Q&A: Interpreting case-mix index

November 2, 2020
Medicare Web

Q: How does case-mix index (CMI) impact hospital finances? What should revenue integrity staff look for when conducting CMI analyses?

A: Case-mix analysis should be conducted to determine changes in patient-volume data by DRGs and service-line comparisons to understand what services are driving the organization’s case-mix. Revenue integrity staff along with finance will monitor the CMI for emerging trends. CMI is the average (mean) relative weight (RW) and is defined as the sum of all Medicare discharged patients’ RWs of their final DRGs divided by the number of discharged Medicare cases. Particular attention should be given to a low CMI, as that may mean that MS-DRG assignments do not adequately reflect the resources used.

Revenue integrity and finance staff will evaluate and reconcile case-mix data from year to year and benchmark them against similar facilities, allowing the organization to evaluate trends and progress. The positives and/or negatives involved in the underlying cause affecting the changes in the case-mix must be identified. The rise and fall of the CMI can have a significant effect on the organization’s bottom line. For example, a high CMI means that the hospital is performing big-ticket services during a given time period and receiving more money per patient. Therefore, the hospital may experience a loss in revenue if the actual CMI is less than what the finance department predicted.

For more information, see the CHRI Exam Study Guide.