3M™ All Patient Refined Diagnosis Related Groups (3M APR DRG)

3M APR DRGs are used by payers, hospitals and researchers. Payers often use 3M APR DRGs as the basis for an inpatient prospective payment method and as the risk adjustor in measuring hospital quality. Hospitals often use 3M APR DRGs in combination with 3M reimbursement calculation software to predict and verify expected reimbursement. Hospitals and researchers use 3M APR DRGs to understand utilization, measure quality and calculate efficiency measures such as risk-adjusted cost per stay.

Here are a few examples of how the 3M APR DRG patient classification methodology can bring value to health care organizations.

• Appropriate payment incentives. Implementing a 3M APR DRG payment method rewards efficiency, because payment does not depend on hospital-specific costs or charges. At the same time, a 3M APR DRG payment method creates incentives to increase access to care, because higher severity 3M APR DRGs receive higher payment rates.
• Predict and verify expected payment. 3M makes available reimbursement calculation software that enables providers to predict and verify expected payment using a specific payer’s 3M APR DRG pricing policy.
• Public reporting. Because 3M APR DRGs define “the product of a hospital,” they are useful in public reporting and other comparisons across hospitals and states. New York state, for example, uses 3M APR DRGs to report average charges and costs for every hospital in the state.
• Quality comparisons. 3M APR DRGs have been used in multiple analyses as the risk adjustor to make fair comparisons across hospitals on quality measures such as mortality, potentially preventable complications and potentially preventable readmissions.
• Clinical insight. Hospitals, state agencies, payers and researchers use 3M APR DRGs to yield insights about clinical care. For example, analysis in multiple states has quantified the sharp inverse relationship between birth weight and the hospital’s cost of neonatal care.
• Financial analysis. Hospitals, state agencies, payers and researchers use 3M APR DRGs to risk adjust measures such as charges, hospital cost and average length of stay to create fair comparisons of utilization and efficiency across service lines, hospitals and other populations.
• Defining episodes. The event of an inpatient stay is used in the 3M™ Patient-focused Episodes (PFE) Software to define an episode of care that includes the inpatient stay, the associated hospital and professional services, and related post-discharge services (such as rehabilitation).

3M APR DRG grouping logic is the same for every payer, although different payers choose different configuration options and may follow different update schedules. Each payer that uses 3M APR DRGs makes its own decisions about prices and payment policies. For hospitals, other providers, health plans and other organizations that seek to understand, predict and verify expected payment, 3M makes available software that emulates payer-specific grouping, pricing and payment policy. As of 2021, this payment prediction software is available for approximately 30 payers nationwide.

3M also makes available reimbursement calculation software for national payers that do not use 3M APR DRGs, including Medicare DRGs and TRICARE DRGs.

3M APR DRGs are integrated with other 3M patient classification methodologies.

3M has aligned the service line definitions between 3M APR DRGs for inpatient care and the 3M™ Enhanced Ambulatory Patient Groups (EAPGs) for outpatient care. This alignment allows analysis of charges, cost, payment and utilization by service line across both inpatient and outpatient settings.

3M APR DRGs are used to risk adjust the 3M™ Potentially Preventable Complications (PPCs) and 3M™ Potentially Preventable Readmission (PPR) methodologies. 3M PPCs measure the incidence of a wide range of inpatient complications while 3M PPRs are a well-accepted measure of the quality of both inpatient care and post-discharge follow-up in the community.

3M APR DRGs are used to define 3M™ Potentially Preventable Admissions, which are a measure of population health.

3M APR DRGs are used to define certain 3M PFEs. For example, 3M APR DRG 301-1 Hip Joint Replacement triggers Patient-focused Episode 3011 Hip Replacement Procedure.

