Case Mix Index (CMI)
Case Mix Index is the average DRG relative weight across all Medicare inpatient discharges for a hospital, serving as the primary indicator of patient complexity and a direct driver of inpatient revenue.
What is Case Mix Index?
Case Mix Index (CMI) is calculated by summing the relative weights of all MS-DRGs assigned to a hospital's discharges during a period, then dividing by the total number of discharges. CMI = Sum of all DRG relative weights ÷ Total discharges. The CMI reflects both the genuine clinical complexity of patients treated and the quality of clinical documentation and coding.
CMI Benchmarks and Revenue Impact
National average CMI for Medicare patients is approximately 1.70, though this varies significantly by hospital type. Academic medical centres and major teaching hospitals typically have CMIs of 2.0–2.5+, while community hospitals may range from 1.4–1.8. A 0.1 increase in CMI across a hospital discharging 10,000 Medicare patients annually with a base rate of $6,200 represents approximately $6.2 million in additional annual revenue — making CMI one of the highest-leverage financial metrics for hospital administrators.
Clinical Documentation Improvement (CDI)
Most hospitals that experience CMI below their expected level based on patient population have a documentation gap rather than a genuine acuity gap. Clinical Documentation Improvement (CDI) programmes focus on ensuring that physicians document all relevant diagnoses with sufficient specificity to capture CC and MCC status in the appropriate MS-DRG. Common documentation gaps include: heart failure without specifying systolic vs diastolic and acute vs chronic; malnutrition documented insufficiently to support an MCC; sepsis criteria present but not documented as sepsis.
CMI vs Staffing and Length of Stay
CMI-adjusted LOS benchmarks are essential — comparing raw length of stay across hospitals without adjusting for CMI is misleading. A hospital with a higher CMI is expected to have a longer LOS. Similarly, nursing workload models and staffing ratios should be CMI-adjusted to accurately reflect care intensity per patient day.