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Introduction to APR-DRGs

APR-DRG Overview
The All Patient Refined Diagnosis Related Groups (APR-DRGs) expand the basic DRG1 structure by adding four
subclasses to each DRG. The addition of the four subclasses addresses patient differences relating to severity of
illness (SOI) and risk of mortality (ROM). SOI is defined as the extent of physiologic decomposition or organ
system loss of function. ROM is defined as the likelihood of dying. Severity of illness and risk of mortality relate
to distinct patient attributes.
For example, a patient with acute cholelithiasis (acute gallstone attack) may be considered a major severity of
illness but only a minor risk of mortality. The severity of illness in this example is important since there is
significant organ system dysfunction associated with acute cholelithiasis. However, it is unlikely that the acute
episode alone will result in patient death and thus, the risk of mortality for this patient is minor. If additional,
more serious diagnoses are also present, patient severity of illness and risk of mortality may increase. For
instance, if peritonitis is present along with the acute cholelithiasis, the patient may be considered an extreme
severity of illness and a major risk of mortality.
Since severity of illness and risk of mortality are distinct patient attributes, separate subclasses are assigned to
each patient. Thus, in the APR-DRG system a patient is assigned three distinct descriptors:

The base APR-DRG (e.g., APR-DRG 194 Heart Failure)

The severity of illness subclass
The risk of mortality subclass

The four severity of illness subclasses and the four risk of mortality subclasses are numbered sequentially from
one to four indicating respectively, minor, moderate, major, or extreme. For applications such as evaluating
resource use or establishing patient care guidelines, the APR-DRG in conjunction with severity of illness subclass
is used. For evaluating patient mortality the APR-DRG in conjunction with the risk of mortality subclass is used.
Although the subclasses are numbered one to four, the numeric values represent categories and not scores. For
example, severity subclass four congestive heart failure patients are not comparable to severity subclass 4 patients
with a fractured leg. Therefore, it is not meaningful to average the numeric values of the severity of illness or risk
of mortality subclasses across a group of patients to compute an average severity score. However, the APR-DRG
severity and risk of mortality subclasses can be used to compute an expected value for a measure of interest (e.g.,
length of stay, cost, and mortality), using statistical techniques.
The underlying clinical principle of APR-DRGs is that the severity of illness or risk of mortality of a patient is
highly dependent on the patients underlying problem and that patients with high severity of illness or risk of
mortality are usually characterized by multiple serious diseases or illnesses. In APR-DRGs, the assessment of the
severity of illness or risk of mortality of a patient is specific to the base APR-DRG to which a patient is assigned,
making the determination of the severity of illness and risk of mortality disease-specific. The significance
attributed to complicating or co-morbid conditions is dependent on the underlying problem. For example, certain
types of infections are considered a more significant problem in a patient who is immunosuppressed than in a
patient with a fractured arm. In APR-DRGs, high severity of illness or risk of mortality are primarily determined
by the interaction of multiple diseases. Patients with multiple co-morbid conditions involving multiple organ
systems represent difficult-to-treat patients who tend to have poor outcomes. An in-depth description of the
clinical logic of the APR-DRGs and the severity of illness and risk of mortality subclass is available.

Diagnosis Related Group is a system to classify hospital cases where they are expected to have similar hospital resource use, developed
for Medicare as part of the prospective payment system

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Introduction to APR-DRGs

APR-DRG Developers
APR-DRGs are a joint development of 3M Health Information Systems (3M HIS) and the National Association of
Childrens Hospitals and Related Institutions (NACHRI). APR-DRGs are a proprietary product of 3M HIS.
NACHRI is responsible for the pediatric portion of APR-DRGs. The pediatric portion of any severity of illness
system is critical if non-Medicare data is included in the provider comparisons. APR-DRGs have the most
comprehensive and complete pediatric logic of any severity of illness system.
Process for Developing APR-DRGs
An iterative process of formulating clinical hypotheses and then testing the hypotheses with historical data was
used to develop APR-DRGs. Separate clinical models are developed for each of the 314 reasons for admission, in
which the risk factors that impact the severity of illness and risk of mortality are identified. In the APR-DRG
methodology the 314 different reasons for admissions are referred to as base APR-DRGs. In addition to the 314
base APR-DRGs there are two error APR-DRGs that do not have severity or risk of mortality subclasses. In
summary, there are a total of 1,258 APR-DRG and severity combinations in the payment methodology.
Once the clinical model for severity of illness and risk of mortality is developed for each base APR-DRG, it is
evaluated with historical data. Patients with a high severity of illness are, in general, expected to incur greater
costs and patients with a higher risk of mortality are expected to die more frequently. Historical data is used to
review clinical hypotheses. If there were discrepancies between clinical expectations and the data results, the
clinical expectations were always used as the basis of the APR-DRGs. An expert panel of clinicians from various
specialties reviews all logic for clinical accuracy. Customer feedback and the result of constant clinician review
and validation are also incorporated into the process. Thus, the APR-DRGs are a clinical model that has been
extensively reviewed with historical data.
APR-DRG Data Requirements
In order to ensure wide applicability with minimal burden on providers, the data elements used to determine
patient risk factors used by the APR-DRGs are limited to standard UB-04 data elements. Specifically, the data
elements used by the APR-DRGs are:

