How does undercoding affect a hospital's MS-DRG case mix?

Undercoding affects a hospital's MS-DRG case mix by making it lower than warranted by the actual service intensity. When a hospital undercodes, it reports a lower severity of illness than what the patient actually experienced or the complexity of the services provided. This misrepresentation leads to a case mix index that does not accurately reflect the resources used and the intensity of care provided. As a result, the hospital may receive lower reimbursement rates than it should, which can impact its financial performance.

A more accurate MS-DRG system relies on proper coding to ensure that the complexity of cases is recognized; undercoding undermines this by suggesting that the cases treated are less intensive than they truly are. This highlights the importance of accurate coding in reflecting the actual services and resources utilized in patient care, which is essential for ensuring appropriate reimbursement and resource allocation in the healthcare setting.