An Overview of 3MTM All Patient Refined

Diagnostic Related Groups (3M APR DRG)

Lisa Lyons, Product Marketing Manager

3M HIS
1 July 13, 2012
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3M APR-DRG Education Session Agenda

 Introduction to APR DRG

 Differences between MS DRG and APR DRG
 APR-DRG clinical logic primer
 Uses of APR-DRGs.
 Steps for Your Organization’s Success.
 Frequently Asked Questions

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3M Approach

Value Based Health Care

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The Internet Dynamic- reputation

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2.Search engines
3.Search healthcare
information.
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Importance of Understanding Risk Adjusted Data

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How are 3M Methodologies updated?

• Clinical Panels review clinical logic for needed adjustments
• Hospitals
• State Agencies input
• New literature evaluated
• New code set
• Data is run to validate changes
• 2 tier Peer review of changes are reviewed
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Difference between CMS MS DRG and 3M APR DRG

MS DRG APR DRG

 Data Source - Medicare  Data Source- All payer
 Coverage- 65+ years old  Coverage includes all ages
 3 levels of severity  4 levels of severity
 Not all conditions contain 3  All conditions have 4 levels of
severity
levels of severity
 4 levels of risk of mortality for
 No risk categorization for risk of every condition.
dying  Used in both reimbursement
 Intended for reimbursement and quality performance
only measurement

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What are APR DRGs?

 All Patients Refined Diagnosis Related Groups (APR DRG) is

a classification system that classifies patients according to
their reason of admission, severity of illness and risk of
mortality.
 The patient characteristics used in the definition of the DRGs are
limited to information routinely collected on hospital abstract
systems.
 There are a manageable number of DRGs which encompass all
patients seen on an inpatient basis.
 Each DRG contains patients with a similar pattern of resource
intensity.
 Each DRG contains patients who are similar from a clinical
perspective.

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Summary of APR DRGs

25 MDCs
MDC

Severity of
314 APR DRGs +
Illness is used for Subdivide each base APR 2 error DRGs
payment DRG into subclasses

Four Severity of Illness Subclasses Four Risk of Mortality Subclasses

1. Minor 1. Minor
2. Moderate 2. Moderate
3. Major 3. Major
4. Extreme 4. Extreme

1256 Subclasses 1256 Subclasses

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Key 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

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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
Decompensation
Acute
Cholecystitis
ROM = 1
Low risk of mortality

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Example of Severity of Illness

Progression of Diagnoses
Severity Secondary Diagnosis of
Of Illness Diabetes Mellitus
1 Minor Uncomplicated Diabetes (250.0X)

2 Moderate Diabetes with Renal Manifestation (250.4X)

3 Major Diabetes with Ketoacidosis (250.1X)

4 Severe Diabetes with Hyperosmolar Coma (250.2X)

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Fundamental Principle of APR DRG Clinical Logic:

 Severity of illness and risk of mortality are dependent on the

patient’s underlying condition (i.e., the base APR DRG).

 High severity of illness and risk of mortality are characterized

by multiple serious diseases and the interaction of those
diseases.

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Explanation of APR DRG Methodology

6 steps

3 steps

9 steps

18 steps total
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Assign the Base

APR DRG

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SOI Phase I:
Step 1
Eliminate secondary diagnoses (SDX) that are
associated with principal diagnosis (PDX)

Phase I Step 2
Determine level Assign each secondary diagnosis its standard
of each severity of illness (SOI)
secondary 1-Minor 2-Moderate 3-Major 4-Extreme
diagnosis

Modify the standard severity of illness of each

secondary diagnosis based on:
Step 3 Age
Step 4 APR DRG and PDX (DRG 190)
Step 5 APR DRG
Step 6 Non-OR procedures

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SOI Phase II:

Step 7
Eliminate SDXs that are redundant with
other SDXs.

