SECTION 2: MEASUREMENT Structure and Performance of Different DRG Classification Systems for Neonatal Medicine

There are a number of Diagnosis-Related Group (DRG) classification systems that have evolved over the past 2 decades, each with their own strengths and weaknesses. DRG systems are used for case-mix trending, utilization management and quality improvement, comparative reporting, prospective payment, and price negotiations. For any of these applications it is essential to know the accuracy with which the DRG system classifies patients, specifically for predicting resource use and also mortality. The objective of this study was to assess the adequacy of the three most commonly used DRG systems for neonatal patients—Medicare DRGs, All Patient DiagnosisRelated Groups (AP-DRGs), and All Patient Refined Diagnosis-Related Groups (APR-DRGs). A 2-part methodology is used to assess adequacy. The first part is a descriptive analysis that examines the structural characteristics of each system. This provides a framework for understanding the inherent strengths and weaknesses of each system and for interpreting their statistical performance. The second part examines the statistical performance of each system on a large nationally representative