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Case Mix Index (CMI): It all begins with the Physician's Pen

Published on 

Monday, December 3, 2012

 | Coding 

When talking to hospital staff and Physicians about high resource consumption, high readmission rates and high mortality rates, one explanation you almost always hear is “my patients are sicker.”

But how do you know if your patients are sicker? Understanding your facility’s Case Mix Index (CMI) is a good way to answer this question. However, to understand CMI you need to first understand the basic fundamentals of the Inpatient Prospective Payment System (IPPS) and how a Coder in a hospital determines the Diagnosis-Related Group (DRG) assignment for every hospital inpatient stay.


In 1983, Congress mandated the Inpatient Prospective Payment System (IPPS) for all Medicare inpatients. IPPS uses Diagnosis-Related Groups (DRGs) to determine reimbursement for hospitals.

Beginning October 1, 2007 the DRG system began transitioning to a new system called Medicare Severity MS-DRG. The transition to MS-DRGs allowed for an improved accounting of a hospital’s resource consumption for a patient and the patient’s severity of illness.

Assigning a DRG:

Principal Diagnosis:

The Uniform Hospital Discharge Data Set (UHDDS) defines the Principal Diagnosis as “the condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care.”

Comorbidities and Complications (CCs and MCCs):

These are conditions that increase a patient’s resource consumption and may cause an increase in length of stay compared to a patient admitted for the same condition without a co-morbidity or complication. When the DRG system transitioned to MS-DRGs the comorbidites and complications were divided into three levels. The three levels are DRGs without a CC or MCC, DRGs with a CC and DRGs with a MCC.

  • Comorbidities are the conditions that patients “bring with them” when they are admitted to a hospital and continue to require some type of treatment or monitoring while in the inpatient setting. For example:
  • A patient with a history of atrial fibrillation is continued on his home medications and placed on telemetry monitoring.
  • A patient with a history of Diabetes is placed on pattern blood sugars with sliding scale insulin
  • A patient has a history of hypercholesterolemia and is continued on their home Statin therapy.
  • Complications are those conditions that occur during the inpatient hospitalization. For example:
  • A patient undergoes hip surgery and experiences acute post-op blood loss anemia in the peri-operative period requiring serial Hemoglobin and Hematocrit checks and possibly blood transfusions.
  • A patient with a history of chronic obstructive pulmonary disease undergoes surgery and develops post-op respiratory failure.
  • Major Comorbidities and complications (MCCs): DRGs with MCCs reflect the highest level of severity. For example:
  • A patient with chronic systolic heart failure is admitted for a GI bleed, becomes volume overloaded and develops acute on chronic systolic heart failure during the admission.

As many times as we have heard it said it remains true, if you don’t document it then it wasn’t done or in the case of DRG assignment it wasn’t present and treated during the hospitalization. A Coder’s ability to code to the most appropriate DRG is dependent upon the Physician documentation in the medical record. Coding Guidelines do not allow coders to interpret lab findings, radiology findings, EKGs or pathology reports to assign diagnosis codes.

A successful DRG program in a hospital is dependent on the Physician providing a complete accounting of a patient’s Principal Diagnosis, comorbidities and complications, any procedures performed, the plan of care and the patient’s discharge status.


A patient presents with chest pain and has a known history of GERD. A Myocardial Infarction (MI) was ruled out based on EKG and Cardiac Enzymes and the patient was discharged home with a new prescription for Prilosec. In this case chest pain is a symptom code and a more specific diagnosis would be chest pain related to GERD. However, if the only diagnosis written by the Physician in the record is chest pain then the coder can only assign the code for unspecified chest pain.

This is why Coders and in more recent years Clinical Documentation Specialist send queries to Physicians. As far back as 2007, CMS has indicated that “we do not believe there is anything inappropriate, unethical or otherwise wrong with hospitals taking full advantage of coding opportunities to maximize Medicare payment that is supported by documentation in the medical record.” (Source: Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Rules and Regulations – page 47180)

Diagnosis-Related Group (DRG) is a diagnosis classification that groups patients that have a similar resource consumption and length-of-stay.

Relative Weight (RW) is a numeric weight assigned to each DRG that is indicative of the relative resource consumption associated with that DRG. For CMS fiscal year 2011 (October 1, 2010 through September 30, 2011) relative weights range from as high as DRG 001: Heart Transplant or Implant of Heart Assist System with MCC at 26.3441 to as low as DRG 795: Normal Newborn at 0.2284. Medical DRGs (e.g. chest pain, pneumonia, congestive heart failure) will have a lower relative weight than surgical DRGs.

Case Mix Index (CMI): The Ingenix 2011 DRG Expert defines CMI as “the sum of all DRG relative weights, divided by the number of Medicare cases. A low CMI may denote DRG assignments that do not adequately reflect the resources used to treat Medicare patients.”

An easier way to explain CMI is to compare it to a student’s Grade Point Average (GPA). A higher GPA is reflective of a student’s academic success. Likewise, a higher CMI for a hospital is reflective of a successful DRG program.

