The DRG-Based Hospital Prospective Payment System in Greece: An Assessment of the Reimbursement Rates Using Clinical Severity Classification

Introduction: Diagnosis Related Groups (DRGs) are used throughout the health care industry to address issues of cost, effectiveness and quality of care. Nonetheless, many have argued that the DRGs do not adequately adjust for patient severity and this prospective payment system leads to reimbursement inequities. Objective: The purpose of this study is first, to explore the relationship between KEN-DRGs reimbursement rates (along with other controls) and clinical severity classification and second, to draw hospital reimbursement policy implications. Methods: The present study is a retrospective observational study, undertaken in a very large number of hospitalization cases and conducted exclusively by examining reimbursement administrative data collected from the e-DAPY database of National Organization for Provision of Healthcare Services (EOPYY) in Greece. The database provided contained all impatient hospitalizations classified for every single KEN-DRG code and for every MDC (aggregated) for the time period January to June 2013 (first semester of 2013). Results: Our results demonstrate that though there is a strong association between reimbursement rates and clinical severity, there are several KEN-DRG codes that are over-(under-) reimbursed, taking in consideration their clinical severity class. Conclusion: Because DRGs systems are crucial in measuring relative efficiency among hospitals, as well as driving ongoing reimbursement, they should incorporate and establish the severity level for every admission, so as to determine whether case mix growth is associated with real costs or with coding and documentation improvements at the hospital.