Principal diagnosis coded in ICD-9-CM

Principal procedure coded in ICD-9-CM
Secondary diagnoses coded in ICD-9-CM
Secondary procedures coded in ICD-9-CM
Age
Sex
Birth weight (value or ICD-9-CM code)
Discharge date
Status of discharge
Days on mechanical ventilator (value or ICD-9-CM code)

These data elements are combined on a patient-specific basis to determine patient SOI and ROM. Thus, APRDRGs do not require hospitals to do any dual coding. APR-DRGs are assigned using the same ICD-9-CM
diagnosis and procedure codes used to assign the CMS DRGs.
External Validation and Use of APR-DRGs
APR-DRGs make clinical sense. The clinical logic of APR-DRGs has undergone the most intensive scrutiny of
any severity system on the market. APR-DRG risk adjustment methodology is the most widely used by state data
commissions and health departments. Almost every state that has adopted APR-DRGs as a risk adjustment
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methodology has done extensive evaluation of alternate systems and then selected APR-DRGs as their risk
adjustment methodology. One organization that performed external validations was the Agency for Health Care
Research and Quality (AHRQ). AHRQ has developed a comprehensive set of quality indicators referred to as the
Hospital Cost and Utilization Project (HCUP) Quality Indicators. The HCUP Quality Indicators were developed
for AHRQ by the UCSF Stanford Evidence-based Practice Center and utilized APR-DRGs for risk adjustment.
The evidence from the literature and information collected in the interviews with
potential HCUP users were used to identify a practical method for risk adjustment of
HCUP indicators Where feasible, the APR-DRG system was used to determine the effect
of risk adjustment on the measured performance of providers on each review indicator.
AHRQ Publication No. 01-0035 May 2001
APR-DRGs are widely used by health services researchers, including extensive use by the Medicare Payment
Advisory Commission (MedPAC).
While there are many severity of illness systems on the market, very few of them have ever been used as the basis
for public dissemination of comparative provider information. With the extensive use of APR-DRGs by state and
federal agencies, APR-DRGs are by far the most widely used system to adjust for severity of illness and risk of
mortality in publicly disseminated comparative provider profiles.
Performance of APR-DRGs Compared to CMS DRGs
Early patient classification systems, such as the Medicare DRGs and All Patient (AP) DRGs, were developed to
relate the types of patients treated to the resources they consume. Thus, these systems focus exclusively on
resource intensity. Some drawbacks of these systems include:

Medicare DRGs were designed for the Medicare population only.

Neither are severity adjusted; this can provide incentive for providers to cherry-pick healthier patients while
encouraging higher risk, more complex patients to seek care elsewhere.

Higher complexity DRGs are formed based on resource intensity and do not address severity of illness or risk
of mortality.

The Federal Register notes that:

our primary focus in maintaining the CMS DRGs is to serve the Medicare population. We do not have the data
or the expertise to maintain the DRGs in clinical areas that are not relevant to the Medicare population.
Federal Register, April 13, 2007
we do not have the expertise or data to maintain the CMS DRGs for newborns, pediatric, and maternity
patients.
Federal Register, April 13, 2007
This shows that CMS-DRGs are insufficient for populations other than Medicare.
APR-DRGs and Quality of Care
APR-DRGs are also being used to:

Assess the quality of care provided to patients,

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Develop payment systems that promote improved physician performance through behavior change, and
Form the basis of payment systems that link payment to performance (e.g., quality of care provided).

APR-DRGs are the foundation for potentially preventable inpatient readmissions and complications. The severity
adjustment feature of APR-DRGs enables payers and providers to evaluate performance under these metrics on a
risk-adjusted basis. While APR-DRGs provide a valuable risk of mortality measure, this measure is not used to
assign an APR-DRG for payment. Only severity of illness is actually used in assigning an APR-DRG for
payment.
APR-DRG Updates and ICD-10-CM
In addition to the original December 1990 release of the APR-DRGs, there have been several major clinical
updates. The version number used to describe the APR-DRGs corresponds to the version of ICD-9-CM in which
the APR-DRGs are written. In addition, the APR-DRGs are updated each October to incorporate all ICD-9-CM
code modifications. Major clinical updates are planned every three to five years.
By October 2013, the U.S. will implement the ICD-10-CM diagnosis and ICD-10-PCS procedure coding systems.
This will require a complete rewrite of any case mix system. Through its international work, 3M HIS has
extensive experience converting DRG systems to ICD-10 diagnosis codes. 3M HIS will incorporate the ICD-10
update to its APR-DRGs.

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