Medicaid prospective payment: Case-mix increase

S. L. Baker, J. J. Kronenfeld

Research output: Contribution to journalReview articlepeer-review

3 Scopus citations


South Carolina Medicaid implemented prospective payment by diagnosis-related group (DRG) for inpatient care. The rate of complications among newborns and deliveries doubled immediately. The case-mix index for newborns increased 66.6 percent, which increased the total Medicaid hospital expenditure 5.5 percent. Outlier payments increased total expenditure further. DRG distribution change among newborns has a large impact on spending because newborn complication DRGs have high weights. States adopting a DRG-based payment system for Medicaid should anticipate a greater increase in case mix than Medicare experienced.

Original languageEnglish (US)
Pages (from-to)63-70
Number of pages8
JournalHealth Care Financing Review
Issue number1
StatePublished - Dec 1 1990

ASJC Scopus subject areas

  • Health Policy


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