codes was influenced by the institution of the DRG system.
Methods
A standardized retrospective epidemiologic surveillance system is used by the Pawtucket Heart Health Program and two sister programs at Stanford University in California9 and the University of Minnesota in Minneapolis10. The Pawtucket system11-13 uses hospital discharge data obtained from the hospital associations of Rhode Island and Massachusetts. The system was developed to assess the hospital records of over 96 percent of the citizens of the two communities14,15. Subsequent data indicate, however, that the actual ascertainment of coronary heart disease among Pawtucket citizens is approximately 92 percent16. Hospital records were abstracted for patients 35 through 74 years of age who lived in one of the two cities, were discharged during the period 1980 through 1988 from one of the seven hospitals included in the surveillance program, and had coronary heart disease as indicated by the assignment of ICD-9-CM code 410 (acute myocardial infarction), 411 (unstable angina and other acute or subacute forms of ischemic heart disease), 412 (old myocardial infarction), 413 (angina pectoris), or 414 (other forms of chronic ischemic heart disease). We studied the records of 7893 patients from Pawtucket and 8130 patients from the comparison city. Measurements of creatine kinase enzymes were collected, along with values representing the upper limit of the normal range at the laboratory. Surgical procedures involving skeletal muscle were recorded; their occurrence resulted in a downgrading of the enzyme category (e.g., from abnormal to equivocal). Electrocardiograms were copied and were interpreted at the University of Minnesota Electrocardiographic Coding Center when interpretation was required by the computerized diagnostic algorithm.
The diagnostic algorithm12,13 was adapted from an algorithm originally described by Gillum and colleagues17. The algorithm relies on composite clinical judgment as summarized by the ICD-9-CM codes. It defined a definite event as a definite myocardial infarction (in 98 percent of patients) or as definite fatal coronary heart disease (in 2 percent). If a patient was discharged with an acute form of ischemic heart disease (code 410 or 411), a finding of abnormal creatine kinase levels (i.e., more than twice the upper limit of normal) would result in an assigned diagnosis of definite myocardial infarction. For the remainder of the patients with discharge code 410 or 411, electrocardiographic corroboration was required for the determination of a definite event. In the case of chronic forms of ischemic heart disease (codes 412, 413, and 414), a finding of abnormal enzymes with electrocardiographic corroboration led to an algorithm-determined diagnosis of definite myocardial infarction. In-hospital deaths were considered to result from definite fatal coronary heart disease when a discharge code of 410 through 414 was applied and documented coronary heart disease was found at autopsy without a competing cause of death.
Data obtained at autopsy in 116 patients were reviewed by a cardiologist. Gross anatomical or microscopical evidence (or both) resulted in the diagnosis of a definite event. Of the 68 events designated as definite on the basis of autopsy findings, 33 were so designated by the algorithm (sensitivity, 48.5 percent). Of the 48 patients with no evidence of an acute coronary event at autopsy, 47 were also negative according to the algorithm (specificity, 97.9 percent). These results may be misleading because of the selectivity of the cases studied at autopsy.
Although the age composition of the population of each city has been relatively stable, results are presented as event rates per 10,000 residents 35 through 74 years of age. Denominators were constructed by projecting age- and sex-specific populations on the basis of the 1980 census data (Speare A: personal communication). The size of the 1980 population at each age was extended forward one year at a time with national age-specific survival rates. Births were added, and the populations were combined in five-year age groups for each calendar year. People who migrated out of the community were subtracted, and those who migrated in were added.
Two methods of analysis were used. First, the assignment of hospital discharge codes was analyzed quarter by quarter for each city. Differences in the assignments made before and after October 1983 were assessed by a t-test for Pawtucket residents, and differences in assignments before and after October 1985 were similarly assessed for residents of the Massachusetts city. Then the data were combined to evaluate the hypothesis that the start of the DRG-based prospective payment system, regardless of the actual year of initiation, had not influenced the assignment of discharge codes. In addition, we performed a second analysis with the patients stratified according to age (35 through 64 years old and 65 through 74) to evaluate our hypothesis among Medicare patients only as compared with non-Medicare patients. Statistical comparisons, performed with SAS software, were made with a t-test and a chi-square test. All P values are two-tailed.
