what affects drg assignment

What Is a Medicare Diagnosis Related Group (DRG), and Why Does It Matter for Beneficiaries?

• by Lisa Eramo, MA
• January 12, 2024

As you probably know, healthcare is filled with acronyms. Although you may be familiar with many of them, here’s one that probably isn’t on your radar: DRG (diagnosis related group).

A DRG dictates how much Medicare pays the hospital if you’re admitted as an inpatient. However, keep in mind that your DRG does not affect what you owe for an inpatient admission when you have Medicare Part A coverage , assuming you receive medically necessary care and that your hospital accepts Medicare.

What exactly is a Medicare DRG?

A Medicare DRG (often referred to as a Medicare Severity DRG) is a payment classification system that groups clinically-similar conditions that require similar amounts of inpatient resources. It’s a way for Medicare to easily pay your hospital after an inpatient stay.

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Your Medicare DRG is based on your severity of illness, risk of mortality, prognosis, treatment difficulty and need for intervention as well as the resource intensity necessary to care for you.

Here’s how it works:

• Medicare pays your hospital a pre-determined amount for all of your health care costs based on the DRG that the hospital assigns to your specific hospital stay.
• This DRG includes payment for all of the services you receive while in the hospital (e.g., x-rays, MRIs and any surgeries). It also includes any supplies you use (e.g., bandages, alcohol swabs or bedpans).
• Your hospital therefore doesn’t need to bill for every individual item or service it provides to you, because it’s all rolled up into the DRG based payment.

In addition, your Medicare DRG also covers outpatient services that the hospital (or an entity owned by the hospital) provides you in the three days leading up to your hospitalization .

How is a Medicare DRG determined?

A Medicare DRG is determined by the diagnosis that caused you to become hospitalized as well as up to 24 secondary diagnoses (otherwise known as complications and comorbidities) you may have. Medical coders assign ICD-10 diagnosis codes to represent each of these conditions.

Any procedures you undergo while in the hospital may also affect your DRG. Medical coders also assign ICD-10 procedure codes for each procedure you have.

Finally, your age, gender and discharge status disposition (i.e., whether you went home after discharge or to another care setting such as an inpatient rehabilitation facility) can also affect Medicare DRG assignment.

Each DRG is weighted and has an associated average length of stay (i.e., the number of days an average patient stays in the hospital for that diagnosis and/or procedure). Each DRG weight has an associated dollar amount (known as the DRG base rate). This DRG base rate is adjusted based on a variety of factors, including the wage index in a given area .

For example, hospital A in New York City pays higher wages than hospital B in rural Oklahoma, thus the DRG based payment rate for same DRG will be higher for hospital A when all other factors remain the same. Similar adjustments are made for hospitals that treat a lot of uninsured patients and for teaching hospitals.

If you require extra hospital resources because you are particularly sick, your hospital may also receive an outlier payment that goes above and beyond the normal DRG based payment. It could also receive an add-on payment if your physician uses certain types of new medical services and technologies .

Something else to know: In some cases, if you acquire a condition while in the hospital ( known as a hospital acquired condition ), your hospital will be paid less for treating you. Some examples include Stage III and IV pressure ulcers, vascular catheter-associated infection, and air embolism. This is to incentivize hospitals to keep you safe while you receive care.

What is an example of a Medicare DRG?

For example, let’s say you’re admitted to the hospital to undergo a knee replacement. Your hospital will be paid for all of your healthcare costs based on Medicare DRG 470. However, if you’re admitted instead due to simple pneumonia, your hospital will be paid for your health care costs based on Medicare DRG 195.

In 2021, DRG 195 had a relative weight of 0.6650 in while DRG 470 had a relative weight of 1.8999. The higher-weighted DRG reflects the more invasive nature of the knee replacement and resources required for the procedure and post-surgical care.

To view a complete list of DRGs for 2022, including relative weights and geometric mean lengths of stay, visit the CMS Website.

Why were DRGs created?

The DRG system was created to standardize hospital reimbursement for Medicare patients while also taking regional factors into account.

