Medical reimbursement in the UAE: What to expect from ... Weber - IR...What to expect from International Refined DRGs ... • Overview of the experience of the Emirate of ... in the

Medical reimbursement in the UAE:What to expect from InternationalRefined DRGs

©2017 AHIMA’s Intellectual Property. All rights reserved.

Medical reimbursement in the UAE:What to expect from InternationalRefined DRGs

Scott Weber, EdD, MS, RHIA, RN, FACHE, FHIMSSHigher Colleges of TechnologyAbu Dhabi Women’s CollegeAbu Dhabi, United Arab Emirates

Abstract, Section 1 of 4

• Many hail the DRG system a success withevidence to suggest it has lowered costs andaverage length of hospital visits. One study intothe impact of DRGs by Europe’s Institute forPublic Health concluded: ‘The advantages of theDRG payment system are reflected in theincreased efficiency and transparency andreduced average length of stay.’ However, thatsame study noted that they can also provide anincentive towards earlier patient discharges fromhospital which could potentially be at odds withthe ‘clinical benefit priorities’.


• Many hail the DRG system a success withevidence to suggest it has lowered costs andaverage length of hospital visits. One study intothe impact of DRGs by Europe’s Institute forPublic Health concluded: ‘The advantages of theDRG payment system are reflected in theincreased efficiency and transparency andreduced average length of stay.’ However, thatsame study noted that they can also provide anincentive towards earlier patient discharges fromhospital which could potentially be at odds withthe ‘clinical benefit priorities’.


• Either way, such programs can take a longperiod of time to put in place. These criticismsand others like them are now becoming of greatinterest to those in the healthcare industry inDubai, in the United Arab Emirates, following theDecember 2016 announcement by the DubaiHealth Authority (DHA) that the InternationalRefined Diagnosis-Related Group (IR DRG) isset to be implemented in the emirate with thegoal to ‘improve transparency and quality ofhealthcare services’.


• Either way, such programs can take a longperiod of time to put in place. These criticismsand others like them are now becoming of greatinterest to those in the healthcare industry inDubai, in the United Arab Emirates, following theDecember 2016 announcement by the DubaiHealth Authority (DHA) that the InternationalRefined Diagnosis-Related Group (IR DRG) isset to be implemented in the emirate with thegoal to ‘improve transparency and quality ofhealthcare services’.


• But as we know, DRGs do not eradicate medicalfraud entirely. Miscoding is common – whetherintentional or not – and widely considered to beharder to spot than straight up over-billing. Then,from the insurer’s point of view, there is theissue of DRG up-coding – coding errors thatresult in a patient interaction being erroneouslyplaced into a DRG with a higher reimbursement(whether intentionally or not).


• But as we know, DRGs do not eradicate medicalfraud entirely. Miscoding is common – whetherintentional or not – and widely considered to beharder to spot than straight up over-billing. Then,from the insurer’s point of view, there is theissue of DRG up-coding – coding errors thatresult in a patient interaction being erroneouslyplaced into a DRG with a higher reimbursement(whether intentionally or not).


• As the coding of DRGs is a manual processwhereby a coder converts the patient’s medicalchart into a series of diagnosis and procedurecodes, it becomes open to both human error andintentional manipulation. Perhaps the biggestconcern in insurance circles, however, is howunprepared the current infrastructure is for the newsystem. In many ways, the UAE is in an enviableposition – having been able to watch and learn fromthe issues faced by other countries whenintroducing DRGs. The big challenge now is to makesure we avoid those pitfalls.


• As the coding of DRGs is a manual processwhereby a coder converts the patient’s medicalchart into a series of diagnosis and procedurecodes, it becomes open to both human error andintentional manipulation. Perhaps the biggestconcern in insurance circles, however, is howunprepared the current infrastructure is for the newsystem. In many ways, the UAE is in an enviableposition – having been able to watch and learn fromthe issues faced by other countries whenintroducing DRGs. The big challenge now is to makesure we avoid those pitfalls.

Objectives

• Define International Refined DRG and how theycompare with regular DRGs.

• Describe the implications of introducing IR DRGs onthe healthcare industry in the region.

• Describe the impact that DRGs have had onhealthcare financing in Abu Dhabi since theirintroduction there in 2010.

• Assess the likely impacts of IR DRGs on healthcarefinancing in Dubai during their implementationperiod from 2017 through 2020.

• Assess potential resulting changes to practice formedical coders and HIM staff.


