Unsupervised DRG Upcoding Detection in Healthcare Databases

Diagnosis Related Group (DRG) upcoding is an anomaly in healthcare data that costs hundreds of millions of dollars in many developed countries. DRG upcoding is typically detected through resource intensive auditing. As supervised modeling of DRG upcoding is severely constrained by scope and timeliness of past audit data, we propose in this paper an unsupervised algorithm to filter data for potential identification of DRG upcoding. The algorithm has been applied to a hip replacement/revision dataset and a heart-attack dataset. The results are consistent with the assumptions held by domain experts.