Application of medical classifications in reimbursement systems

A complete system of health insurance should cover the following areas:

  • physical (somatic) and psychiatric diseases
  • Pregnancy and obstetrics
  • Accident injuries
  • occupational illnesses (work accidents, occupational diseases)
  • Rehabilitation after illnesses or accidents
  • Need of care and attention
  • Prevention and health education
  • Life insurance

Insurance companies which want to offer services in these areas need information about the risk to be insured in order to be able to calculate the tariffs with mathematical methods (risk of morbidity). On the other hand it is very important to apply clear and comprehensible methods to refund costs to health care organisations by the insurance companies. Controlling instruments are required to recognize changes of the morbidity as well as the frequency and manner of demands of health care services like medical treatments, examinations, prescriptions and operations. This is necessary in order to realize the general expansion of costs early and to be able to take up countermeasures.

Information about diagnoses and treatment of the insured have a decisive meaning for the business management of insurance companies. For statistical questions these information must be prepared so that they can be analysed with data processing systems. These requests can only be solved using classification systems for diagnoses and procedures.

Medical documentation in Germany

Since 1985 standardised health care statistics were introduced in Germany by law. We started with the ICD-9 and changed to ICD-10 in 2000. The encoding and statistics of operations using ICPM / OPS started in 1995. After admission of a patient to hospital the doctors have to report the ICD-10 code of the working diagnosis and the probable duration of treatment to the cost bearer in order to obtain a declaration of defrayal. After discharge from hospital the final diagnosis, secondary diagnoses and all procedures carried out have to be reported in terms of ICD-10 and OPS (procedure) codes. A so called "grouper" software generates a certain DRG (diagnosis related group) and a fixed price will be paid by the insurance company to the hospital.

Additionally the hospitals have to carry out standardized statistics of all main diagnoses and treatments in terms of ICD-10 and OPS, grouped by age and sex. These statistics are used to compare different hospitals in order to assess the performance and the costs of the health care institutions. Also it is possible to analyse trends in the incidence of diseases and manner of treatment. These information play an important role for the planning of health care services and help to control the costs. But we may not forgot that these statistics do not say anything about the quality of treatment and late results. To run a successful health care system it is imperative to install efficient instruments for quality control of medical diagnostics and treatment. The encoded data from diagnoses and procedures make it easier and even make it possible to evaluate the quality and results of treatment. Quality control programmes are running in Germany for obstetrics, heart surgery and some more special diagnoses.

Health care Reimbursement in Germany

In 2003 the German G-DRG system was introduced for all hospitals. It is an adoption of the Australian DRG-system and consists now on 1200 diagnoses and procedure related groups. Complications and co-morbidity are considered. All DRG groups are defined by means of ICD-10 and OPS. Even co-morbidity and complications have to be encoded using ICD-10 in order to upgrade to a better paid DRG. The doctors in Germany have to learn that the correct encoding and especially complete documentation of all diagnoses, secondary diagnoses and co-morbidity, complications and procedures decides whether a hospital is successful not only in the field of medicine but also economically. We are convinced that this system will help to guarantee balanced prices for medical services. It should help to reduce costs and to avoid diagnostics and treatment procedures not necessary from the medical point of view.

The use of EDP-Systems in medical documentation and reimbursement

Medical documentation and case based reimbursement systems require EDP-systems and appropriate computer programmes. A central database and a high performance archive system are required for the storage and retrieval of all patient records. The process of encoding diagnoses and procedures has to be integrated into the workflow of computer based medical documentation. The use of computer based encoding systems is recommended.

All information necessary for reimbursement should be derived from the standard patient record. This saves time and guarantees consistent and reliable data for medical purposes as well as reimbursement. To enable the insurance companies to check the billings hospitals in Germany have to report all diagnoses and procedures of the patient in terms of ICD-10 and OPS codes. It is necessary to install a quality control system to check the medical documentation and encoding processes in the hospitals. There remains a risk for intentional wrong encoding in order to charge more money. If there is any suspicion insurance companies are allowed in Germany to check the original patient data and compare with the billing. Manipulation and fraud will be penalized.