This document discusses various methods of exploratory data analysis that can be used to analyze healthcare data, including case mix analysis, case mix index calculation, CC/MCC capture rates, ambulatory patient classifications, and relative value unit analysis. Case mix analysis examines the average DRG weight and can be used to measure a hospital's resource intensity. The case mix index is a single number proxy for a hospital's case mix. CC/MCC capture rates indicate coding compliance when compared to national benchmarks. These techniques help improve operations and reimbursement for healthcare organizations.

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A Practical Approach to Analyzing
Healthcare Data
Chapter 8 – Exploratory Data
Applications

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Exploratory Data Analysis
• AKA Data Mining
• Using statistical techniques to find patterns in data
• Typically a mixture of graphical displays and
descriptive statistics
• Many practical applications in improving
healthcare operations
• HIM professionals are uniquely positioned to
perform this analysis because they understand the
data and the underlying operational and
reimbursement implications of patterns

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Case Mix Analysis
• Case Mix Index (CMI) – average MS-DRG weight for
all patients
– May be calculated for subsets of patients such as
Medicare/Medicaid/selected MS-DRGs
– May exclude portions such as transplants (very high
weight MS-DRGs) or transfers (reduced payment and
short stays)
– Single number that may be used as a proxy for measuring
the resource intensity of a hospital’s patients
– Medicare CMI is the primary driver of the inpatient
Medicare revenue
– Frequently a key performance indicator for a hospital and
a key driver of the revenue budget

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Case Mix Index
Example1. Multiply the number of cases in each MS-DRG by the relative
weight
2. Sum the values from #1
3. Sum the number of discharges
4. Divide total relative weights by the number of discharges
Note: This is the weighted average of the relative weights for each
MS-DRG.

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MS-DRG Families
• MS-DRGs may be broken into families with two or three
members:
– No CC
– CC (not present in all families)
– MCC
• The MS-DRG weight system is designed to assign higher
weights to MS-DRGs that require a higher resource
intensity
• MCC MS-DRGs are assigned higher weights than no CC
MS-DRGs in the same family
MS-
DRG MS-DRG Title Weights
190 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W MCC 1.1860
191 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W CC 0.9521
192 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O CC/MCC 0.7072
258 CARDIAC PACEMAKER DEVICE REPLACEMENT W MCC 2.6945
259 CARDIAC PACEMAKER DEVICE REPLACEMENT W/O MCC 1.8590
COPD
Pacemaker
Replacement

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CC/MCC Capture Rates
• Example:
• 𝐶𝐶 𝑀𝐶𝐶 𝐶𝑎𝑝𝑡𝑢𝑟𝑒 𝑅𝑎𝑡𝑒 =
87+51
87+51+33
= 80.7%
• This value can be compared to HCUP data using a z-test for
proportions to determine if the sample rate is higher/lower than
the national rate
• In general, hospitals with higher CC/MCC capture rates have
higher CMI
• A unusually high CC/MCC capture rate may be indicative of a
compliance issue (over-coding) and should also be investigated
MS-DRG Description Volume Relative Wt
280 AMI, Alive w MCC 87 1.7999
281 AMI, Alive w CC 51 1.0961
282 AMI, Alive w no CC/MCC 33 0.7736

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CMI Shifts
• Significant shifts in CMI should be investigated to
determine the root cause
• Potential causes:
– New service lines
– Surgeon vacation schedules
– Holidays
– Natural disasters (hurricanes, tornados, etc.)

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Present on Admission (POA)
indicator
If diagnosis that might be a hospital acquired
condition (HAC) was not present on admission,
claim is paid as if diagnosis was not on claim

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Other DRGs Systems
• AP-DRGs
– All-patient DRGs
– AKA “New York Grouper”
– Three character, numeric
– Weights are calibrated for all patients and not only
Medicare
• APR-DRGs
– All patient refined DRGs
– 3M proprietary grouping system
– 3 character, numeric followed by digit (1-4) for
severity and (1-4) for risk of mortality

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Ambulatory Patient Classifications
(APC)
• CMS uses APCs to pay for services in the hospital
outpatient and ambulatory surgery settings.
• Challenges of APCs
– Claim may have more than one payable APC
– Assignment of CPT/HCPCS codes to APCs may change
each year
– More of a fee schedule than a true prospective payment
system
• Can use APC weights to calculate a service mix index
(SMI)
– Note that this measures the average resource intensity for
the services provided and not for the typical case

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Other Analysis Tools/Reports
• Outpatient Code Editor (OCE)
– Used to find missed procedures
– Identify potential compliance issues (NCCI edit
violations)
• Examining levels of code subsets that are ordered
– Clinic visits (99201 to 99205)
– Emergency visits (99281 to 99285)

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Methods of Analysis
• Validation of utilization patterns
– Specialty specific codes
– Comparison to hospitals with like service mix
(trauma center, transplants, etc.)
• RVU Analysis
– Work RVUs may be used to benchmark
physician productivity
– Part of the CMS Physician Fee Schedule

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RVU – Physician Productivity

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RVU – Other Uses
• Average cost per RVU
• Physician compensation per work
RVU (wRVU)
• Malpractice expense per Malpractice
RVU (mRVU)
• Overhead or practice expense per
Practice Expense RVU (peRVU)
• Break-Even Conversion Factor
(BECF)