This research protocol was approved the the Memorial Hospital institutional review board. Permission to obtain medical records for the study was granted by the respective departments of health and by the individual hospitals involved in the study.
Results
The combined quarterly rates at which patients in Rhode Island and Massachusetts were discharged with an ICD-9-CM code for ischemic heart disease (410 through 414) during the three years before and after the initiation of the prospective payment system are shown in Figure 1Figure 1
Quarterly Rates of Coronary Events in Both Cities Studied, as Derived from ICD-9-CM Discharge Codes 410 through 414 and the Diagnostic Algorithm, before and after the Initiation of DRGs., along with the rate of definite coronary events obtained with the diagnostic algorithm. Time 0 was defined as the year in which the DRG-based hospital reimbursement system began (1983 in Rhode Island and 1985 in Massachusetts). It is particularly important to note that the rate of algorithm-assigned definite events remained essentially constant over the study period (t = -0.11, 26 df; P = 0.91). However, the rate changed at which ICD-9-CM discharge codes 410 through 414 were assigned. Figure 1 shows that the average quarterly rates at which these codes were assigned in the three years after the initiation of DRGs (135 per 10,000 population) increased from the average rate for the years before the initiation of DRGs (125 per 10,000 population) (t = -2.69, 26 df; P = 0.01).The rates of acute ischemic heart disease (as defined by ICD-9-CM codes 410 and 411) and chronic ischemic heart disease (codes 412 through 414) per 10,000 population are shown in Figure 2AFigure 2
Quarterly Rates of Hospital Discharge Diagnoses before and after the Institution of DRGs in Pawtucket, Rhode Island (Panel A), and a Massachusetts City (Panel B), 1980-1988. and Figure 2B for residents of Pawtucket and the comparison city, respectively. The data, plotted for each calendar quarter, show a clear increase in the rate of assignment of diagnostic codes 410 and 411 beginning in October 1983 in Pawtucket. A slow upward trend in the Massachusetts community was accentuated in October 1985. There was an accompanying, though less striking, decline in the rate of assignment of codes 412 through 414 that occurred contemporaneously in each state. The differences between the assignment rate for codes 412 through 414 and that for codes 410 and 411 were analyzed with use of quarterly data from each state. In Rhode Island, the assignment rate for codes 412 through 414 in the years before the initiation of DRGs was higher than that for codes 410 and 411. Although the rate of chronic ischemic heart disease continued to be higher than the rate of acute disease in the years after the change in reimbursement systems, the difference between the two rates was much smaller (t = -8.36, 34 df; P<0.001). Similarly, the assignment rate for codes 412 through 414 per 10,000 residents of the Massachusetts city was much higher than that for codes 410 and 411 in the years before the initiation of DRGs. After October 1985, however, the rates converged and the assignment rate for codes 410 and 411 surpassed that for codes 412 through 414 (t = -9.98, 34 df; P<0.001). Most of the increase in the assignment of ICD-9-CM codes 410 and 411 can be attributed to an increase in the use of code 411.1 (unstable angina pectoris). The use of code 410 remained relatively stable throughout the study period.To test the possibility that the convergence of rates after the introduction of DRGs was merely a continuation of preexisting trends, we projected the data for the period before DRGs in the two states separately, using linear regression. In Massachusetts, the rates were projected to intersect in the final quarter of 1994, and in Rhode Island the trends diverged. The trend for the use of codes 412 through 414 was uniform in Massachusetts, but it dropped significantly at the time DRGs were instituted in Rhode Island (P<0.005). The assignment rate for codes 410 and 411 reached a significantly higher plateau in both Massachusetts (P<0.01) and Rhode Island (P<0.002). Together, these results indicate that the hypothesis of the continuation of a preexisting trend did not sufficiently explain these data.
