Medicaid prospective payment: case-mix increase |
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Authors: | Baker S L Kronenfeld J J |
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Institution: | Department of Health Administration, School of Public Health, University of South Carolina, Columbia 29208. |
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Abstract: | South Carolina Medicaid implemented prospective payment by diagnosis-related group (DRG) for inpatient care. The rate of complications among newborns and deliveries doubled immediately. The case-mix index for newborns increased 66.6 percent, which increased the total Medicaid hospital expenditure 5.5 percent. Outlier payments increased total expenditure further. DRG distribution change among newborns has a large impact on spending because newborn complication DRGs have high weights. States adopting a DRG-based payment system for Medicaid should anticipate a greater increase in case mix than Medicare experienced. |
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