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The basic principle of the IPPS payment system is that the ‘levels’ (no CC/CC/MC

ID: 3340653 • Letter: T

Question

The basic principle of the IPPS payment system is that the ‘levels’ (no CC/CC/MCC) of a MS-DRG family has different resource intensity and therefore should be paid differently. Use the CHF data to test this hypothesis. Use charge as a measure of resource intensity. Be sure to state the null and alternative hypotheses and set the alpha prior to performing the test.

Can you conclude which MS-DRGs have significantly different average charges?

drgcode TotChg 291 35529 291 17742 293 13801 293 22829 293 32060 292 23832 292 36438 292 25732 292 20221 291 14581 292 23253 291 88808 293 28532 291 28950 292 79101 292 18286 291 63175 292 19651 291 23472 292 26800 293 22316 293 10183 292 11577 291 56042 292 34977 292 17915 292 38346 291 24430 292 20915 292 8797 293 22233 292 15657 291 53870 293 24333 293 22980 292 9711 292 44929 291 15208 292 28646 291 20134 293 33039 292 21687 292 22420 291 33153 292 27710 291 23928 291 28748 291 131686 291 12482 291 60180 293 25922 292 18209 291 25176 292 9225 291 64168 291 90725 293 16811 292 31073 291 42129 292 45304 293 12438 292 15602 292 25997 293 15288 291 17781 291 63204 293 21207 292 46736 291 73609 292 23519 292 18933 292 26339 292 28649 291 31108 291 20907 293 35255 292 10914 291 71142 292 38089 292 25336 293 6085 291 70048 292 18174 292 56850 292 16395 293 17077 291 20648 293 24843 292 10018 292 19637 293 15039 293 12008 293 43885 293 15205 293 19432 292 24539 292 35472 292 24516 292 9846 293 18336 292 44324 292 24535 291 102111 293 14033 291 38354 291 14917 292 47733 291 30440 292 40504 291 56257 292 62293 292 24030 291 25722 292 34629 293 25673 292 34258 292 8438 292 39438 291 15923 292 21589 291 13441 292 23378 291 29035 292 21240 292 15701 291 47682 291 39062 292 19412 292 164904 291 19703 292 37693 293 12872 292 12543 291 71078 291 26698 291 54325 292 23591 291 27103 291 33435 291 54436 291 70672 291 30996 293 16825 291 27776 293 26138 291 98993 291 39160 292 29010 293 18565 291 69929 291 39166 293 16361 291 106356 292 29394 291 29086 291 23683 291 156238 292 21041 291 24637 291 44681 292 15418 292 18295 292 28976 291 21426 291 18041 291 66007 292 38497 293 35842 291 71247 292 8845 291 30819 292 24696 292 24778 293 15092 293 31139 292 43675 291 220386 291 16197 293 26719 291 98549 291 69937 291 120238 292 100218 292 13254 292 28776 292 20993 291 39557 292 18866 291 174182 291 39436 291 32084 291 29976 292 20227 291 72098 291 55763 291 23347 292 15202 291 35325 291 45452 291 32392 292 23542 293 32722 292 14583 291 18794 291 15004 291 57453 291 32569 292 98486 293 22226 291 52443 291 130415 291 58586 292 44401 291 10367 293 38028 291 33332 291 36968 293 30655 292 14413 292 21088 291 25864 293 25687 291 42702 293 25213 292 16032 292 63407 291 24831 291 12803 293 15388 292 38046 291 24249 292 29207 291 66705 291 26725 292 22087 291 95341 292 16425 293 16744 292 19618 292 72700 293 43325 291 27331 291 22748 292 46960 292 18873 292 73823 291 48317 293 12207 291 30343 293 46655 291 30897 293 12216 293 51618 291 9883 292 57580 292 30329 293 74537 292 38058 291 29681 293 47786 292 37183 291 15899 292 81572 292 41475 291 18473 292 15747 291 48949 292 38760 292 40008 292 34595 293 15575 293 38731 293 22748 291 37045 291 46376 293 26963 291 40766 292 36254 291 18186 291 39812 292 40458 292 45172 292 25335 292 27815 291 74297 291 19034 291 9358 291 22314 293 7000 291 45120 292 27053 292 20764 291 9722 291 33890 291 45579 291 15201 293 17863 291 15464 291 24410 292 45895 291 19740 291 42445 293 14349 292 39468 292 89164 293 12733 293 26992 293 29854 292 12973 293 19665 291 56028 293 21695 291 127306 293 28599 293 28627 291 39903 292 8745 291 35352 291 15818 292 18326 292 24820 293 23617 293 20716 292 54434 293 18767 291 36344 293 34838 291 48732 291 66805 291 79513 291 128841 292 13269 292 15547 293 15374 292 20266 293 21397 291 207256 291 22634 292 31629 291 24338 291 79855 291 102395 292 21793 292 7182 291 43929 292 12551 291 36265 292 41930 291 25363 292 38976 293 25440 291 453273 291 77096 293 26764 291 21519 292 43263 291 29923 291 21974 293 20018 293 18212 293 13095 293 17534 291 22251 291 32358 292 19668 293 21831 292 32805 292 48207 292 22320 291 88250 292 31266 291 43526 291 10588 291 30272 293 27367 292 39738 292 27039 291 183990 291 14979 291 70379 291 24766 292 44204 293 13509 291 51845 291 20289 291 52470 292 24732 293 9294 291 37072 292 58785

Explanation / Answer

Null Hypothesis: There is no significant different in the average charges of MS-DRGs.

Vs

Alternative Hypothesis: There is a significant different in the average charges of MS-DRGs.

## By Using ANOVA in Minitab  

One-way ANOVA: TotChg versus drgcode

Source DF SS MS F P
drgcode 2 44984357928 22492178964 18.97 0.000
Error 387 4.58762E+11 1185430718
Total 389 5.03746E+11

S = 34430 R-Sq = 8.93% R-Sq(adj) = 8.46%


Individual 95% CIs For Mean Based on
Pooled StDev
Level N Mean StDev ----+---------+---------+---------+-----
291 165 49492 48575 (----*-----)
292 144 31370 20810 (----*-----)
293 81 23513 11108 (-------*------)
----+---------+---------+---------+-----
20000 30000 40000 50000

Here the Pvalue=0.000 indicates the rejection of the null hypothesis at 5% level of significance.

Hence MS-DRGs have significantly different average charges.

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