The composite assignment of discharge codes for either acute (ICD-9-CM codes 410 and 411) or more stable, chronic (codes 412 through 414) forms of ischemic heart disease before and after the institution of the prospective payment system is shown in Table 1Table 1
Assignment of Discharge Codes for Ischemic Heart Disease before and after the Institution of DRGs, in Both Cities Combined. with the data for Rhode Island and Massachusetts combined. The pre-DRG data from Rhode Island represent the period 1980 through the third quarter of 1983, and those for Massachusetts the period 1982 through the third quarter of 1985. Similarly, the post-DRG group contains data for Rhode Island from the fourth quarter of 1983 through the end of 1986 and data for Massachusetts from the fourth quarter of 1985 through the end of 1988. The proportion of code assignments to acute as compared with chronic ischemic heart disease changed significantly (chi-square = 221.8, P<0.001) after the initiation of DRGs. A larger proportion of patients were assigned to code 410 or code 411 after the institution of DRGs than were assigned before. Correspondingly, a smaller proportion of patients were assigned to codes 412 through 414 at discharge in the years after the change in the payment system than were assigned before.Table 2Table 2
Assignment of Discharge Codes before and after the Institution of DRGs, According to Year, in Both Cities Combined. shows annual data for Rhode Island and Massachusetts combined. Year 0 represents the year of implementation of the prospective payment system. This table shows that, overall, a change occurred in the assignment of ICD-9-CM codes 410 through 414 (chi-square = 207.3, 6 df; P<0.001). In the three years before the system change (years -3 through -1), the use of discharge codes 410 through 414 remained stable (chi-square = 1.0, 2 df; P = 0.60). Conversely, in the years after the institution of DRGs, there was an increasing use of the codes for acute (i.e., ICD-9-CM codes 410 and 411) rather than chronic (codes 412 through 414) forms of ischemic heart disease (chi-square = 9.58, 2 df; P = 0.008).The assignment of discharge codes before and after the institution of the prospective payment system among patients 35 to 64 years old and 65 to 74 years old, considered as two separate groups, is shown in Table 3Table 3
Assignment of Discharge Codes before and after the Institution of DRGs, According to Age Group, in Both Cities Combined.. The proportion of assignments to acute rather than chronic (or stable) forms of ischemic heart disease changed in both age groups after the initiation of DRGs. In the 35-to-64-year-old age group, 38 percent of the cases were assigned code 410 or 411 before the initiation of DRGs, as compared with 51 percent after their institution (chi-square = 103.85, 1 df; P<0.001). Similarly, in the 65-or-older age group, 32 percent of the pre-DRG cases were assigned code 410 or 411, as compared with almost 46 percent of the post-DRG cases (chi-square = 126.47, 1 df; P<0.001).Discussion
We were fortunate to have an unforeseen “natural” experiment within our reach. The existence of ongoing systems of surveillance for ischemic heart disease in two adjacent states affected at different times by new hospital-reimbursement policies instituted by the Health Care Financing Agency provided an opportunity to determine whether the prospective payment system influenced health statistics and the assignment of discharge codes. Our epidemiologic surveillance system was designed to use objective data abstracted from hospital records and to use a computerized algorithm to assign fatal and nonfatal outcomes of coronary disease. We required the system to be robust and resilient to changes, such as those in diagnostic criteria or those caused by the implementation of the prospective payment system. Although there are possible limitations to this study, the stability of the number of diagnoses made by the algorithm13 suggests that neither changes in patterns of hospitalization nor changes in treatment patterns over the decade have influenced the results. We were unable to determine the effect of the greater availability of coronary angiography on the increased assignment of code 411.1 (for unstable angina pectoris).