Another goal was to incentivize hospitals to become more efficient. If your hospital spends less money taking care of you than the DRG payment it receives, it makes a profit. If it spends more than the DRG payment, it loses money.

Are there inherent flaws in the DRG system?

Yes, there are some flaws. For example, your hospital may channel its resources to higher-profit services. However, this is changing as hospitals shift toward new payment models that focus on paying one amount for all of your care over a period of time rather than for each specific service you receive.

The goal with these new payment models is to reward high-quality care and positive outcomes — and to keep you healthy and out of the hospital.

Another flaw with the DRG system is that your hospital may be tempted to discharge you sooner than it should so it doesn’t lose money. However, Medicare has rules in place that penalize hospitals in certain circumstances if a patient is readmitted within 30 days.

This deters premature discharges and helps ensure Medicare patients are discharge only when they are truly ready to go home or to another post-discharge care setting.

Are DRGs only for Medicare?

No, some private insurers use DRGs as well, though their specific DRG calculations might be different.

What else do I need to know about DRGs?

DRGs are updated annually, and the pre-determined amounts associated with each DRG may change from year to year. In 2021, hospitals use Medicare DRG version 39.1 .

Finally, your hospital’s billing department should be able to answer any questions you have about specific DRGs that were assigned for your hospital stay.

Medicare Advantage plans include out-of-pocket spending limits

Medicare beneficiaries may have the option of enrolling in a Medicare Advantage plan (Medicare Part C) that covers all of the benefits offered by Original Medicare (Parts A and B) but is offered by a private insurance company.

Medicare Advantage plans can include benefits that Original Medicare doesn't include. All Medicare Advantage plans are required to include an annual out-of-pocket spending limit, which Original Medicare doesn't offer.

Inpatient hospital care costs can add up quickly, depending on your diagnosis related group and the services you receive. The out-of-pocket spending limit of an Medicare Advantage plan can help protect you from potentially high hospitalization costs.

If you want to learn more about how a Medicare Advantage plan could help offer the benefits you need, call  to speak with a licensed insurance agent today or compare plans online, with no obligation to enroll.

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About the author

Lisa Eramo is an independent health care writer whose work appears in the Journal of the American Health Information Management Association, Healthcare Financial Management Association, For The Record Magazine, Medical Economics, Medscape and more.

Lisa studied creative writing at Hamilton College and obtained a master’s degree in journalism from Northeastern University. She is a member of the American Health Information Management Association, American Academy of Professional Coders, Society of Professional Journalists, Association of Health Care Journalists and the American Society of Journalists and Authors.

Lisa currently resides in Cranston, Rhode Island with her wife and two-year-old twin boys.

Website : LisaEramo.com

LinkedIn : Lisa Eramo

Twitter : @Lisa_Eramo

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What Are Diagnostic-Related Groups (DRG)?

Fixed fees for services ensure hospitals don't run up costs unnecessarily

• How It Works
• Case-Mix Complexity
• Why DRGs Exist
• Impact on Care

Frequently Asked Questions

A diagnostic-related group (DRG) is how Medicare (and some health insurance companies ) categorize hospitalization costs to determine how much to pay for your hospital stay. Instead of paying for each individual service, a predetermined amount is set based on your DRG.

The DRG is based on your primary and secondary diagnoses, other conditions (comorbidities), age, sex, and necessary medical procedures. The system is intended to make sure that the care you need is the care you get, while also avoiding unnecessary charges.

This article discusses diagnostic-related groups. It explains how DRGs factor into Medicare payments and how this designation may impact your care.

What Are Diagnosis-Related Grouping (DRG) Systems?

Since the 1980s, the DRG system has included both:

• An all-payer component for non-Medicare patients
• The Medicare-Severity Diagnostic-Related Group (MS-DRG) system for Medicare patients

The MS-DRG system is more widely used and is the focus of this article.

MS-DRG System

Under Medicare’s DRG approach, Medicare pays the hospital a predetermined amount under the inpatient prospective payment system (IPPS). The exact amount is based on the patient’s DRG or diagnosis.