3M APR DRGs are available in the following 3M products:

• 3M™ 360 Encompass™ System
• 3M™ Coding and Reimbursement System
• 3M™ Advanced CDI Transformation Program
• 3M™ Clinical Documentation Improvement (CDI) System
• 3M™ Reimbursement Calculation Software
• 3M™ Core Grouping Software (CGS)
• 3M™ Grouper Plus Content Services (GPCS)
• 3M™ Data to Action Solution
• 3M™ APR DRG mainframe version

Licensees of the 3M APR DRG methodology have access to the following documents on the 3M Customer Support website:

• 3M™ APR DRG Methodology Overview
• 3M™ APR DRG Summary of Changes
• 3M™ APR DRG Definitions Manual
• 3M™ APR DRG Software Installation and User’s Guide
• 3M™ APR DRG Weights and Trims with Code Descriptions

3M experts are available to advise provider organizations, health plans, government agencies and other interested parties on how to obtain maximum value from using the 3M APR DRGs. For example, 3M consultants can help hospitals implement clinical documentation integrity (CDI) programs and use 3M APR DRGs to measure and improve their own cost efficiency and quality of care. 3M consultants can also help payers design payment methods based on 3M APR DRGs and demonstrate how to use 3M APR DRGs to understand patterns of utilization, charges, cost and payment.

The unit of analysis is an inpatient stay at an acute care hospital. All the data required to assign a 3M APR DRG can be obtained from a standard inpatient hospital discharge record, such as the UB-04 form or the X12N 837I electronic transaction. Data fields that are particularly important for 3M APR DRG assignment include all diagnosis codes, present on admission indicators, ICD-10-PCS procedure codes and procedure code date.

3M APR DRGs were first released in 1991. The 3M APR DRG logic uses claims data to assign patients to one of 332 base 3M APR DRGs that are determined either by the principal diagnosis or, for surgical patients, the most important surgical procedure. Each base 3M APR DRG is then divided into four severity of illness (SOI) levels, determined primarily by secondary diagnoses that reflect both comorbid conditions and the severity of the underlying illness, creating the final set of 1,330 3M APR DRGs. The 3M APR DRG logic computes both an admission severity of illness and a discharge severity. The present-on-admission (POA) indicator for each secondary diagnosis is a required data field for computing the severity of illness at the time of admission.

For example, 3M APR DRG 139-1 is Other Pneumonia, severity of illness 1 (minor) while 3M APR DRG 139-4 is Other Pneumonia, severity of illness 4 (extreme). Each base DRG also has four risk-of-mortality levels. Although severity of illness is often correlated with risk of mortality, the two concepts are different and it is possible for a patient to have a high severity of illness but a low risk of mortality. Acute cholecystitis is an example.

The clinical logic is maintained by a team of 3M clinicians, data analysts, programmers and economists. The logic is proprietary to 3M but is available for licensees to view in an online definitions manual.

Each year 3M calculates and releases a set of statistics for each 3M APR DRG based on our analysis of large national data sets. These statistics include a relative weight for each 3M APR DRG. The relative weight reflects the average hospital resource use for a patient in that 3M APR DRG relative to the average hospital resource use of all inpatients. Please note that payers and other users of the 3M APR DRG methodology are responsible for ensuring that they use relative weights that are appropriate for their particular populations. The 3M APR DRG statistics also include data for each 3M APR DRG on relative frequency, average length of stay, average charges and incidence of mortality.

3M APR DRGs can be rolled up into broader categories. The 332 base DRGs roll up into 25 major diagnostic categories (MDCs) plus a pre-MDC category. An example is MDC 04, Diseases and Disorders of the Respiratory System. As well, each 3M APR DRG is assigned to a service line that is consistent with the outpatient service lines that are defined by the 3M™ Enhanced Ambulatory Patient Groups (EAPGs). An example is service line 01.7, General Medicine – Pulmonary.

3M releases a new version of the 3M APR DRGs every October 1, to reflect updates in the ICD-10 diagnosis and procedure code sets and to include enhancements to the clinical classification logic.