Physician DRGs

Abstract

DRG-based reimbursement for inpatient services is an option currently being considered by federal policy makers, but little is known about how physician DRGs might work. We performed simulations of potential impacts, using Medicare claims from four states. Although physician-related inpatient costs associated with surgical DRGs were quite homogeneous, those associated with medical admissions varied dramatically. This suggests that DRG payment could be a lottery, with inequitable losses for some physicians and windfall gains for others. Potential gains and losses were also found to be systematically related to the specialty of the attending physician. General practitioners and ophthalmologists would gain financially on average, whereas medical specialists and some surgical specialists would incur net losses. These differences may be due to the triaging of more seriously ill patients within a given DRG to certain specialists.