A hospital with a higher Case Mix Index (CMI) will generally experience DRG reimbursements that are:

• A. Decreased due to complexity
• B. Higher due to complexity
• C. Unchanged regardless of case mix
• D. Variable only with volume

Answer: (B)

A higher Case Mix Index signals that the hospital is treating more complex, resource-intensive cases. In the DRG payment system, each discharge is assigned a DRG weight that reflects the expected cost of that case. Payments are calculated as a base rate multiplied by the DRG weight, with some adjustments. The hospital’s CMI is the average of those DRG weights across all discharges. When CMI rises, the average DRG weight is higher, so the average payment per discharge increases. Therefore, DRG reimbursements tend to be higher with a higher CMI. Volume can affect total revenue, but the increase in reimbursements comes from the higher case weights associated with greater complexity, not from volume alone.