• Define International Refined DRG and how theycompare with regular DRGs.

• Describe the implications of introducing IR DRGs onthe healthcare industry in the region.

• Describe the impact that DRGs have had onhealthcare financing in Abu Dhabi since theirintroduction there in 2010.

• Assess the likely impacts of IR DRGs on healthcarefinancing in Dubai during their implementationperiod from 2017 through 2020.

• Assess potential resulting changes to practice formedical coders and HIM staff.

Session Outline

• The impact of Diagnosis Related Groups(DRGs) on global healthcare finance

• Various versions of diagnosis related groupsystems and how they differ and are used

• Criticisms of DRG systems and theirimplementation

• Overview of the experience of the Emirate ofAbu Dhabi with its own version of DRGs sinceimplementation in 2010


• The impact of Diagnosis Related Groups(DRGs) on global healthcare finance

• Various versions of diagnosis related groupsystems and how they differ and are used

• Criticisms of DRG systems and theirimplementation

• Overview of the experience of the Emirate ofAbu Dhabi with its own version of DRGs sinceimplementation in 2010

Session Outline, continued

• Reasons why Dubai Emirate is nowimplementing International Refined DRG system

• Review of structure and organization of IR DRGsand experiences and applications of countriesthat are using it; Case examples of how IR-DRGs are unique

• What to expect from the implementation of IR-DRGs in the Emirate of Dubai

• How prepared is the Dubai healthcarecommunity for IR-DRGs and what will need to bedone to make for a smoother implementation?


• Reasons why Dubai Emirate is nowimplementing International Refined DRG system

• Review of structure and organization of IR DRGsand experiences and applications of countriesthat are using it; Case examples of how IR-DRGs are unique

• What to expect from the implementation of IR-DRGs in the Emirate of Dubai

• How prepared is the Dubai healthcarecommunity for IR-DRGs and what will need to bedone to make for a smoother implementation?

Overview

• The impact of Diagnosis Related Groups(DRGs) has long been debated in many parts ofthe world. And that debate is now well underwayin the United Arab Emirates.

• First used in the 1980s in the US, it was not untila decade later that other countries started totake notice. Today, DRGs are an integral part ofmany of the world’s major healthcare systems.They landed in Abu Dhabi in 2010, with a roll-outplanned for Dubai starting this year.


• The impact of Diagnosis Related Groups(DRGs) has long been debated in many parts ofthe world. And that debate is now well underwayin the United Arab Emirates.

• First used in the 1980s in the US, it was not untila decade later that other countries started totake notice. Today, DRGs are an integral part ofmany of the world’s major healthcare systems.They landed in Abu Dhabi in 2010, with a roll-outplanned for Dubai starting this year.

Overview

• DRGs come in many forms, but they are essentiallypayment categories used to classify patients, andthen reimburse hospitals according to a fixed fee,regardless of the actual costs.

• So DRGs effectively bundle inpatient hospitalservices into a single group for each inpatient stay.

• Treatment providers are then paid a set amount forthe treatment of the patient – based largely on theaverage cost of treating patients with the same orsimilar ailments – rather than claiming for the actualcost of treatment for each individual case.


• DRGs come in many forms, but they are essentiallypayment categories used to classify patients, andthen reimburse hospitals according to a fixed fee,regardless of the actual costs.

• So DRGs effectively bundle inpatient hospitalservices into a single group for each inpatient stay.

• Treatment providers are then paid a set amount forthe treatment of the patient – based largely on theaverage cost of treating patients with the same orsimilar ailments – rather than claiming for the actualcost of treatment for each individual case.

Overview

• The brainchild of Yale University economists, theprimary intention of DRGs was to reign in medicalcosts and to incentivize hospitals to only treat – andsubsequently claim for – medically-necessary care.

• Many hail the system a success with evidence tosuggest it has lowered costs and average length ofhospital visits.

• One study into the impact of DRGs by the Institutefor Public Health (in Serbia) concluded: ‘Theadvantages of the DRG payment system arereflected in the increased efficiency andtransparency and reduced average length of stay.’


• The brainchild of Yale University economists, theprimary intention of DRGs was to reign in medicalcosts and to incentivize hospitals to only treat – andsubsequently claim for – medically-necessary care.

• Many hail the system a success with evidence tosuggest it has lowered costs and average length ofhospital visits.

