Question

Compare and contrast the MS-DRG and APR-DRG systems. What inferences can you draw from the information you uncovered on these two payment systems in the context of paying for performance?

Answer 1

MS- DRG (Medicare severity - Diagnosis Related Group) is a system that classifies the Medicare patient's stay in hospital into various groups to make easy of payment service. MS-DRG system sets the billing for Medicare patients. The MS-DRG is widely used because of increasing number of Medicare patient's. Here the payment is calculated by wage variation,percentage of Medicare patients that hospitals treat and geographic region. The MS-DRG system enables the CMS (Centers for Medicare and Medicaid Services) in order to provide the more reimbursement to the hospitals which are serving more severely sick patients. Hospitals which are serving less sick patients will get less reimbursement. Hospitals also gets adjusted reimbursement transferring of medicare patient's to another acute care facility . For the patient's who are transferring from one acute care facility to another, the patient paid as MS-DRG based on per-diem rate. Many state Medicare agencies proceeded to pay for inpatient hospitalization with MS-DRG system, so more are turning to APR-DRG (all patient refined-DRG). The MS- DRG is the most costly secondary diagnosis based on the national average, it also considers the reason for admission, and any costly procedures. MS-DRG in reality reflect how costly they tend to be on average in more population. in this system severity is not adjusted , therefore it does not provides good care of higher need patients- In this system higher complexity of DRG is formed due to resource intensity and by not addressing the severity of the illness or risk of mortality. AP-DRG was developed in order to reflect the clinical complexity of the patients population. AP-DRG payment was calculated by using assigned numerical weight which is multiplied by the fixed dollar amount particular for each provider. AP-DRG considers the severity of illness and risk of mortality. Many significance diagnosis can added to the AP-DRG clinical severity, as age,sex, procedures and discharge disposition. It has four levels (minor, moderate, major, severe) of severity of illness or risk of mortality, because of this AP-DRG do not only make easy reimbursement , but also enables the public and internal reporting on these two factors. Comparing MS-DRG and APR-DRG payment system, APR-DRG will be the good one to choose in-terms of paying performance.