Case Mix Index (CMI)

How It Works

CMI is calculated by averaging the DRG weights for all of a hospital's Medicare discharges. Each DRG has a weight reflecting its relative resource use — a simple pneumonia case (weight ~0.7) uses fewer resources than open-heart surgery (weight ~7.0). A hospital with a CMI of 2.0 treats patients who are, on average, twice as resource-intensive as the national baseline. Large academic medical centers typically have CMIs above 2.0 because they treat the most complex cases. Community hospitals may have CMIs around 1.2-1.5. CMI directly affects Medicare payment — a higher CMI means higher total reimbursement, which is why "upcoding" (assigning higher-severity DRGs than warranted) is a compliance concern.

Related Terms

• Diagnosis Related Group (DRG) — A classification system that groups hospital inpatient stays into categories based on diagnosis, procedures, and patient complexity — used by Medicare to determine how much a hospital gets paid.
• Inpatient Prospective Payment System (IPPS) — Medicare's payment system for hospital inpatient stays — paying a fixed amount per DRG rather than reimbursing each individual service.
• Upcoding — The practice of assigning a patient to a higher-severity DRG code than their actual condition warrants — resulting in higher Medicare reimbursement.