Costs of DRG-Upcoding due to the introduction of the Diagnosis Related Groups in Germany

As part of the reform of the German health care system, the existing retrospective and procedural reimbursement system was replaced by a prospective and diagnostic system based on DRG. One objective was to reduce health care costs in the in-patient sector. However, the introduction of the DRG-based remuneration of the German health care system in 2004 has not controlled its rising expenditure. This increase has various causes with DRG-Upcoding forming a component thereof.

Until now, the upcoding expenditures in the German DRG-system have not been assessed. This presentation aims to give an overview of the excess of upcoding costs since the implementation of the DRG.

Literature on the extent of DRG-Upcoding was found by databank research. Calculations based on data regarding the US prospective payment system and data of the Federal Statistical Office of Germany regarding the costs of the in-patient sector.

The expected additional expenditure in the German healthcare system due to upcoding from 2004 to 2009 was around 1.9 to 3.24 billion €. The costs of defrauding coding practices were estimated to 288 million to one billion €.

An overview of upcoding expenditures can be drawn from these computations. To gain the exact upcoding costs in Germany, additional analysis of the CMI-components in the G-DRG-system are required.