What are DRG codes used for?

Asked by Greg Heberling on September 09, 2021

Categories: Business and finance Healthcare industry

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A diagnosis-related group (DRG) is a patient classification system that standardizes prospective payment to hospitals and encourages cost containment initiatives. In general, a DRG payment covers all charges associated with an inpatient stay from the time of admission to discharge.

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.

Is DRG only for inpatient? As of October 2015, the diagnoses that are used to determine the DRG are based on ICD-10 codes. DRGs have historicallybeen used for inpatient care, but the 21st Century Cures Act, enacted in late 2016, required the Centers for Medicare and Medicaid Services to develop some DRGs that apply to outpatient surgeries.

How do I code DRG? Go to, 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 a DRG outlier payment? Medicare makes supplemental payments to hospitals, known asoutlier payments, which are designed to protect hospitals from significant financial losses resulting from patient-care cases that are extraordinarily costly. This report describes a more recent distribution of such payments.