Phase II
Determines a base Step 8
subclass for the Combine all SDX to determine the base SOI
patient based on all subclass for the patient.
of the patient’s (Highest SOI used)
secondary
diagnoses
Step 9
Reduce the subclass of patients in
level 3 or 4 to next lower subclass if no
multiple secondary diagnoses at a high
severity of illness level exist.
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SOI Phase III: Modify patient SOI subclass based on the interaction of
Step 10 APR DRG and PDX
Step 11 APR DRG and age or APR DRG and PDX and age
Step 12 APR and non-OR procedure
Step 13 APR DRG and OR procedure

Modify patient SOI subclass based on the interaction of

Step 14 APR DRG and pairs of OR procedures
Step 15 APR DRG and ECMO and presence/absence
of certain OR procedures (DRG 583)
Step 16 APR DRG and PDX and non-OR procedures

Phase III Step 17

The final subclass for Establish a minimum SOI subclass based on
the patient is the presence of specific combinations of
determined categories of SDXs.

Step 18
Compute the final SOI subclass based on a
hierarchy established for steps 9-17
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MDC 15 Criteria

 Age at admission = 0 - 7 days

 Age at admission = 8 -14 days and birthweight <1,000 grams

 Age at admission = 8 -14 days, birthweight 1,000 -1,999

grams, and procedure from MDC 15 list of major O.R.
procedures

 Age at admission = 8 -14 days, birthweight 1,000 -1,999

grams, and mechanical ventilation (procedure codes 9670,
9671 and 9672)

 Age at admission = 8 -14 days and principal diagnosis of an

acute perinatal problem

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New criteria for low birth weight babies…

 DRG 589- Neonate BWT <500G or GA <24 weeks

 MDC 15 neonates who do not meet the criteria for DRGs 580,581, 583, or 588,
and
 Birthweight < 500 grams- (PDX, SDX, or entered*), or
 Birthweight 500-999 grams (PDX, SDX, or entered*) and gestational age <24
weeks (PDX or SDX of 76521), or
 Birthweight 500-749 grams (PDX,SDX, or entered*) and does not have any life
sustaining non-O.R. premature newborn intervention procedures as listed
 For SOI and ROM assignment, DRG 589 will bypass the usual 18 step algorithm

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PDX: 562.11 Diverticulitis of colon

Proc: 45.71 Multiple segmental resection of large intestine
Case 1 Case 2 Case 3 Case 4 Description
Secondary 569.41 569.41 569.41 569.41 Ulcer of anus and rectum
Diagnoses 560.9 560.9 560.9 Unspecified intestinal obstruction
422.99 422.99 Acute myocarditis
426.0 426.0 Atrioventricular block, complete
584.9 Acute renal failure, unspecified
CMS DRG 149 wo CC 148 w CC 148 w CC 148 w CC Major small and large
bowel procedures
APR DRG 221 Subclass 1 221 Subclass 2 221 Subclass 3 221 Subclass 4

CMS DRG 2.3164 4.2303 4.2303 4.2303 Payment weights*

APR DRG 1.3322 1.7681 2.9531 6.3732

* Payment weights are budget neutral and computed from a national database

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PDX V3000: Single liveborn, born in hospital, delivered without mention of

cesarean section
Admission age in days: 0
Discharge status: Home
Birthweight: 500G
Case 1 Case 2 Case 3 Case 4 Description
Secondary 748.4 748.4 748.4 Congenital Cystic Lung
Diagnoses 770.8 770.8 Respiratory Failure of NB
753.0 Renal Agenesis

CMS DRG 391 390 389 389 Normal Newborn/ Newborn with
other significant problems/Full Term
APR DRG 591 Subclass 1 591 Subclass 2 591Subclass 3 591 Subclass 4 Neonate w/ Maj. Prob.
Neonate, birth weight 500-749G,
without major procedure

CMS DRG 0.2560 0.2892 0.6430 0.6430 Payment weights*

APR DRG 0.1134 2.6320 12.8901 23.1141

* Payment weights are budget neutral and computed from a national database
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How is Chocolate Cake like APR DRG’s?

