How will Medicare data affect your next survey?

Find out how you compare to other organizations

Since surveyors from the Joint Commission on Accreditation of Healthcare Organizations will come to your organization armed with detailed information on how you compare to other facilities, why not be proactive and do your own comparative analysis?

This is a smart move, since it sheds light on how your organization measures up before your survey, according to Patti Muller Smith, RN, EdD, a consultant for Shawnee, OK-based Administrative Consulting Services. Smith works with hospitals on performance improvement and regulatory compliance.

Data from the Centers for Medicare and Medicaid Services’ Medicare Provider Analysis and Review (Medpar) database will be one of the elements used by the Joint Commission to determine your priority focus areas and clinical service groups, says Carrie Gross, manager of the Joint Commission’s division of accreditation systems integration.

The Medpar data will be risk adjusted by Salt Lake City-based 3M Health Information Systems, the Joint Commission’s vendor, according to Gross. "The risk-adjustment process considers a patient’s age, comorbidities, and illness severity level," she explains.

Different adjustment factors are used to create the expected rate of performance, including the underlying case mix and illness severity levels derived from regrouping the cases with 3M’s All Payer Refined Diagnosis Related Grouper (APR DRG).

According to Gross, the following data elements will be reviewed: volume, length of stay, mortality rate, complication rate, case mix index, full-time employee over adjusted occupied bed, and Medicare utilization rate.

Medpar data files provide information for 100% of Medicare beneficiaries using hospital inpatient services as well as covered services in other settings, Smith notes. The data are provided by state and then by DRG and include total charges, covered charges, Medicare reimbursement, total days, number of discharges, and average total days.

One of your biggest challenges as a quality manager is to provide information that directs a specific course of action, Smith says. She points to the Joint Commission’s performance improvement standards requiring that a valid outside data source be used, in addition to your organization’s internal data-gathering systems.

That gives you the opportunity to compare the internally generated data with data from other organizations and evaluate the effectiveness and efficiency of your organization as it provides health care to your service population, Smith says. "Rather then just generating and reporting data, the Joint Commission is moving toward developing information on which decisions can be made," she says.

Priority focus areas are processes, systems, and structures in your health care organization that significantly affect the quality and safety of care, Smith explains. In light of this, you should be concerned with three key questions, she says: Is the care provided appropriate? Is the care provided effective? Is the care provided efficient?

Medpar is one data source that can answer these questions by painting a picture of what goes on in your organization, Smith says.

"It serves to demonstrate how you measure up in comparison to other like organizations," she explains. "This comparison helps quality managers target areas for further assessment and possible improvement."

Analyzing Medpar data can help you focus performance improvement activities toward the processes, systems, and structures that would cause delays in discharge or higher-than-expected costs, Smith says. "More than anything, it encourages the quality manager to ask why?’"

To do your own comparative analysis before a survey, first collect data from internal sources regarding average charges and average cost. Then compare this to the Medpar data, Smith advises. "If there is a discrepancy or significant difference in the numbers, the quality manager begins to ask questions," she says. "What is it that we, as an organization, do that is different from these other organizations that creates this difference?"

For example, if the covered charges are far less than your billed charges, you’ll need to determine if the current practice in your hospital is to order unnecessary tests for a given diagnosis. Or it may be that patients have a longer length of stay because laboratory data are not made available in a timely manner to initiate treatment, or there may be an unreasonable lag time between ordering diagnostic tests or medications and when the order is acted upon, Smith says.

To take into account the unique patient population your organization serves, it is beneficial to identify your top DRGs and then compare Medpar data to your internal data, she recommends.

"These data should be readily available from cost accounting and medical records," she says. "You may have to hunt for the data, but once it is located, it allows the quality manager to provide information rather than numbers."

In essence, your comparison will raise questions, and further investigation will provide more information on which decisions can be made, Smith explains. Performance improvement is intended to be a continuous process that provides ongoing improvement in services to patients, she stresses.

"It is not just a matter of collecting data in books, reporting the numbers at meetings, and having documentation to show surveyors," she says. "It is intended to examine current practices and processes to see if they can be done in a different, more effective manner."

"It helps determine that the organization is providing the right amount of care in the right setting for a reasonable cost and still achieving safe, quality health care," Smith notes.

For instance, effective discharge planning can reduce potentially avoidable days spent in the acute care setting, she suggests. Chart reviews examining this process can identify valuable information to give clues as to why the length of stay for a particular DRG is greater than expected.

"Is discharge planning initiated during the admission process, or is it crisis managed when the physician writes the order?" Smith asks. "If the order is written on a Friday, is there something that prevents the patient from being discharged late on Friday and results in a two-day longer stay?"

If costs for a particular DRG are higher than expected, drilling down in the Medpar data will give insight on where ancillary services have higher-than-expected costs associated with caring for patients with this diagnosis, Smith notes.

"Reviewing the charts of patients assigned to this DRG can help identify why costs in your hospital are higher than expected," she says.

"The next step is for a performance improvement team to conduct further investigation and identify areas for improvement," Smith adds.

[For more information on Medpar data and Joint Commission surveys, contact:

  • Carrie Gross, Manager, Accreditation Systems Integration, Joint Commission on Accreditation of Healthcare Organizations, One Renaissance Blvd., Oakbrook Terrace, IL 60181. Phone: (630) 792-5000. E-mail:
  • Patti Muller Smith, RN, EdD, Administrative Consulting Services, P.O. Box 3368, Shawnee, OK 74802. Phone: (405) 878-0118. E-mail:]