Under-coding in Australia limits the performance of DRG groupers.

The Diagnosis Related Group (DRG) system is now used extensively in Australia to classify acute inpatients for many applications, including payments to hospitals. The quality of the inpatient separation data affects the performance of the DRG version, especially its predictive validity. Data from the State of Maryland, in the United States, contain more secondary diagnosis and procedure codes than Australian data. A comparison of the performance of DRG versions using data from Australia and Maryland allowed us to answer the following research question: What impact did these additional codes have on the performance of the DRGs? The best performance in predictive validity (R2) was obtained using the Maryland data no matter which DRG version was used. Casemix-adjusted code counts showed that more diagnoses were coded in Maryland. The most plausible reason for this was that conditions were not being recorded comprehensively by doctors in the medical record in Australia.