Table 7.

Comparison of Payment to Actual Costs for Three DRG Systems for Neonates by Discharge Destination

Neonates by Discharge
Destination
Case TotalsRatio of Payment to Cost
Total
Cases
Total
Costs
(000s)
Average
Cost
per Case
Medicare
DRGs
(V 12.0)
AP-DRGs
(V 12.0)
AP-DRGs
Versus
Medicare
DRGs
APR-DRGs
(V 12.0)
APR-DRGs
Versus
Medicare
DRGs
Neonates (age 0–28 days):
 Discharged to home482 608$  906 627$  18790.9541.016+6.5%0.965+1.2%
 Discharged to home with home
 health services
   5224$   71 571$13 7000.5650.845+49.6%0.899+59.1%
 Discharged died   2371$   67 929$28 6500.4940.843+70.6%1.495+202.6%
 Discharged to other destinations   2355$   20 163$  85621.0071.076+6.9%1.255+24.6%
Total492 558$1 066 290$  21640.8990.994+10.6%1.000+11.2%
  • This is simplified payment simulation with entire payment based on DRG weight and no outlier or facility level adjustments.

    Costs include hospital operating and capital costs, exclusive of graduate medical costs, adjusted by HCFA area wage index.

    There are no statistics above for neonates discharged to other acute hospital. This is because all patients discharged to other acute hospitals were removed from the study's analytic data files to ensure that only patients with a complete acute care hospitalization experience were included.

    Discharged to other destinations includes skilled nursing facility, intermediate care facility, other institution, and left against medical advice. Four-fifths of these patients are discharged to “other institution” and on closer inspection it appears that many of these patients were probably discharged to other hospitals (but were miscoded), thus explaining why total payment exceed total costs. (ie, full payment for partial acute care hospitalization).