Long-Term Care

A different system called the Long-Term Care Hospital Prospective Payment System (LTCH-PPS) is used for long-term acute care hospitals.

It’s based on different DRGs under the Medicare Severity Long-Term Care Diagnosis-Related Groups system (MS-LTC-DRGs) .

How Do DRGs Work?

When you’re discharged from the hospital, Medicare will assign a DRG based on the main diagnosis that caused the hospitalization, plus up to 24 secondary diagnoses.

Every person is different, and two patients with the same condition might need very different types of care. As such, the DRG can also be affected by your:

• Primary diagnosis
• Secondary diagnoses
• Comorbidities
• Necessary medical procedures

How Payment Amounts Are Set

To determine DRG payment amounts, Medicare calculates the average cost of the resources needed to treat people in a particular DRG.

This base rate is then adjusted based on various factors, including the wage index for a given area. For example, a hospital in New York City pays higher wages than a hospital in rural Kansas, which is reflected in the payment rate each hospital gets for the same DRG.

For hospitals in Alaska and Hawaii, Medicare adjusts the non-labor portion of the DRG base payment amount because of the higher cost of living .

Adjustments to the DRG base payment are also made for teaching hospitals and hospitals that treat many uninsured patients .

The baseline DRG costs are recalculated annually and released to hospitals, insurers, and other health providers through the Centers for Medicare and Medicaid Services (CMS).

If the hospital spends less than the DRG payment on your treatment, it makes a profit. If it spends more than the DRG payment treating you, it loses money.

What Is Case-Mix Complexity? 

Case-mix complexity is used in tandem with DRGs. The term refers to distinct patient attributes that may affect the cost of care. These include:  

• Severity of illness
• Treatment difficulty
• Need for intervention
• Resource intensity

Case-mix complexity is generally used to denote patients with a poor prognosis or greater severity of illness, treatment difficulty, or need for intervention.

It factors in complications or comorbidities (CC) and can include hospital-acquired conditions, such as a surgical site infection or a pulmonary embolism following joint-replacement surgery.

To healthcare providers , case-mix complexity refers to the patient’s condition and the type of treatment they need.

To hospital administrators , it indicates the degree of resources needed and how much that will cost.

Insurance regulators use these to determine how much they pay.

What Is the History of the DRG System?

Before the DRG system was introduced in the 1980s, the hospital would send a bill to Medicare or your insurance company that included charges for every bandage, X-ray, alcohol swab, bedpan, and aspirin, plus a room charge for each day you were hospitalized.

This incentivized hospitals to keep you for as long as possible, perform as many procedures as possible, and use more supplies.

As healthcare costs increased, the government looked for ways to control costs while encouraging hospitals to provide care more efficiently. The DRG system is what resulted.

DRGs changed how Medicare pays hospitals.

What Is the Impact of DRGs on Health Care?

The DRG payment system encourages hospitals to be more efficient and reduces their incentive to overtreat you. This has both benefits and drawbacks for patient care.

The DRG system is intended to standardize hospital reimbursement and:

• Improve efficiency
• Reduce length of stay
• Lower costs of treatment 

For a patient, the DRG system makes it less likely for the hospital to order unnecessary tests.

It can also mean you may be discharged earlier than if the DRG wasn't in place, allowing you to recover in the comfort of your home.

The diagnostic-related grouping system also has its drawbacks. For patients, this includes:

• Possible decreased quality of care : For example, the necessity of tests is determined by an administrative formula, which may not fit every patient’s needs.
• Upcoding or receiving a more severe diagnosis than necessary , which can cause undue worry and stress for patients and their loved ones
• Being discharged too early or moved to a rehabilitation or long-term care facility too soon, as a way to save the hospital money
• Increased odds of hospital readmission due to early discharge

For hospitals, the reimbursement methodology affects the bottom line. As a result, many private hospitals channel their resources to higher-profit services.

To counter this, the Affordable Care Act (ACA) introduced Medicare payment reforms, including bundled payments and Accountable Care Organizations (ACOs).

Still, DRGs remain the structural framework of the Medicare hospital payment system.