GPA Example:

(A=4 grade points / B=3 grade points / C=2 grade points / D = 1 grade point / F = 0 grade points)

Example Student Transcript


Credit Hours


Grade Points





Chemistry Lab




English 101








Sum of Credit Hours Attempted: 10

21 Total Grade Points


Formula for GPA: Total Grade Points ÷ Sum of Credit Hours = GPA

21 ÷ 10 = 2.10 GPA


Case Mix Index Example A:

DRGs Coded


DRG Description

Relative Weight


Simple Pneumonia & Pleurisy with MCC



Simple Pneumonia & Pleurisy with CC



Simple Pneumonia & Pleurisy without CC/MCC



Chest Pain


4 Total DRGs Coded

Sum of Relative Weights: 3.7543


Formula for Case Mix Index:

Sum of Relative Weights ÷ Total Number of DRGs Coded = Case Mix Index

Example A Case Mix Index: 3.7543 ÷ 4 = 0.9386 Case Mix Index


Example B: The Potential Impact Physician Queries can have on DRG Assignment:

DRGs Coded


DRG Pre-Query

Query Opportunity

DRG Post-Query

New Relative Weights



Query clarified that the patient had aspiration pneumonia





No Query Opportunity





Home medications included Lasix, Lisinopril and Digoxin. Query clarified that the patient had chronic systolic heart failure.





Cardiac cause of chest pain ruled out. Query clarified chest pain due to GERD




4 Total DRGs Coded

Sum of Relative Weights: 4.8144



  1. Example B Case Mix Index: 4.9944 ÷ 4 = 1.2036 Case Mix Index




The higher the case mix index, the more complex the patient population and the higher the required level of resources utilized. Since severity is such an essential component of MS-DRG assignment and case mix index calculation, documentation and code assignment to the highest degree of accuracy and specificity is of utmost importance.”

(Source: Ingenix 2011 DRG Expert)


Challenges for Hospitals:


Understanding what can make your hospitals CMI fluctuate?

  • A decrease in CMI may be reflective of:
  • Non-specific documentation by the Physician
  • Increase in Medical Volume with a decrease in Surgical Volume as Surgical DRGs have a higher Relative Weight.
  • Surgeons being on vacation
  • Physicians being unresponsive to Coder and Clinical Documentation Specialist queries
  • An increase in CMI may be reflective of:
  • Tracheostomy procedures that have an extremely high Relative Weight
  • Ventilator patients
  • Open Heart Procedures
  • Improved Physician Documentation
  • Improved Physician response rate to queries resulting in an improved CC / MCC capture rate

Realizing the Importance of every Medical Professional’s role in the success of a hospital’s DRG program:


  • The Physician’s Role: Is to provide complete and accurate documentation of a patient’s Principal Diagnosis, comorbidities and complications, any procedures performed, the plan of care and the patient’s discharge status in the medical record.


  • The Clinical Documentation Specialist’s Role: Is to perform concurrent medical record reviews and ask queries whether verbal or written when indicated.


  • The Coder’s Role: May be concurrent medical record review or a retrospective review after discharge; also ask queries when indicated.


The American Health Information Management Association (AHIMA) published a practice brief “Managing an Effective Query Process” in October 2008. The AHIMA brief states that “Providers should be queried whenever there is conflicting, ambiguous, or incomplete information in the health record regarding any significant reportable condition or procedure” or if “additional information is needed for correct assignment of the POA indicator.”


Further, AHIMA suggests querying when documentation in the patient’s record fails to meet one of the following five criteria:

  • Legibility
  • Completeness (e.g. abnormal test results without notation of clinical significance)
  • Clarity (e.g. diagnosis without statement of cause or suspected cause)
  • Consistency (e.g. conflicting documentation)
  • Precision (e.g. greater specificity)

The entire brief can be found at AHIMA's Managing an Effective Query Process.


So, how do you know if your patients are sicker?


Internally, hospitals can:

  • Work with their Decision Support staff to develop CMI reports by facility and by individual physicians.
  • Perform root-cause-analysis when you see fluctuations in the CMI rate.
  • Use CMI reports to compare Physicians in like specialties to each other.

External Resource for hospitals:

MMP, Inc’s sister company RealTime Medical Data (RTMD) affords hospitals the unique ability to finally compare their CMI rates to other hospitals within their defined market as well as statewide. RTMD uses real Medicare paid claims data and reports are based on the total market – all residents, all physicians, and all hospitals within Alabama, Mississippi, Tennessee, Georgia, Florida, Louisiana, Arkansas, Delaware, District of Columbia, Maryland, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina and Texas.


RTMD reports that can help a hospital and physician’s answer this question include:


A successful DRG program is dependent on accurate documentation. Addressing issues that can impact CMI will enable you to capture the most accurate severity of illness, have a positive impact on reimbursement and support the medical necessity of inpatient admissions.


Article Author: Beth Cobb, RN, BSN, ACM, CCDS
Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Analytics at Medical Management Plus, Inc. Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Protection Assessment Tool.

This material was compiled to share information.  MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.