• One study into the impact of DRGs by the Institutefor Public Health (in Serbia) concluded: ‘Theadvantages of the DRG payment system arereflected in the increased efficiency andtransparency and reduced average length of stay.’

Overview

• However, as with any major development in themedical world, DRGs are not without critics.

• That same study noted that they can alsoprovide an incentive towards earlier patientdischarges from hospital which could potentiallybe at odds with the ‘clinical benefit priorities’.

• Either way, such programs can take a longperiod of time to put in place.


• However, as with any major development in themedical world, DRGs are not without critics.

• That same study noted that they can alsoprovide an incentive towards earlier patientdischarges from hospital which could potentiallybe at odds with the ‘clinical benefit priorities’.

• Either way, such programs can take a longperiod of time to put in place.

Overview

• These criticisms and others like them are nowbecoming of great interest to those in the healthcareindustry in Dubai following the December 2016announcement by the Dubai Health Authority (DHA)that the International Refined Diagnosis-RelatedGroup (IR DRG) is set to be implemented in theemirate with the goal to ‘improve transparency andquality of healthcare services’.

• So what exactly is an IR DRG? And what does thismean for the healthcare industry in the Gulf region?


• These criticisms and others like them are nowbecoming of great interest to those in the healthcareindustry in Dubai following the December 2016announcement by the Dubai Health Authority (DHA)that the International Refined Diagnosis-RelatedGroup (IR DRG) is set to be implemented in theemirate with the goal to ‘improve transparency andquality of healthcare services’.

• So what exactly is an IR DRG? And what does thismean for the healthcare industry in the Gulf region?

DRG coding in the UAE: What can we expect?

• Essentially, an IR DRG differs from other DRGsin a number of ways:

• They are designed to encompass both inpatientand outpatient care, but can be used forinpatient care only;

• They are based mainly on procedure codesrather than on diagnosis codes; and,

• They include three levels of severity of illnessusing the most severe secondary diagnosis onthe claim.


• Essentially, an IR DRG differs from other DRGsin a number of ways:

• They are designed to encompass both inpatientand outpatient care, but can be used forinpatient care only;

• They are based mainly on procedure codesrather than on diagnosis codes; and,

• They include three levels of severity of illnessusing the most severe secondary diagnosis onthe claim.


• IR DRGs, of the type that Dubai is soon set tointroduce, are split into three categories:

• Minor – such as uncomplicated diabetes,difficulty breathing and hypertrophy of kidney;

• Moderate – such as diabetes with renalcomplications, emphysema and chronic renalfailure; and,

• Major – including diabetes with ketoacidosis,respiratory failure and acute renal failure.


• IR DRGs, of the type that Dubai is soon set tointroduce, are split into three categories:

• Minor – such as uncomplicated diabetes,difficulty breathing and hypertrophy of kidney;

• Moderate – such as diabetes with renalcomplications, emphysema and chronic renalfailure; and,

• Major – including diabetes with ketoacidosis,respiratory failure and acute renal failure.


• To decide what types of conditions would fit intoeach category, thousands upon thousands ofpast claims were analyzed, and once grouped, adollar amount was assigned to each.

• While many studies into DRGs highlight itsimpact on efficiency from a treatment point ofview, the impact on insurers – those footing thebill – is much less discussed.


• To decide what types of conditions would fit intoeach category, thousands upon thousands ofpast claims were analyzed, and once grouped, adollar amount was assigned to each.

• While many studies into DRGs highlight itsimpact on efficiency from a treatment point ofview, the impact on insurers – those footing thebill – is much less discussed.


• The DRG system is far from a perfect science. DRGcategories are decided upon based on averages –how often the hospital deals with that type ofcondition, how much it usually costs and so on.

• Back in Dubai that poses a particular problem asmedical coding misrepresentation is rife.

• Therefore, the data used by the Dubai HealthAuthority (DHA) to decide DRGs will not be scientificenough to reach base prices for each procedure,which can have huge financial consequences forinsurers.


• The DRG system is far from a perfect science. DRGcategories are decided upon based on averages –how often the hospital deals with that type ofcondition, how much it usually costs and so on.

• Back in Dubai that poses a particular problem asmedical coding misrepresentation is rife.

• Therefore, the data used by the Dubai HealthAuthority (DHA) to decide DRGs will not be scientificenough to reach base prices for each procedure,which can have huge financial consequences forinsurers.


• This is just one of the reasons why the roll-out ofDRGs in Dubai is considered by many to berather premature.

