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Bridging Clinical Care and Reimbursement: Demystifying ICU Billing and DRGsby Nitin Mehdiratta, MD
Introduction
For intensivists, time is often our most precious resource. Between rounding, procedures, and family meetings, few of us receive formal training in the systems that translate our clinical work into reimbursement. This article provides an overview of the key components of billing in the ICU setting, specifically focusing on professional billing of critical care services and hospital billing via Diagnosis-Related Groups (DRGs) and Case Mix Index (CMI).
Professional Billing
Professional billing refers to how individual physicians are reimbursed for services rendered. In the ICU, this most often involves billing for critical care time using CPT (Current Procedural Terminology) codes. According to the Centers for Medicare & Medicaid Services (CMS), critical care services are defined as the direct delivery of care to a critically ill or injured patient where there is a high probability of imminent or life-threatening deterioration of one or more vital organ systems. These services require high-complexity decision-making to assess, manipulate, and support failing organ systems or to prevent further decline.1
Two CPT codes form the backbone of critical care billing: 99291 is used for the first 30 to 74 minutes provided on a given calendar day, while 99292 is used for each additional 30-minute increment beyond that. To qualify for these codes, the physician must be immediately available and must not be concurrently providing care to other patients. Time spent at the bedside, reviewing diagnostics, coordinating care with consultants, and family meetings (more on this below) may all count toward total billable critical care time—so long as the work pertains directly to the ongoing management of the critically ill patient1.
It’s important to understand what does and does not count as separately billable procedures when providing care. Certain services—such as ventilator management, interpretation of chest X-rays, and examination of physiologic data —are bundled into critical care time and cannot be billed separately. However, procedures that require distinct clinical effort—such as endotracheal intubation, arterial or central lines, or bronchoscopies—should be billed independently using their own CPT codes. Importantly, the time spent performing these procedures is excluded from your total critical care time for that day.2
Family discussions can be billed as part of critical care time when the patient lacks decision-making capacity, and the conversation directly influences medical decision-making. To meet billing requirements, documentation must clearly state that the patient was unable to participate and that the discussion was essential to guiding care. Routine daily updates with family members does not qualify and should not be included in critical care time.3
Hospital Billing
While physicians bill for professional services, hospitals are reimbursed through a different mechanism: DRGs. DRGs are the main component of Medicare’s payment system, where hospitals receive a fixed payment based on the classification of the patient’s hospital stay, regardless of the actual length or intensity of care. The DRG is determined at the time of discharge by certified coders who review the principal diagnosis, secondary diagnoses, procedures performed, and discharge dispositionamongst other variables.
Each DRG is associated with a relative weight, which reflects the average resources consumed for a given diagnosis or procedure. More resource-intensive conditions and interventions carry higher relative weights and, thus, lead to higher hospital reimbursement. For example, DRG 871: Sepsis with Major Complication or Comorbidity (MCC) has a relative weight of approximately 2.0, while DRG 312: Syncope without MCC has a relative weight closer to 0.87.4 Hospitals multiply this weight by a hospital base rate to determine reimbursement.
Secondary diagnoses that meet certain clinical and coding criteria can be classified as Complications or Comorbidities (CC) or Major CCs (MCC). These modifiers increase the DRG weight and reflect the greater resource utilization associated with managing complex patients. Surgical procedures can also shift a patient from a medical DRG to a more highly weighted surgical DRG, particularly when major interventions like a tracheostomy or exploratory laparotomy are performed. These differences underscore how documentation of acuity can substantially influence payment. Let’s explore a short fictional example:
A 65-year-old woman is status post right hemicolectomy for perforated diverticulitis. Post-operatively, she is tachycardiac, hypotensive, hypoxemic, and has rising creatinine and white blood cell count. If you document: “Patient with leukocytosis, low urine output, increasing oxygen requirements”, this may get coded to DRG 331, Bowel Procedure without CC/MCC with a relative weight of 1.65. Instead, if you wrote: “Patient with signs concerning for early sepsis physiology, new acute kidney injury, escalating oxygen requirements consistent with acute hypoxemic respiratory failure”, the DRG would be 329, Major bowel procedure with MCC with a relative weight of 4.594. This is not upcoding, it is accurately reflecting the patient’s acuity!
The CMI is the average DRG weight across all discharged patients in a given time and serves as a surrogate marker for clinical complexity and resource allocation of a hospital’s patient population. Academic centers and ICUs often have higher CMIs due to the greater acuity and procedural intensity. Accurate and complete documentation is essential to capture this complexity; failure to document acute organ dysfunction or comorbidities like chronic kidney disease can result in under-coding which could diminish DRG weight and reduce reimbursement.
Moreover, DRGs play a critical role in hospital performance metrics, such as Observed/Expected (O/E) mortality ratios which are often risk-adjusted using DRG data. Documentation of clinically significant comorbidities improves severity adjustment and can more accurately reflect the complexity of ICU care provided.5
Conclusion
Critical care is one of the most resource-intensive domains of medicine, and appropriate billing—both at the professional and hospital level—ensures recognition of that value. Understanding critical care billing and DRG assignment empowers physicians to advocate for appropriate resources and improves transparency in performance metrics. While billing may not be the most glamorous part of ICU practice, it is a vital one, and engaging with these systems helps align clinical care with operational success.
References
Acknowledgements:
The author used ChatGPT (OpenAI) to assist with grammar, spelling, and language clarity during preparation of this article. All content and interpretations are the authors’ own. AuthorNitin Mehdiratta, MD
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