We conclude from the data presented here that the actual prevalence of myocardial infarction did not change significantly between 1980 and 1988 in the two New England communities but that there were significant changes in the rates of assignment of hospital discharge codes for acute and chronic forms of ischemic heart disease. After the initiation of DRGs, there was a decrease in the rate of assignment of codes for chronic ischemic heart disease and a corresponding increase in the rate of assignment of codes for acute ischemic heart disease. The majority of this shift occurred with regard to code 411.1, or unstable angina, a diagnosis that has rather flexible clinical criteria. These results are similar to those reported by Feinleib et al5. These changes in coding patterns occurred among the populations of cities from two adjacent states in two different years. In each instance, the year of the change coincided with the year of institution of the DRG-based prospective hospital-reimbursement system. The alternative hypothesis -- that the shifts in the assignment of discharge codes reflect an actual increase in the prevalence of acute ischemic heart disease -- is not supported by data from the algorithm to which constant objective criteria have been applied for the years in question. We conclude that the prospective reimbursement system has influenced the assignment of hospital discharge codes.
Our data do not permit us to judge whether the accuracy of coding of the discharge diagnosis has increased or decreased as a consequence of this change. However, fewer patients discharged with code 410 after the implementation of DRGs were classified as having acute myocardial infarctions by our computer algorithm than before the implementation of DRGs.
In addition, our analyses with stratification according to age group reveal that the prevalence of this practice extends beyond Medicare patients. The implications of these analyses are important, since it appears that the institution of DRGs has affected discharge codes and health statistics for non-Medicare patients as well. It is possible that more uniform training for medical-record coders after the initiation of DRGs resulted in the application of the new coding protocols across the board, without regard to Medicare status. This may explain why our data also show an effect on discharge codes in the 35-to-64-year-old age group.
The reasons for the change in discharge coding practices are not clear. The possibility that medical-record coders have paid more attention to accurate assignment because of the increased awareness brought about by the DRG system is supported by the fact that data on patients from 35 to 64 years of age showed changes similar to those for Medicare patients. Accordingly, it seems likely that hospitals sharpened their coding accuracy in order to maximize their reimbursement under the DRG system; we have no reason to believe that hospitals were assigning false diagnoses for financial gain. Also, the fact that all age groups studied were affected is consistent with the hypothesis that physicians began to diagnose acute forms of coronary disease, especially unstable angina, more frequently and that coders simply followed the change in physicians' practice. Alternatively, it is possible, as Simborg8 and Cohen et al.7 have suggested, that new financial incentives have influenced diagnoses. Whether the changes were begun by physicians, medical-records departments, or business offices is unclear at present and requires further study.
The effect of altered discharge coding is potentially great. In the case of ischemic heart disease, it has been clear that the mortality rate has been declining since approximately 196318. The ability to detect and track this important trend has depended on the assumption that the disease-labeling process has remained essentially stable over these years. The data in this paper cast doubt on the validity of that assumption for periods before and after the mid-1980s. Analyses of death certificates show that rates of death from acute myocardial infarction remained stable during the 1980s.
Our data pertain to ischemic heart disease, and we urge a note of caution with regard to the future surveillance of trends in ischemic heart disease in which hospital discharge data are used. As Cohen and colleagues7 have suggested, however, the phenomenon probably extends to other organ systems and disease groups. In efforts to minimize such vagaries in health care statistics, stable and reproducible criteria for the assignment of discharge codes should be developed in parallel with the institution of any diagnosis-dependent reimbursement system.
Supported in part by a grant (HL23629) from the National Heart, Lung, and Blood Institute.
We are indebted to Dr. Henry Feldman of the New England Research Institute for his diligent statistical and editing assistance, and to Dr. Thomas M. Lasater of the Pawtucket Heart Health Program for his assistance and support.
Source Information
From the Pawtucket Heart Health Program (A.R.A., K.L.L., J.L.M., R.A.C.) and the Department of Medicine (R.A.C.), Memorial Hospital of Rhode Island, Pawtucket; and the Departments of Community Health (A.R.A.) and Medicine (R.A.C.), Brown University School of Medicine, Providence -- all in Rhode Island.
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