Diagnosis Related Groups (DRG) were first created in the 1960s and incorporated into the US healthcare system in 1983 with the implementation of prospective payment systems. A DRG is a classification that groups patients according to diagnosis, type of treatment, age, and other criteria. It groups diagnosis codes with common level of resources necessary to provide care. Grouping diagnosis codes by DRG codes helps control healthcare costs because hospitals are paid a set fee for treating patients in a single DRG category, regardless of the individual's actual cost of care. Payment of this fee varies based upon the individual's benefit plan coverage.
A DRG classifies patients according to diagnosis, type of treatment, age, and other criteria. DRGs are used to define the level of resource consumption for care rendered to a patient.
For example, the level of care to treat a minor heart attack is much less than that to treat a major heart attack. The minor heart attack is assigned one DRG code and the major heart attack is assigned another. The DRG assignment is based on a combination of the client's age and gender, the primary and/or secondary diagnosis codes, the procedure codes, and discharge status of the patient.
DRGs can be divided into two major categories: surgical and medical. The presence of a surgical procedure code that indicates use of an operating room radically affects DRG assignment.
Using the example above, a minor heart attack may require the use of an emergency room and a basic hospital room for monitoring and care. A major heart attack may require a surgery or surgical procedures using an operating room to clear a blockage or conduct bypass surgery. The level of resources required for the care of a major heart attack patient is significantly greater than the resources needed to care for a minor heart attack patient.
Thus, the fee for services rendered by the hospital on its discharge billing is greater for a major heart attack than for a minor heart attack.
DRG is the basis for one type of Institutional reimbursement. A hospital specific fee is calculated for each diagnosis group for each hospital. Factors of age, gender, length of stay data, and historical costs for each hospital are taken into consideration in calculating the reimbursement amount. Usually mental institutions and pediatric hospitals are excluded from DRG reimbursement due to the abnormal length of stay experienced by most patients.
DRG in the Code Maintenance function of Rules Management allows you to maintain the information about the DRG codes.
How to Delete a DRG Code Detail Span
How to Void a DRG Code Detail Span
Version as of 5/16/14.
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