Buying efficiency: optimal hospital payment in the presence of double upcoding

摘要

Ever since the introduction of DRG payment of hospitals, there have been concerns about the truthfulness of their reporting. Because hospitals establish severity of illness, they are suspected by their sponsors to game the system by exaggerating true severity in an attempt to optimize revenue, by so-called ’upcoding’. Several empirical findings substantiate this suspicion ([ ], [ ], [ ], [ ]).