Recovery Audit and DRG

DRG classifies the hospital production into groups (and inside them into splits), that are both clinical as well as cost related. The clinical as well as the economical relevance have to be valid AT THE SAME TIME. It is a crucial rule from the recovery auditor’s point of view. The splits inside of the DRG base signals which cases were more complicated, i.e. where the secondary diagnosis made the patients recovery more resource demanding. Anytime this rule is bypassed (intentionally, or unintentionally) we speak about upcoding (drg creep).

In case that a hospital marks a patient as a complicated one (CC, or MCC), i.e. it codes it with a relevant secondary diagnoses (sdx), IT HAS TO BE SURE, THAT IT HAS REALLY INCREASED THE OVERALL TREATMENT COST. Otherwise, it can be sanctioned for a fraudulent coding (upcoding, drg - creep). The cost increase should be clearly demonstrable in the patient documentation (e.g. longer LOS, higher consumtion of medication etc.).

This situaton motivates both, providers as well as payors, to pay a good attention to the coding process and its results not only from the clinical perspective, but also from the economic one. To summarize it, we speak now rather about clinical - economic revision on the side of hospital, or about clinical – economic audit on the side of health insurers.

State of the art DRG auditing systems work on the basis of so called unsupervised detection – using customized software to browse all the cases and evaluate the homogeneity of their features (split distribution, treatment features..). Recovery audit specialists work later on with output of the unsupervised detection.

All the above mentioned findings were incorporated into our revision / recovery audit sw application. It works with clinical – economic profiles of EVERZ SINGLE CASE INSIDE OF DRG BASE and compares it treatment features with indicated level of complication (as coded by the hospital).

Recovery Audit Method and PER CASE


    Targets those DRG bases, that show atypical distribution patterns. It can usually mean, that the hospital either codes the cases mistakenly (with or without intention) up to higher splits, or down (to lower splits). In both cases, the outcome is wrong. There will be either high risk of sanction for upcoding, or risk of economic loss incurred by improper coding (really expensive cases are coded as cheap ones and so are they reimbursed).

    • The picture shows a benchmarking of 13 comparable hospitals in terms of their KEP (clinical-economic) profiles in bDRG 1460 – Cesarean section. Every column belongs to a separate hospital. It is obvious from the comparison, that the frequency of occurence of major complications (MCC) is especially disproportionate for one of the hospital (with 72% of MCC). Despite of this unusually high level of complications, the average cost consumption throughout the KEP segments does not indicate a significant increase in the hospital care (which could be expected at this number of highly complicated cases. Such a disparity leads us to further steps in order to reveal details of a cost structure.


    Turning all the cases inside the DRG base into KEP (clinical – economic profile) structure and then analyse every single case KEP in terms of the relevance among its split and treatment features (ALOS, complement, medication and material consumption etc)

    • The picture shows a comparison between split distribution and relevant average cost. The suspicious provider (here marked as „Y“) is compared toward national benchmarks for big (A) and medium and small (B) hospitals – where the hospital „Y“ belongs to. It is straightforward, that while the ave cost consumption of the hospital „Y“, does not differ from the national average for the similar hospitals, the split distribution is quite opposite. As it can be demonstrated on big hospitals benchmarking – the increase of MCC from 7 to 11% is accompanied by increase of ave cost about 10.000,- CZK. Should the hospital „Y“ really treat such an extraordinary proportion of complicated cases, its ave cost consumption would have to skyrocket well above 150.000,- CZK.


    Audit of coding correctness from the point of current valid coding rules, set by health insurance companies. The coding rules serve as an instruction for a coding of specific situation. Since it can never be fully comprehensive, the emphasis should, in case of DRG recovery audit, always lay on the clinical – cost relevance.