Discharge Rate

Hospitals are eager to discharge you as soon as possible and are sometimes accused of discharging people before they’re healthy enough to go home safely.

Medicare has rules that penalize a hospital in certain circumstances if a patient is readmitted within 30 days. This is meant to discourage early discharge—a practice often used to increase the bed occupancy turnover rate.

Outpatient Services

Hospitals are often eager to open beds for incoming patients. As a result, the hospital may discharge patients to an inpatient rehab facility or home with a visiting nurse service or other home health support.

Discharging patients sooner rather than later helps the hospital make a profit from the DRG payment. However, Medicare requires the hospital to share part of the DRG payment with the rehab facility or home healthcare provider to offset the additional costs associated with those services.

The IPPS payment based on your Medicare DRG also covers outpatient services that the hospital (or an entity owned by the hospital) provided in the three days leading up to the hospitalization.

Outpatient services are typically covered under Medicare Part B, but this is an exception to that rule, as the IPPS payments come from Medicare Part A.

The main benefits are increased efficiency, better transparency, and reduced average length of stay.

These are all medical codes, but they each have different meanings:

• ICD (international classification of diseases) : Classifies a patient’s diagnosis
• CPT (current procedural terminology) : Describes services a healthcare professional provides to a patient
• DRG (diagnostic-related group): Categorizes hospital services using information from a patient’s diagnosis (ICD), treatment provided (CPT), and other factors

Value Health Care Services. What is a Medicare severity-diagnosis related group (MS-DRG)?

Centers for Medicare and Medicaid Services. Design and development of the diagnosis related group (DRG) .

Centers for Medicare and Medicaid Services. Medicare payment systems .

Zhang L, Sun L. Impacts of diagnosis-related groups payment on the healthcare providers' behavior in China: a cross-sectional study among physicians . Risk Manag Healthc Policy . 2021;14:2263–76. doi:10.2147/RMHP.S308183

Catalyze. Accountable care organizations (ACOs) .

Centers for Medicare and Medicaid Services. Hospital-wide all-cause unplanned readmission measure .

Mihailovic N, Kocic S, Jakovljevic M. Review of diagnosis-related group-based financing of hospital care .  Health Serv Res Manag Epidemiol . 2016;3:2333392816647892. doi:10.1177/2333392816647892

By Elizabeth Davis, RN Elizabeth Davis, RN, is a health insurance expert and patient liaison. She's held board certifications in emergency nursing and infusion nursing.

Diagnosis-Related Group (DRG)

• First Online: 20 July 2023

Cite this chapter

• Peter L. Elkin 2 &
• Steven H. Brown 3 , 4  

Part of the book series: Health Informatics ((HI))

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Prospective payment rates based on diagnosis-related groups (DRGs) have been established as the basis of Medicare’s hospital reimbursement system. The DRGs are a patient classification scheme, which provides a means of relating the type of patients a hospital treats (i.e., its case mix) to the costs incurred by the hospital. The design and development of the DRGs began in the late 1960s at Yale University. The initial motivation for developing the DRGs was to create an effective framework for monitoring the quality of care and the utilization of services in a hospital setting. The first large-scale application of the DRGs was in the late 1970s in the State of New Jersey. The New Jersey State Department of Health used DRGs as the basis of a prospective payment system in which hospitals were reimbursed a fixed DRG-specific amount for each patient treated. In 1982, the Tax Equity and Fiscal Responsibility Act modified Section 223 Medicare hospital reimbursement limits to include a case mix adjustment based on DRGs. In 1983, Congress amended the Social Security Act to include a national DRG-based hospital prospective payment system for all Medicare patients.