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Keys to Success

1. Complete and Accurate coding ( including POA)

 Changes to HIM productivity may be needed
2. Documentation Improvement/Concurrent review
3. Use APR DRG throughout organization
4. Know where you stand - Monitor rates
5. Tools to analyze your data - Distribution Matters
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CMS DRG to APR DRG Migration

Common
Concurrent Accurate
Complete and Language for
Review of representation of
Accurate Coding entire
Documentation CMI
organization

•Coders strong in Provides early Allows data to

anatomy, physiology, dialog and be used for
and patho-physiology queries for performance,
•Coders benefit from finance and
seeing grouped data
most accurate
data quality and IT

Clinical Specificity

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Severity-Based Index Example

Hospital E

Hospital D

Hospital C
0 0.2 0.4 0.6 0.8 1 1.2
Severity-Adjusted Average Length of Stay and Cost
6

L 5 Hospital A
O
S
4
Hospital B
3
$7,000 $11,000 $15,000 $19,000
COST
Data Source: 3M APR DRG Classification System utilizing MEDPAR 2007 data
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Severity Index Distribution for APR DRG

Peer Group Hospital A

APR DRG % of APR DRG % of

Subclass Cases Cases Subclass Cases Cases Variance
1 202 4.8% 1 44 24.0%
2 2,058 49.0% 2 102 55.7%
3 1,713 40.8% 3 33 18.0%
4 227 5.4% 4 4 2.2%
Total 4,200 100% Total 183 100%

Average Severity Index 4.4374 Average Severity Index 4.0424 -9.3%

On average, 55% of cases in the peer group are paid without a MCC
vs. Hospital A, which has 80% of their cases without a MCC

Data Source: 3M APR DRG Classification System utilizing MEDPAR 2007 data
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Who Uses APR DRGs:

Groups using the APR DRG
Providers
Quality Improvement
Clinical Improvement
Utilization Management
Strategic Planning
Operations/Finance
Payers
Managed care
States
Consumer
Public Reporting

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Why is Risk Adjustment so important for Analytics?

 Allows for apples to apples comparisons

 Make data more actionable
 Can be quantifiable
 Ties quality outcome to financial performance
 Better analytics
 More accurate trending
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Potentially Preventable Complications Profile

4 Hospital System Example:

$6.4M Annual PPC
Cost
$4.9M (77%)
represents the top 10
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PPR rates by SNF and Relative Severity.

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Who Uses APR DRGs:

Groups using the APR DRG
Providers
Quality Improvement
Clinical Improvement
Utilization Management
Strategic Planning
Operations/Finance
Payers
Managed care
States
Consumer
Public Reporting

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APR DRG is used for NJ gain sharing pilot

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Case study of how to calculate a reimbursement from APR DRG and SOI.
Base Relative
Est. Reimb.
Formula Rate Wt by
$$
Ex: $8200 APR/SOI

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Frequently Asked Questions

1. Why Non OR procedures?
2. Palliative Care - how is this considered in the ROM
assignment?
3. How many codes do you need for an accurate SOI?
4. Does the choice of principal diagnosis affect SOI and ROM?
5. What is the productivity difference of using APR DRG?
6. Will I see a difference in days to final bill?
7. What is the Admission APR DRG?
8. Do I need to use a different standard for coding?
9. Does APR DRG have interfaces to my HIS system?
10. Any other questions?

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Admission APR DRG

 Leverages POA
 Adds seven steps to the APR assignment process
 Used to Assign and risk adjust complication rates
 Used to Risk Adjust Mortality Rates

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REFERENCE

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Characteristics of APR DRGs:

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Key APR Outputs:

Core Grouping Software (CGS) & Grouper Plus System (GPS) and
Mainframe Groupers

 DRG  Diagnosis Affect DRG Flag

 MDC  Diagnosis Affect ROM
 SOI (subclass) Flag
 ROM (subclass)  Diagnosis Affect SOI Flag
 Diagnosis SOI (level)  Procedure Affect DRG
 Diagnosis ROM (level) Flag
 Procedure Affect ROM
Flag
 Procedure Affect SOI Flag
Full set of outputs available for both admission and discharge
APR DRGs
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3M Product Inputs & Outputs

 Only standard grouping inputs required

 Diagnoses with POA
 Procedures
 Patient age
 Patient sex
 Discharge status
 Birthweight
 No change to grouper outputs
 Changes to reimbursement outputs not yet known, expected to be
simplified.

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Products
 3M TM APR DRG grouping software
 Interactive – allows you to see the grouped information at the point of
coding
 Batch – Core grouping software – allows you to send a batch file of
abstracted data to report grouping information.
 3M TM Advanced Analyzer Software
 Works with Coding and Reimbursement system to assist in complete
and accurate coding.
 3M TM 360 Encompass suite
 Assists HIM departments in more accurate documentation, coding and
higher productivity.

 Other products and services are available.

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