• As the DHA says itself – ‘a DRG system cruciallydepends upon accurate coding of inpatienthospital stays, so hospital coding needs to befirst reviewed and upgraded if needed’.

• This is yet to happen.


• This is just one of the reasons why the roll-out ofDRGs in Dubai is considered by many to berather premature.

• As the DHA says itself – ‘a DRG system cruciallydepends upon accurate coding of inpatienthospital stays, so hospital coding needs to befirst reviewed and upgraded if needed’.

• This is yet to happen.


• Then there is the cost of new technology toconsider.

• Because IR DRG is a 3M product, it requires allproviders to install and integrate their systemsaccordingly – the cost of which falls only on theprovider.

• Inflation and revision is another concern for insurers.• The DHA calculates a 3% annual increase with a

revision price based on this.• However, the vast majority of insurers have

contractual periods ranging between one and threeyears without a default clause for revision.


• Then there is the cost of new technology toconsider.

• Because IR DRG is a 3M product, it requires allproviders to install and integrate their systemsaccordingly – the cost of which falls only on theprovider.

• Inflation and revision is another concern for insurers.• The DHA calculates a 3% annual increase with a

revision price based on this.• However, the vast majority of insurers have

contractual periods ranging between one and threeyears without a default clause for revision.


• Finally, it hasn’t been taken into account that manyproviders are not yet up to speed with other recentsystems such as e-prescription – rolled out twoyears ago and still not implemented across theboard smoothly.

• The addition of another new system this year willonly make matters worse.

• However, there is a silver lining.• IR DRG is a phased process starting in 2017 that

will take up to three years, giving providers time toadapt to the changes.

• Whether this will be long enough remains to beseen.


• Finally, it hasn’t been taken into account that manyproviders are not yet up to speed with other recentsystems such as e-prescription – rolled out twoyears ago and still not implemented across theboard smoothly.

• The addition of another new system this year willonly make matters worse.

• However, there is a silver lining.• IR DRG is a phased process starting in 2017 that

will take up to three years, giving providers time toadapt to the changes.

• Whether this will be long enough remains to beseen.

DRGs: Making it work

• DRGs incentivize hospitals to only treatnecessary ailments rather than racking up alitany of chargeable tests and treatments.

• Under a DRG system, hospitals can createexcess revenues by treating patients moreefficiently and economically, or they can absorbmonetary losses by doing otherwise.




• Under a DRG system, hospitals can createexcess revenues by treating patients moreefficiently and economically, or they can absorbmonetary losses by doing otherwise.



• But as we know, DRGs do not eradicate medical fraudentirely.

• Miscoding is common – whether intentional or not – andwidely considered to be harder to spot than straight upover-billing.

• Then, from the insurer’s point of view, there is the issueof DRG up-coding – coding errors that result in a patientinteraction being erroneously placed into a DRG with ahigher reimbursement (whether intentionally or not).

• As the coding of DRGs is a manual process whereby acoder converts the patient’s medical chart into a series ofdiagnosis and procedure codes, it becomes open to bothhuman error and intentional manipulation.


• But as we know, DRGs do not eradicate medical fraudentirely.

• Miscoding is common – whether intentional or not – andwidely considered to be harder to spot than straight upover-billing.

• Then, from the insurer’s point of view, there is the issueof DRG up-coding – coding errors that result in a patientinteraction being erroneously placed into a DRG with ahigher reimbursement (whether intentionally or not).

• As the coding of DRGs is a manual process whereby acoder converts the patient’s medical chart into a series ofdiagnosis and procedure codes, it becomes open to bothhuman error and intentional manipulation.


• Perhaps the biggest concern in insurancecircles, however, is how unprepared the currentinfrastructure is for the new system.

• So healthcare providers and insurers must nowroll with the punches and ensure they get up tospeed fast with the new system to ensure itsimplementation throughout Dubai runs assmoothly as possible.


• Perhaps the biggest concern in insurancecircles, however, is how unprepared the currentinfrastructure is for the new system.

• So healthcare providers and insurers must nowroll with the punches and ensure they get up tospeed fast with the new system to ensure itsimplementation throughout Dubai runs assmoothly as possible.


• A 2016 World Health Organization (WHO) reportends its study with a balanced assessment ofthe situation: ‘Ultimately, the introduction of aDRG-based system is part of a long path ofcontinuous development and adjustment ofprovider payments.

