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Case Mix Index Pain Points

Published on 

Tuesday, April 11, 2017

“The difference between the almost right word and the right word is really a large matter --- it’s the difference between the lightning bug and lightning.”- Mark Twain: Letter to George Bainton, October 15, 1888

In MMP’s article Case Mix Index: Beyond the Physician's Pen, our readers were introduced to the concepts of Medicare Severity Diagnosis-Related Groups (MS-DRGs), how an MS-DRG is assigned, Principal and Secondary diagnoses, Relative Weight (RW), and Case Mix Index (CMI). CMS defines CMI as a representation of the average diagnosis-related group (DRG) relative weight for that hospital. It is calculated by summing the DRG weights for all Medicare discharges and dividing by the number of discharges. CMIs are calculated using both transfer-adjusted cases and unadjusted cases.

We also likened the way a CMI is calculated to calculating a student’s Grade Point Average (GPA).

Formula for CMI: Sum of RWs ÷ Total Number of MS-DRGs = CMI
Formula for GPA: Sum of Grade Points ÷ Sum of Credit Hours = GPA

A higher CMI reflects a more complex patient population that required higher resource utilization. A higher GPA reflects a higher level of academic achievement by the student which required a higher focus on academic studies resulting in the student having a more complex understanding of the subject matter.

CMI Pain Points for Hospitals

This article focuses on CMI pain points for hospitals including understanding that a successful MS-DRG Program is a collaborative process, there are several reasons that a CMI can fluctuate, and that slight shifts in CMI can have a significant impact on your hospital finances.

Pain Point: Understanding that a successful MS-DRG Program is a Collaborative Process

For a hospital to be successful in obtaining the CMI that truly reflects their patient population is a collaborative effort between the Physician, Clinical Documentation Improvement Specialists and Professional Coders. Here are the specific roles each team member must fill to truly tell the patient’s story.

  • The Physician’s Role: Tell the Patient’s Story by providing 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: Interpret the documentation by performing concurrent medical record reviews and ask for clarity and/or accuracy of the clinical picture.  
  • The Coder’s Role: May be concurrent medical record review or a retrospective review after discharge; also to ask queries when indicated. Ultimately, it is the Coding Professional’s role to translate documentation into codes for MS-DRG assignment.

Before moving on to the next Pain Point, it is important to note that CMS supports this collaborative process. In fact in the 2008 IPPS Final Rule CMS noted that they 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. We encourage hospitals to engage in complete and accurate coding.”

AHIMA’s 2016 Practice Brief, Guidelines for Achieving a Compliant Query Practice, also supports the query process. Specifically, they note that a Physician Query is “a communication tool used to clarify documentation in the health record for accurate code assignment. The desired outcome from a query is an update of a health record to better reflect a practitioner’s intent and clinical though processes, documented in a manner that supports accurate code assignment.”

Pain Point: Recognizing Factors Leading to CMI Fluctuations

As a Clinical Documentation Specialist in the hospital, I can remember monthly operational review meetings where inevitably the Chief Financial Officer (CFO) wanted an explanation for the shift (positive or negative) in CMI and placed this responsibility solely on the Clinical Documentation Improvement Team. Quite a few years have passed since then and I am hopeful that this is no longer the case at your hospital. However, if it is, share this article with your CFO to help him/her understand that shifts in CMI can happen that are beyond a Coder or Clinical Documentation Specialists control.

A decrease in CMI may be reflective of:

  • Non-specific Physician documentation,
  • Increase in Medical Volume with a decrease in Surgical Volume as Surgical MS-DRGs in general are more resource intensive and will have a higher RW,
  • Surgeons being on vacation;
  • Inpatient admissions that could have been treated as an Outpatient, or
  • Physicians being unresponsive to Coder and Clinical Documentation Specialists queries.
  • Note, queries are asked to clarify documentation, not to question a physician’s clinical judgment.

An increase in CMI may be reflective of:

  • Increase in surgical volume,
  • Tracheostomy procedures that have an extremely high RW,
  • Ventilator patients, or
  • Improved physician response to queries resulting in improved documentation depicting the patient’s story.

