CMI usage and calculations By: Deborah Balentine M.Ed, RHIA, CCS-P Case Mix Management CMI usage and calculations By: Deborah Balentine M.Ed, RHIA, CCS-P

What is a Case-Mix? Age Gender Type of Insurance Diagnosis Risk Factors Treatments received Resources used The case mix of a patient population is a description of that population based on any number of the following characteristics:

Purposes To determine reimbursement. DRGs APCS MPFS To describe a population being served. To identify differences in practice patterns or coding complexity. Case-mix methodologies are used for a number of purposes with the most common usage being for reimbursement. Case-mix methodology is used to determine relative weights and base payments for DRGs and APCs. Case-mix methodology is used with the MPFS when calculating the Geographic Practice Cost Index (GCPI). Case-mix methodology can be used for statistical purposes to describe or identify a particular patient population. Case-mix methodology can also be used to identify differences in coding practice patterns and the complexity of the coding because surgical cases are generally more resource extensive than medical cases.

Severity of Illness Classifications Extent of the disease Risk of mortality Need for intervention Urgency of care Intensity of resources Difficulty of treatment The most common case mix methodology is to group cases by diagnoses and procedures. The major criticism to this type of grouping is that the diagnoses and procedures do not accurately measure the severity of an illness. The APR-DRG case-mix methodology was developed to address those concerns.

Severity of Illness Classfications Adjusted Clinical Groups National Association of Children’s Hospital and Related Institutions (NACHRI) Medical Outcomes Study Short Form Health Survey Atlas System Severity of Illness Classifications includes the following: Adjusted Clinical Groups - classifies individuals into groups that are likely to have similar resource requirements. National Association of Children’s Hospitals and Related Institutions (NACHRI) - classifies diseases based on the progression of the disease, the anticipated course of the disease, and treatment goals. Medical Outcomes Study Short Form Health Survey - classifies by severity of the disease and health status measures. Also uses patient feedback to obtain a total picture of the disease process. Atlas System - uses information abstracted from the medical record from all points of care including ancillary service data excluding diagnosis data.

Diagnostic/Procedural/Severity Classifications Resource Utilization Groups (RUGs) Functional Related Group System (IRFPPS) Home Health Resource Grouping System (HHPPS) Some case mix classifications use a combination of diagnoses and procedures and severity of illness in their methodology. These systems are: Resource Utilization Groups - used in the skilled nursing facility prospective payment system (SNFPPS). Includes clinical factors such as cognition, sensory deficits and psychological well-being Functional Related Group System - used in the inpatient rehabilitation prospective payment system (IRFPPS). Includes clinical factors such as activities of daily living (ADLs) and spinal cord injury data. Home Health Resource Grouping System - used in the home health prospective payment system (HHPPS). Includes measuring the extent of pain, respiratory status, and integrity of the Integumentary system. Also uses social factors such as residential and caregiver demographics.

Risk Adjustment Age and gender adjustments Clinical risk adjustments Situation-specific adjustments Adjustments for specific clinical conditions Adjustments by specialty type Any method used to compare the severity of illness in one group of patients in comparison to the severity of illness in another group of patients. Used make a fair comparison of diverse populations and treatment patterns. Types of risk adjustments include:

Case-Mix Index Classification by Disease Conditions and/or Procedures Determines patterns of resource use Used to determine anticipated reimbursement. Comparison to other facilities The most commonly used case mix index uses disease staging as the basis for classifying patient with similar conditions to determine patterns of resource use. This type of case mix is also used by a facility to determine anticipated reimbursement and to compare the results to other facilities. The case mix index is the average of the relative weights of all cases treated at a given facility. The theoretical average CMI is 1.000. CMI’s over 1.000 signify more complex cases and CMI’s less than 1.000 signify less complex cases. Surgical cases have a higher CMI than medical cases.