• It might involve combining different providerpayment mechanisms to arrive at the optimalmix of incentives, as has been done in manyadvanced health financing systems.’











• In many ways, the UAE is in an enviable position– having been able to watch and learn from theissues faced by other countries whenintroducing DRGs.

• The big challenge now is to make sure we avoidthose pitfalls.

• Thank you!

• Any questions?


• In many ways, the UAE is in an enviable position– having been able to watch and learn from theissues faced by other countries whenintroducing DRGs.

• The big challenge now is to make sure we avoidthose pitfalls.

• Thank you!

• Any questions?

References

• Averill, R. Muldoon, J. & Vertrees, J. (2008). TheEvolution of Case Mix Measurement Using DiagnosisRelated Groups (DRGs) in Goldfield, N. PhysicianProfiling and Risk Adjustment, Aspen 2nd edition.

• Averill, R.F., Goldfield, N.I., Muldoon, J., Steinbeck, B.A.,& Grant, T.M. (2012). A closer look at all patient refinedDRGs. Journal of AHIMA. Jan;73(1):46-50.

• Muldoon, J.H. (2016). Structure and performance ofdifferent DRG classification systems for neonatalmedicine. Pediatrics. Jan;103(1 Suppl E):302-18

• Romano, P.S., & Chan, B.K. (2017). Risk-adjusting acutemyocardial infarction mortality: are APRDRGs the righttool? Health Services Research, Mar; 34(7):1469-89.

• Goldfield, N., & Averill, R. (2016). On "risk-adjustingacute myocardial infarction mortality: are APR-DRGs theright tool"? Health Services Research, Mar;34(7):1491-5.


• Averill, R. Muldoon, J. & Vertrees, J. (2008). TheEvolution of Case Mix Measurement Using DiagnosisRelated Groups (DRGs) in Goldfield, N. PhysicianProfiling and Risk Adjustment, Aspen 2nd edition.

• Averill, R.F., Goldfield, N.I., Muldoon, J., Steinbeck, B.A.,& Grant, T.M. (2012). A closer look at all patient refinedDRGs. Journal of AHIMA. Jan;73(1):46-50.

• Muldoon, J.H. (2016). Structure and performance ofdifferent DRG classification systems for neonatalmedicine. Pediatrics. Jan;103(1 Suppl E):302-18

• Romano, P.S., & Chan, B.K. (2017). Risk-adjusting acutemyocardial infarction mortality: are APRDRGs the righttool? Health Services Research, Mar; 34(7):1469-89.

• Goldfield, N., & Averill, R. (2016). On "risk-adjustingacute myocardial infarction mortality: are APR-DRGs theright tool"? Health Services Research, Mar;34(7):1491-5.

References

• Averill, R.F. (2014). The evolution of case-mixmeasurement using DRGs: past, present and future.Studies in Health Technology Informatics; 14:75-83.

• Goldfield, N. (2014). Case Mix and OutcomesManagement, Journal of Outcomes Management, 1(2).

• Goldfield, N. (2016). Severity of Illness, Case Mix andManaged Care, Journal of Outcomes Management.

• Goldfield, N. (2014). Understanding Your Managed CarePractice: The Critical Role of Case Mix Systems. InNash, D. (ed) Managed Care, Aspen.

• Muldoon, J. (1996). Pediatrics and DRG Case MixClassification. Physician Profiling and Risk Adjustment,Edition 1. Goldfield N, M.D., Boland P, Ph.D. 252-270.


• Averill, R.F. (2014). The evolution of case-mixmeasurement using DRGs: past, present and future.Studies in Health Technology Informatics; 14:75-83.

• Goldfield, N. (2014). Case Mix and OutcomesManagement, Journal of Outcomes Management, 1(2).

• Goldfield, N. (2016). Severity of Illness, Case Mix andManaged Care, Journal of Outcomes Management.

• Goldfield, N. (2014). Understanding Your Managed CarePractice: The Critical Role of Case Mix Systems. InNash, D. (ed) Managed Care, Aspen.

• Muldoon, J. (1996). Pediatrics and DRG Case MixClassification. Physician Profiling and Risk Adjustment,Edition 1. Goldfield N, M.D., Boland P, Ph.D. 252-270.

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Documents

Medical reimbursement in the UAE: What to expect from ... Weber - IR...What to expect from International Refined DRGs ... • Overview of the experience of the Emirate of ... in the