Retrospective analysis of Healthcare Resource Group coding allocation for local anaesthetic video-assisted 'medical' thoracoscopy in a UK tertiary respiratory centre

Abstract

Background: Correct service costing is essential but may not always be done accurately. Aim: To assess the accuracy of Healthcare Resource Group (HRG) coding allocation for patients undergoing local anaesthetic video-assisted thoracoscopy (LAVAT) against predicted codes under Payment by Results (PbR). Design: Single centre retrospective study. Tertiary respiratory centre in Leicestershire. Methods: One hundred twenty-five patients undergoing LAVAT from July 2005 to July 2008. Main outcome measures: Predicted and actual revenue per LAVAT episode based on predicted and actual HRG codes allocated. Results: Among 125 patients undergoing LAVAT, the actual HRG code matched the predicted code in only 39 cases (31.2%), odds ratio (OR) 0.002, 95% confidence intervals (CIs) 0.0001-0.03, P < 0.0001. In 51 cases (40.8%), this resulted in a median (interquartile range) excess of PbR revenue of £574 (574-1366) per episode; a total estimated overspend of £29 274. In 35 cases (28.0%), this resulted in a median underspend of -£1093 (-1285 to -851) per episode; a total estimated underspend of £38 529, with a total estimated financial error of £67 529. The net median (interquartile range) difference for PbR-related revenue was £0 (-89 to + 574). Factors associated with coding discrepancy were longer length of stay (OR = 2.52, 95% CIs = 1.09-5.81, P = 0.03) and talc pleurodesis (OR = 2.25, 95= CI = 1.01-4.99, P = 0.06). Conclusions: HRG coding allocation errors occur frequently. The potential financial implications of this are significant for providers and commissioners. Future strategies are required at multiple levels (NHS Trust, Primary Care Trust and Department of Health) to minimize future discrepancies and financial error. © The Author 2009. Published by Oxford University Press on behalf of the Association of Physicians. All rights reserved.