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Elkin, P.L., Brown, S.H. (2023). Diagnosis-Related Group (DRG). In: Elkin, P.L. (eds) Terminology, Ontology and their Implementations . Health Informatics. Springer, Cham. https://doi.org/10.1007/978-3-031-11039-9_16

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The first section of the Procedure Code/MS-DRG Index is a reference source of all ICD-10-PCS procedure codes that affect MS-DRG assignment, the MDCs and MS-DRGs to which they are assigned, and a description of the surgical categories. The procedure codes are listed in code order with an * indicating the non-operating room procedures. All procedures without an * are considered OPERATING ROOM PROCEDURES by the MS-DRGs. A + beside a procedure indicates that it is also a member of a Procedure Code Combination, also called a 'Procedure Cluster'. These are combinations of procedures, which, when found on a patient record, are treated differently than their constituent codes. The second section of this Appendix lists each procedure cluster and the surgical categories to which it is assigned. The third section of this Appendix lists a few procedure combinations for which the combination is designated non-OR even though one or more of the procedures in the combination are considered O.R. These are defined to allow the ICD-10-CM/PCS MS-DRGs to replicate the ICD-9-CM MS-DRGs where a non-OR ICD-9-CM code can only be represented by a combination of ICD-10-PCS codes. The fourth section of this Appendix lists those procedures that are specific to the logic for any MDC 14 surgical MS-DRG assignment.

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Guest post: determining the ms-drg.

By Cheryl Ericson, MS, RN, CCDS, CDIP

Many clinical documentation improvement (CDI) specialists with clinical backgrounds are encoder dependent, trained to “code” using an encoder and taught to create a working MS-DRG based on grouper software. Many coders also rely on the encoder. However, CDI specialists and coders should understand how to manually assign a MS-DRG, too.

The basics steps for assigning a MS-DRG are:

• Identify all the reportable diagnoses in the health record and assign their applicable ICD code (we currently use ICD-9-CM, but will transition to ICD-10-CM October 1).
• Identify the principal diagnosis (the condition after study determined to be chiefly responsible for occasioning the admission). The remaining diagnoses are secondary diagnoses, some of which may be classified by CMS as a CC or MCC.
• Use the Alphabetic Index of diagnoses in the  DRG Expert  to identify the base/medical MS-DRG, noting its Major Diagnostic Category (MDC)/body system by scanning the MS-DRGs associated with the listed pages to see which applies to the particular scenario. The MDC is necessary to assign the surgical MS-DRG when applicable.
• Identify all reportable procedures and their associated procedure code (ICD-9-CM Volume 3 until we transition to ICD-10-PCS).

The Uniform Hospital Discharge Data Set (UHDDS) defines reportable diagnoses and procedures. Most coders and CDI specialists are familiar with the definitions associated with diagnoses, but less familiar with those associated with procedures. You should only report significant procedures. According to UHDDS, a significant procedure is one that is either:

• Surgical in nature
• Carries a procedural risk
• Carries an anesthetic risk
• Requires specialized training

In addition, UHDDS defines the principal procedure as:

• One that was performed for definitive treatment, rather than one performed for diagnostic or exploratory purposes, or was necessary to take care of a complication
• If two procedures could be principal, then select the one most related to the principal diagnosis

The UHDDS definitions of significant procedures is helpful because not all procedures will affect the MS-DRG. Some procedures won’t have any impact on the MS-DRG, some procedures will change the base medical MS-DRG, and some procedures will move the case to a surgical MS-DRG.

Procedures that are diagnostic in nature are less likely to impact the MS-DRG assignment because they are typically performed in the outpatient setting, which is why they are less likely to be the principal procedure. Also, the principal procedure is usually related to the principal diagnosis, meaning they usually can be found in the same MDC/body system. ICD-10-PCS has specific guidelines regarding the assignment of the principal procedure.

If a procedure was performed, determine if it is significant:

• If there are multiple significant procedures determine the principal procedure
• It is not a “reimbursable” procedure (i.e., one that will not affect the MS-DRG assignment)
• It is a major operating room procedure

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Conditions that Impact MS-DRG Assignment for Newborns

• By Laurie M. Johnson, MS, RHIA, FAHIMA, AHIMA Approved ICD-10-CM/PCS Trainer
• December 10, 2019

Birth weight is used by APR-DRGs and MS-DRGs, and it impacts the assigned group.   

The topic of newborns is rarely addressed when we talk about coding or clinical documentation integrity. Birth weight, prematurity, extreme prematurity, and other significant problems are all conditions that impact the MS-DRG assignment.

