CCDS APR-DRG Methodology — Questions and Answers
Question 1: APR-DRGs differ most fundamentally from MS-DRGs in that APR-DRGs:
- Are administered exclusively by CMS for Medicare Fee-for-Service inpatients
- Assign independent Severity of Illness (SOI) and Risk of Mortality (ROM) subclasses in addition to the base DRG (Correct answer)
- Do not account for secondary diagnoses when grouping cases
- Apply only to pediatric and neonatal patient populations
Correct answer: Assign independent Severity of Illness (SOI) and Risk of Mortality (ROM) subclasses in addition to the base DRG
APR-DRGs (All Patient Refined DRGs), developed by 3M, layer two additional dimensions — Severity of Illness and Risk of Mortality — each rated on a 1–4 scale. This provides more granular clinical complexity measurement than MS-DRGs, which only differentiate by MCC/CC/no CC.
Question 2: In the APR-DRG system, what is the correct order of Severity of Illness subclasses from least to most severe?
- Major, Severe, Moderate, Minor
- Minor, Moderate, Major, Extreme (Correct answer)
- Low, Moderate, High, Critical
- Grade 1, Grade 2, Grade 3, Grade 4
Correct answer: Minor, Moderate, Major, Extreme
APR-DRG SOI subclasses are numbered 1–4 and labeled Minor, Moderate, Major, and Extreme. The same four-level scale applies to the Risk of Mortality subclass. These are the official 3M Health Information Systems designations used in the APR-DRG grouper.
Question 3: Which type of payer most commonly uses APR-DRGs as the basis for hospital reimbursement?
- Medicare Fee-for-Service exclusively
- Medicaid programs and commercial (non-Medicare) payers in many states (Correct answer)
- Workers' compensation programs only
- Critical Access Hospitals under cost-based reimbursement
Correct answer: Medicaid programs and commercial (non-Medicare) payers in many states
APR-DRGs were designed to cover all patient types — not just Medicare — and are widely adopted by state Medicaid programs and commercial insurers. Medicare FFS uses MS-DRGs; Critical Access Hospitals use cost-based reimbursement; workers' compensation uses fee schedules.
Question 4: From a CDI perspective, why does accurate secondary diagnosis documentation have an even greater impact in APR-DRGs than in MS-DRGs?
- MS-DRGs require more secondary diagnoses than APR-DRGs to assign correctly
- APR-DRGs use secondary diagnoses to assign SOI and ROM subclasses, which directly affect the payment weight for each case (Correct answer)
- Secondary diagnoses are not considered in either grouping system
- APR-DRGs rely only on procedure codes to assign severity
Correct answer: APR-DRGs use secondary diagnoses to assign SOI and ROM subclasses, which directly affect the payment weight for each case
In APR-DRGs, each secondary diagnosis is evaluated for its contribution to SOI and ROM subclass assignment. A single well-documented comorbidity can elevate a case from SOI 2 (Moderate) to SOI 3 (Major), substantially changing expected resource use and reimbursement — an effect more granular than MS-DRG's binary MCC/CC distinction.
Question 5: A hospital uses APR-DRG Risk of Mortality (ROM) subclasses primarily for which of the following purposes?
- Setting nurse-to-patient staffing ratios mandated by state law
- Benchmarking observed versus expected mortality rates for quality reporting and risk adjustment (Correct answer)
- Determining whether to admit a patient to the ICU
- Calculating the hospital's Medicare case-mix index
Correct answer: Benchmarking observed versus expected mortality rates for quality reporting and risk adjustment
The ROM subclass predicts the likelihood that a patient will die during the hospitalization. Hospitals use it to risk-adjust mortality statistics — comparing observed deaths to the number expected given the patient population's ROM distribution — which is central to quality benchmarking and public reporting.
Question 6: A CDI specialist at a hospital that contracts with a Medicaid managed care organization notices that a patient's chart lacks documentation of a significant comorbidity. In the APR-DRG context, failing to document this comorbidity most directly risks:
- Triggering a False Claims Act investigation for upcoding
- Lowering the SOI subclass assignment, reducing the expected resource weight and reimbursement (Correct answer)
- Causing the case to be grouped under a Medicare MS-DRG instead
- Increasing the patient's POA indicator burden
Correct answer: Lowering the SOI subclass assignment, reducing the expected resource weight and reimbursement
In APR-DRGs, undocumented comorbidities cannot be captured by the grouper, which may result in a lower SOI subclass (e.g., Moderate instead of Major). This understates clinical complexity, reduces the relative weight of the DRG, and results in underpayment — the opposite of upcoding concerns.
CCDS APR-DRG Methodology
APR-DRGs differ most fundamentally from MS-DRGs in that APR-DRGs: