Cover: The Medicare Case Mix Index Increase

The Medicare Case Mix Index Increase

Medical Practice Changes, Aging, and DRG Creep

Published 1985

by Grace M. Carter, Paul B. Ginsburg

Download eBook for Free

FormatFile SizeNotes
PDF file 2 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

In 1984, the Medicare program paid hospitals a higher amount per patient discharge than had been projected, because of a substantial shift in the mix of cases toward those with higher payment rates. This report examines what part of that change in measured case mix is due to medical practice changes, what part to a change in the resource needs of patients, and what part to changes in the coding of medical records in response to the incentives of a prospective payment system based on Diagnosis Related Groups (DRG). Two databases were used to investigate the causes of the Case Mix Index (CMI) increase: Medicare bills from calendar year 1981 and fiscal year 1984, and discharge abstract data from the Commission on Hospital and Professional Activities for January 1981 through September 1984. Medical practice changes account for only 2.1 percentage points of the 8.4 percent increase in the CMI; aging of the Medicare inpatient population explained none of the increase; and changes in documentation and coding account for the remaining 6.2 percentage point increase in the CMI, but further experience will determine whether the increase is a one-time adjustment to a new coding environment, or a phenomenon of continued inflation in the CMI due to aggressive coding practices.

This report is part of the RAND report series. The report was a product of RAND from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.