Newborns are assigned to MS-DRGs in Major Diagnostic Category (MDC) 15. An interesting fact regarding this MDC is that there is not a surgical division for it. Here are some important definitions that impact the MS-DRG assignment:

• Neonate – an infant less than four weeks old
• Prematurity – the birth weight of 1,000-2,499 grams, or gestational age of 27-36 completed weeks of gestation
• Extreme prematurity – birth weight less than or equal to 999 grams, or gestational age of 23-26 completed weeks of gestation

The diagnosis codes on the newborn’s episode of care should begin with “P,” which would indicate a perinatal condition. It is important to be aware that not all diagnosis codes assigned to the newborn begin with “P,” as there are some “regular” codes that can be assigned as well. The diagnosis codes that begin with “O” can only be assigned to the mother’s episode of care. An edit will display if the codes are used incorrectly.

The above definitions relate to a coding perspective. The diagnoses of prematurity are assigned to MS-DRGs 791 and 792, depending on the presence of major problems. The diagnosis of extreme prematurity is assigned to MS-DRG 790.

Major problem diagnoses may also impact Full Term Neonates (MS-DRG 793) or Neonate (MS-DRG 794) codes. Examples of major problems include maternal conditions affecting the newborn; birth injuries; metabolic disturbances of the newborn; adverse effects of drugs; Rh or ABO incompatibility, and some congenital deformities.

Some code examples of the aforementioned categories are P07.14 (other low birth weight newborn, 1,000-1,249 grams); T50.4X5A (Adverse effect of appetite depressants, initial encounter); P36.4 (Sepsis of newborn due to Escherichia coli); P10.0 (Subdural hemorrhage due to birth injury); and P74.21 (Hypernatremia of newborn).

Conditions such as observation and evaluation of newborns for suspected conditions do not impact the MS-DRG assignment (see category Z05). Normal newborns are grouped by the principal diagnosis, which is most frequently found in category Z38. Some conditions that may be expected to impact the MS-DRG grouping are newborns affected by a prolapsed cord, newborns being light for gestational age, and extreme immaturity of a newborn of unspecified weeks of gestation. The unspecified information identifies a need for clinical documentation integrity.

From a clinical documentation integrity perspective, the newborn record should specify if the infant was born in the hospital or outside the hospital; congenital versus acquired conditions; gestational age; and birth injuries. Birth injuries can affect all body systems, so the specific body system and the extent of the injury are important in assigning the correct diagnosis code.

Remember that birth weight is used by APR-DRGs and MS-DRGs, and it impacts the assigned group. The specific codes can be found in the MS-DRG Definitions Manual, version 37, available online at https://www.cms.gov/icd10m/version37-fullcode-cms/fullcode_cms/P0017.html .

Programming Note:

Listen to Laurie Johnson’s live reports every Tuesday on Talk Ten Tuesday , 10-10:30 a.m. EST,

• TAGS: MS-DRG

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What factors influence DRG assignment and reimbursement?

Also question is, what directly influences the assignment of DRGs?

One MS- DRG is assigned to each inpatient stay. The MS- DRGs are assigned using the principal diagnosis and additional diagnoses, the principal procedure and additional procedures, sex and discharge status. Diagnoses and procedures assigned by using ICD-9-CM codes determine the MS- DRG assignment .

Beside this, what affects DRG assignment?

When an OR procedure is performed, a surgical DRG is assigned . CCs and MCCs are secondary diagnoses that may impact the DRG assignment (see examples in Table). In most cases, a CC increases the relative weight and an MCC results in an even higher weight that impacts severity and reimbursement.

Calculating DRG payments involves a formula that accounts for the adjustments discussed in the previous section. The DRG weight is multiplied by a “standardized amount,” a figure representing the average price per case for all Medicare cases during the year.

Why is DRG important?

One important subject to investigate is Diagnosis-Related Groups ( DRGs ). DRGs are a means of classifying a patient under a particular group where those assigned are likely to need a similar level of hospital resources for their care. The system was to be used to help hospital administrators control physician behavior.

