Case Mix Index

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Case Mix Index (CMI) is the average DRG weight for all of a hospital's Medicare volume. It can be used to adjust the average cost per patient (or day) for a given hospital relative to the adjusted average cost for other hospitals by dividing the average cost per patient (or day) by the hospital's calculated CMI. The adjusted average cost per patient would reflect the charges reported for the types of cases treated in that year.

For example, if Hospital A has an average cost per patient of $1,000 and a CMI of 0.80 for a given year, their adjusted cost per patient is $1,000 / 0.80 = $1,250. Likewise, if Hospital B has an average cost per patient of $1,500 and a CMI of 1.25, their adjusted cost per patient is $1,500 / 1.25 = $1,200.

Therefore, if a hospital has a CMI greater than 1.00, their adjusted cost per patient or per day will be lowered and conversely if a hospital has a CMI less than 1.00, their adjusted cost will be higher.