Diagnosis related group coding accuracy of the peer review organizations.

Congress created the peer review organizations (PROs), in part, to check the accuracy of diagnosis related groups (DRGs) billed to Medicare. This study determined the accuracy of the peer review organizations' abstraction of DRGs during federal fiscal year 1985. A two-stage cluster design sampled 7050 medical records from 239 hospitals stratified by size. Credentialed medical record professionals used blinded techniques with reliability checks to abstract the ICD-9-CM codes and select the correct DRGs. Physicians reviewed medical records whose abstracted DRG differed from the DRG paid by the fiscal intermediary. The peer review organizations reported abstracting 1715 of these discharges. The peer review organization selected the correct DRG in 75.6 percent of the 1715 abstractions, a significantly lower proportion than the 80.3 percent paid accurately by the fiscal intermediaries. Upcoding compounded the peer review organizations' errors.