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November 23, 2022

Most people involved with coding and billing are at least familiar with today’s diagnosis-related group (DRG) system for paying inpatient hospital admissions.

Most people involved with coding and billing are at least familiar with today’s diagnosis-related group (DRG) system for paying inpatient hospital admissions. Medicare made a dramatic change in 1983 in how it handled hospital payments for its members.

Instructions:

Review the PDF from CMS (Centers for Medicare and Medicaid Services) on the Acute PPS system from this unit’s reading.

What is a DRG? What is the difference between a DRG and an MS-DRG?

How are DRGs or MS-DRGs developed and calculated? What are the components of each?

What are the pros and cons associated with the DRG system?

How can the DRG affect the hospital’s business plan for future growth? Think about how this information would serve you in planning as a billing department manager.

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