Factors that influence Case-Mix Changes in Relative Weights Changes in Services Accuracy in Documentation and Coding Accuracy in DRG/APC assignment Factors that influence a facility’s case mix index include: Changes made in relative weight values Changes in the type of services offered or provided by the facility Accuracy of documentation and coding in DRG or APC assignment

Calculating Case-Mix Indexes Calculating Total CMS Relative Weight Calculating Case Mix Index Calculating Medicare Payment Determining the Highest Relative Weight Case Mix Analysis begins with the calculation of the Case Mix Index. The Case-Mix Index is the average of the relative weights of all cases treated at a given facility or by a given physician. The Case Mix index average is set at 1.0000.

Calculating Case-Mix Index Services to be measured Relative Weight # of Cases When calculating the Case Mix Index for a group of procedures, you will need the following information: Services to be measured – Most facilities calculate their case-mix index by using the most resource extensive procedures or by the reason for the admission (PDx). Relative Weights are determined by Medicare or other third-party payers # of Cases or Patients served for a particular service or procedure.

Case Mix Formulas Calculating Total CMS Relative Weights Calculating Medicare/Third-Party Payment Calculating Case-Mix Index Determining the Highest Relative Weight for a group of cases Calculating Total CMS Relative Weight – Multiply the “CMS Relative Weight” by the total number of cases (patients) in the DRG group. Calculating Medicare Payment – Multiply the reimbursement per case by the number of cases performed Calculating Case Mix Index - Add up the total number of CMS Relative Weights and divide by the total number of patients. Determining the Highest Relative Weight – The highest relative weight is the DRG with the highest total relative weight.

Calculating Total CMS Relative Weight Multiply the “CMS Relative Weight” by the total number of cases (patients) in the DRG group

Example One A facility has 29 Medicare cases that are assigned to DRG 69 which has a relative weight of 1.0005. What is the Total Relative Weight for the cases?

Answer 29.0145 1.0005 x 29

Example Two A facility has 15 Medicare cases that are assigned to DRG 117 which has a relative weight of 0.7789. What is the Total Relative Weight for all of the cases?

Answer 11.6835 0.7789 x 15

Calculating Medicare Payment Multiply the reimbursement per case by the number of cases performed

Example Three A facility has 22 Medicare cases which are reimbursed at $6,175 per case. What is the total Medicare reimbursement for all of the cases?

Answer $135,850.00 $6,175 x 22

Example Four A facility has 59 Medicare cases that are assigned to DRG 175 which has a relative weight of 0.9557. If the hospital PPS rate is $4,200, what is the total reimbursement for all of the cases? This calculation sometimes requires a second step in which you must determine the DRG payment first

Answer $236,822.46 Step One: Calculate the reimbursement per case 0.9557 x $4,200 (PPS rate) = $4,013.94 Step Two: Multiply by the number of cases $4,013.94 x 59 = $236,822.46

Calculating Case Mix Index The total number of CMS Relative Weights divided by the total number of patients served.

Example Five The top ten DRG surgical procedures performed by a facility have a total CMS Relative Weight of 45.8775. If the total number of patients served is 29, what is the Case-Mix Index for the facility?

Answer 1.5819 44.8775 / 29 = 1.5819

Example Six The top ten DRG medical procedures performed by a facility have a total CMS Relative Weight of 23.6651 If the number of patients served is 55, what is the Case-Mix Index for the facility?

Answer 0.4302 23.6651 / 55 = 0.43027 or 0.43028 Surgical DRG Cases have higher CMI’s than DRG medical cases.

Recap The case mix of a patient population is a description of that population based on any number of characteristics. Case-Mix indexes are used to describe a population that is being served, to determine reimbursement, and to identify differences in practice patterns or coding complexity. The most commonly used Case-Mix Index uses disease conditions and/or procedures to determine resource use.

Recap (cont.) Severity of Illness case-mix methodologies were developed to address concerns that traditional case-mix methodologies do not capture the severity of an illness. Risk Adjustment is any method used to compare the severity of illness in one group of patients in comparison to the severity of illness in another group of patients. Used make a fair comparison of diverse populations and treatment patterns