Possible Influence of the Prospective Payment System on the Assignment of Discharge Diagnoses for Coronary Heart Disease

Abstract
The prospective payment system, under which diagnosis-related groups (DRGs) are used to reimburse hospitals for the care of Medicare patients, replaced the fee-for-service method of payment in Rhode Island in 1983 and in Massachusetts in 1985. Changes in financial incentives resulting from the use of the DRG system may have influenced the assignment of discharge diagnostic codes away from those with lower reimbursement toward codes with higher reimbursement.