How many DRGs are used?

Diagnosis-related group ( DRG ) is a system to classify hospital cases into one of originally 467 groups, with the last group (coded as 470 through v24, 999 thereafter) being "Ungroupable".

Is DRG only for Medicare?

Medicare's DRG system is called the Medicare severity diagnosis-related group, or MS- DRG , which is used to determine hospital payments under the inpatient prospective payment system (IPPS). As of October 2015, the diagnoses that are used to determine the DRG are based on ICD-10 codes.

How does coding affect reimbursement?

Medical coding is a major factor in obtaining insurance reimbursement as well as maintaining patient records. Coding claims accurately allows the insurance payer to know the illness or injury of the patient and the method of treatment. If there is an error in the coding , it can result in the claim being denied.

What are DRG codes used for?

DRG Codes (Diagnosis Related Group) Diagnosis-related group ( DRG ) is a system to classify hospital cases into one of approximately 500 groups, also referred to as DRGs , expected to have similar hospital resource use . They have been used in the United States since 1983.

How is APR DRG reimbursement calculated?

Just as with MS- DRGs , an APR - DRG payment is calculated by using an assigned numerical weight that is multiplied by a fixed dollar amount specific to each provider. Each base APR - DRG , however, considers severity of illness and risk of mortality instead of being based on a single complication or comorbidity.

What does the acronym DRG represent how are DRGs used?

In 1983, the government enacted the system using diagnosis related groups ( DRGs ) as the payment methodology. The theory is based upon patients with similar characteristics consuming similar resources. The status indicates the new location of the patient.

What are some advantages and disadvantages of DRGs?

The advantages of the DRG payment system are reflected in the increased efficiency and transparency and reduced average length of stay. The disadvantage of DRG is creating financial incentives toward earlier hospital discharges. Occasionally, such polices are not in full accordance with the clinical benefit priorities.

How many DRG codes are there?

740 DRG categories

What is the difference between DRG and APC?

APCs are similar to DRGs . Both APCs and DRGs cover only the hospital fees, and not the professional fees, associated with a hospital outpatient visit or inpatient stay. DRGs have 497 groups, and APCs have 346 groups. Payments for both are based on a weight for each DRG / APC and a rate for the facility.

What is the MS DRG?

A Medicare Severity-Diagnosis Related Group ( MS - DRG ) is a system of classifying a Medicare patient's hospital stay into various groups in order to facilitate payment of services.

What is the difference between DRG and MS DRG?

A:Garri L. Garrison: Medicare Severity-Diagnosis Related Groups ( MS - DRG ) is a severity-based system. So the patient might have five CCs, but will only be assigned to the DRG based on one CC. In contrast to MS - DRGs , full severity-adjusted systems do not just look at one diagnosis.

What is IP DRG coding?

Job Description - IP / DRG Medical Coders Focuses on continuous improvement by working on projects that enables customers to arrest revenue leakage while being in compliance with the standards. Focuses on updating coding skills, knowledge, and accuracy by participating in coding team meetings and educational conferences.

How do I code DRG?

Go to http://www.irp.com, click on the Medicare DRG Calculator, and enter patient data and codes assigned to determine the DRG for each IPCase. Notice that you must select a Y, N, U, W or 1 present on admission (POA) indicator from the dropdown menu next to each ICD-9-CM diagnosis code entered.

What is APR DRG?

All Patients Refined Diagnosis Related Groups ( APR DRG ) is a classification system that classifies patients according to their reason of admission, severity of illness and risk of mortality.

How is the base payment rate for each DRG determined?

Under the IPPS, each case is categorized into a diagnosis-related group ( DRG ). Each DRG has a payment weight assigned to it, based on the average resources used to treat Medicare patients in that DRG . The base payment rate is divided into a labor-related and nonlabor share.

What is a working DRG?

Working DRGs are defined as DRGs allocated on admission based on the presenting problem or provisional diagnosis. Patients were then concurrently reviewed until discharge. Actual length of stay (LOS) of patients was compared to the LOS predicted by the working DRG .

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