Pain Point: Recognizing that Small Variances in CMI can Significantly Impact a Hospitals Finances

CMI shifts of even 0.1000 can have a significant impact on your hospital finances. To illustrate, the following table takes a look at the “We Care for You Hospital” which saw a decrease in their CMI of 0.1000 from FY 2015 to FY 2016.

Table 1: CMI Analysis Example for "We Care for You Hospital"
Fiscal Year CMI Compare
CMI FY 2015 = 1.6581
CMI FY 2016 = 1.5581
CMI Difference
We Care for You Hospital Blended Rate
We Care For You Hospital Medicare Fee-for-Service Patient Volume
(CMI Difference) X (Hospital Blended Rate) = Reduced Reimbursement Per Discharge
(0.10) X ($4,800) = $480
(Reduced Reimbursement per Discharge) X (Patient volume) = Overall Reduced Reimbursement
($480 x 6,000) = $2,880,000

The above example is just that, an example. In reality, surgeons go on vacation, surgical and medical volumes change, MS-DRGs are reassigned a new RW on an annual basis that may be higher or lower than the prior fiscal year, improved physician documentation can have a positive impact on your secondary diagnoses capture rate, and ICD-10 happened.

To validate there is more to CMI than meets the eye, I turned to our sister company RealTime Medicare Data (RTMD) to analyze Medicare Fee-for-service paid claims data. Specifically, I compared the Fiscal Year prior to ICD-10 implementation to the first full Fiscal Year after the October 1, 2015 ICD-10 implementation date. The following two tables contrasts the Top 10 MS-DRGs by RW, CMI, number of discharges and actual payment for the state of Alabama.

Table 2: Top 10 MS-DRGs CMI, Patient Volume & Actual Payment Compare Pre & Post ICD-10 Implementation for Alabama
Top Ten DRGs for Alabama Pre and Post ICD-10 Implementation
CMS FY 2015: October 1, 2014 - September 30, 2015
MS-DRGMS-DRG DescriptionRWDischargesActual Payment
470Major Joint Replacement or Reattachment of Lower Extremity without MCC2.11379,429$97,838,163
871Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours with MCC1.80727,919$77,285,924
945Rehabilitation with CC/MCC1.27097,667$134,061,072
392Esophagitis, Gastroenteritis & Misc. Digestive Disorders without MCC0.73885,232$18,449,360
291Heart Failure & Shock with MCC1.50974,653$36,172,481
292Heart Failure & Shock with CC0.98244,480$22,192,336
194Simple Pneumonia and Pleurisy with CC0.96884,284$20,242,718
690Kidney & Urinary Tract Infections without MCC0.77944,056$15,160,065
190Chronic Obstructive Pulmonary Disease with MCC1.17433,958$22,892,783
Total Discharges:59,111 
Total Actual Payment:$497,099,528
CMS FY 2016: October 1, 2015 - September 30, 2016
MS-DRGMS-DRG DescriptionRWDischargesActual Payment
470Major Joint Replacement or Reattachment of Lower Extremity without MCC2.08169,640$97,794,442
871Septicemia or Severe Sepsis without Mechanical Ventilation >96 Hours with MCC1.79268,570$81,083,420
392Esophagitis, Gastroenteritis & Misc. Digestive Disorders without MCC0.74004,818$16,733,572
291Heart Failure & Shock with MCC1.48094,483$34,468,950
292Heart Failure & Shock with CC0.97074,258$21,533,494
57Degenerative Nervous System Disorders without MCC1.07164,085$55,527,236
690Kidney & Urinary Tract Infections without MCC0.78283,916$14,720,416
190Chronic Obstructive Pulmonary Disease with MCC1.15783,669$21,954,728
194Simple Pneumonia & Pleurisy with CC0.96953,488$16,391,259
Total Discharges:53,084 
Total Actual Payment:$404,121,561

At the end of the day, accurate documentation captures the clinical severity of the patient that in turn can:

  • Increase patient safety,
  • Increase the accuracy of Quality measures,
  • Decrease the risk of medical necessity denials,
  • Result in more accurate Readmission and Mortality rates for your hospital,
  • Impact physician and hospital profiles; and
  • Support that your patients have received the right care, at the right time, at the right cost and in the right setting.



Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / Rules and Regulations / page 47180 at

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.