Importance of Case Mix Index

May 25 2023

While crucial in health care, case mix index (CMI) is often underappreciated in skilled nursing facilities (SNFs). CMI is a performance indicator detailing the history of each patient and procedure. On the financial side, employees track CMI to determine the reimbursements a facility receives. Amidst reimbursement cuts and constant regulatory changes , the number of reimbursements they receive matters.

So what is CMI, and why is it vital for your SNF or hospital? We'll answer these questions and help you determine how to increase your facility's CMI below.



What Is Case Mix Index?

Case mix index is defined as a facility's average diagnosis-related group (DRG) relative weight. The Centers for Medicare and Medicaid Services (CMS) use the index to measure the number of reimbursements a facility will receive for Medicaid and Medicare beneficiaries. The measurements reflect the complexity, diversity and severity of a patient's illnesses treated at the health care facility.

A higher case mix index signifies that a facility has treated a more significant number of resource-intensive, complex patients. As a result, the facility will get reimbursed at a higher rate.

You can calculate case mix index by dividing the sum of the Medicare Severity Diagnosis Related Group (MS-DRG) discharges by the total number of Medicare and Medicaid discharges in a given month and year.

Determine your facility's CMI with the following steps:

  • List each DRG billed during the CMI calculation period, including corresponding weights.
  • Total each relative weight and divide that by the total number of DRGs.
  • The result is your facility's case mix index calculation period.

As shown, it's simple for staff to calculate CMI without a complex calculator. It's best practice for SNFs to calculate their case mix index monthly and annually.


Why Is Case Mix Index Important?

Case mix index plays a vital role in your center's finances, performance and clinical documentation. CMI also impacts the valuation of your organization — industry leaders will often purchase SNFs after looking at CMI and its amount of reimbursements to determine whether it is worth acquiring.

For instance, two facilities with comparable patient groups and clinical capacities might report two different CMI values. While the patients they care for and the services provided might be the same, a lower CMI could signify that one center documents its cases less accurately.

A SNF with a higher CMI might mean they treat sicker patients, which would lead to the center receiving greater reimbursements due to the care they provide. Thus, case mix index is important for SNFs, playing a crucial role in valuation.


What Is a Good CMI Score for a Nursing Home?

The case mix index range is from 3.02 to 5.26, with 3.48 considered a good CMI score for a nursing home, hospital or other health care facility. CMI doesn't correlate to the number of annual discharges since CMI is a relative weight. Centers can have high CMIs no matter their discharge numbers, from a few thousand to under a hundred yearly discharges.

What Affects CMI In Skilled Nursing Facilities and Hospitals?


What Affects CMI In Skilled Nursing Facilities and Hospitals?

Your SNF or hospital's CMI can be impacted by many factors, from coding accuracy and documentation specificity to higher volumes of highly weighted DRGs and annual updates.

The following is a breakdown of these factors:

Coding Accuracy

When a facility correctly uses technology to produce accurate documentation and coding accuracy, it can provide more precise reimbursement claims. Computer-assisted coding (CAC) in health care facilities has many benefits, including reducing time spent coding, ensuring accuracy and improving workflow.

With better workflow, you can expect a faster submission of insurance claims, accurate documentation and better compliance with regulations. Coding accuracy often results in a higher case mix index for your SNF or hospital.

Documentation Specificity

Like any job, accurate documentation is required in the health care industry. And when it comes to long-term care facilities, documentation affects residents' lives. From noting the correct medications to recording a resident's temperature, documentation helps nurses establish consistent routines and promotes effective communication among rotating caregivers.

In the case of hospitals and SNFs, meeting regulatory documentation standards justifies their qualification for reimbursements. The higher a facility's CMI, the more staff can claim reimbursements. As a result, accurately documenting patients' conditions can increase a facility's CMI.

Highly Weighted DRGs

Highly weighted DRGs can mean a higher case mix index. For example, organ transplants, cardiothoracic surgeries, neurosurgeries and other similar procedures are considered higher-weighted DRGs. If your center offers these procedures, that could result in a higher CMI.

Annual Updates

Your CMI for a given year can be affected by updates from CMS.


How Can You Increase Your CMI?

Accurately documenting, coding and performing annual updates to your MS-DRG weights can improve CMI. To increase the reimbursements your facility receives, you should follow these tips to enhance CMI:

  • Train staff to increase documentation specificity.
  • Consistently follow through with ongoing, accurate documentation.
  • Use computer-assisted coding to improve coding accuracy.
  • Perform annual updates to your MS-DRG weights set by the CMS.


How Can Medrina Help?

When you work with Medrina, we'll help you improve your CMI by increasing physicians in your facility, delivering personalized care and improving documentation accuracy. Our physiatrists foster collaboration and communication, and centers that have worked with us have seen a 41% increase in case mix.

Here's what we can do for your health care center:

  • Deliver individualized care: Our physiatrists specialize in rehabilitation and are trained to diagnose and treat patients with functionally limiting physical or painful conditions. We are dedicated to maximizing patient independence and mobility in your SNF.
  • Improve your center's profitability: We aim to improve your SNF's key quality outcomes, improve your internal revenue sources and maintain your facility as a well-respected health care center. We can help your facility stand above other centers that do not have physiatrist programs.
  • Improve documentation: Our physiatrists are also trained in coding accuracy to gather the necessary information for accurate patient classification, helping improve your CMI.

Contact Medrina to Learn How We Can Increase Your CMI


Contact Medrina to Learn How We Can Increase Your CMI

A high CMI signifies a well-functioning health care facility. When you detail your patients' stories and procedures, you can receive accurate reimbursements to help you free up resources and reallocate them elsewhere in your facility. That's why working with experts who focus on personalized patient care and improving internal revenue sources is crucial.

At Medrina, we'll help your SNF follow best practices with accurate coding and documentation. Our physiatrists quickly become helpful, hands-on team members to improve your CMI and financials. Contact us today to learn more about how we can help your facility.

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