Procedure codes: Potential modifiers of diagnosis-related groups

Proposals to make complexity-of-illness adjustments to the diagnosis-related group system have relied on secondary diagnosis codes and additional clinical information obtained from the hospital record. Another potential mechanism for modifying diagnosis-related groups involves the use of non-operating room procedure codes. The use of these codes has the advantage of reliably identifying costly subgroups of patients and thus the potential to provide for fairer compensation to hospitals caring for the sickest patients. There are a number of disadvantages, however, and therefore the criteria with which to evaluate procedures as potential modifiers are suggested.