Frequency and Cost of Diagnosis-Related Group Outliers Among Newborns

Abstract

Analysis of outliers, as defined by the Health Core Financing Administration, among 47,776 newborns discharged from 33 short-term hospitals in Maryland in 1981 shows that the three prematurity diagnosis-related groups (DRGs) (386 to 388) represented only 5.3% of all discharges of newborns, but more than one fifth of all outliers and more than three fifths of outlier days of care for newborns. The disparity in charges for outliers and inliers (not exceeding the "trim point") is even more dramatic. Newborns with "extreme immaturity" (DRG 386) and "prematurity with major problems" (DRG 387) together accounted for less than 3% of all newborn discharges but for nearly one fourth of all outlier discharges. The mean length of stay in hospitals for outliers in those two DRGs was more than 2 months. The mean charge per outlier discharge in DRG 386 was $27,061 in 1981. Nearly one third of the discharges and more than two thirds of the days of care in this DRG were for outliers. Outliers occurred up to five times more often among premature neonates than among normal newborns and occurred preponderantly in teaching hospitals, especially those with more than 400 beds. This finding may require a reevaluation of the outlier trim points and the reimbursement method for newborn DRGs to assure adequate payment to the providers of neonatal intensive care, mainly large teaching hospitals.