Diagnosis Related Groups DRGs
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Diagnosis Related Groups DRGs

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Diagnosis Related Group (DRG): is a payment category that is used to classify patients, especially Medicare patients, for the purpose of reimbursing hospitals for each case in a given category with a fixed fee regardless of the actual costs incurred. DRG is based upon: the principal ICD-9-CM
Diagnosis Related Groups DRGs

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1. Diagnosis Related Groups (DRGs)

2. Diagnosis Related Group (DRG): is a payment category that is used to classify patients, especially Medicare patients, for the purpose of reimbursing hospitals for each case in a given category with a fixed fee regardless of the actual costs incurred. DRG is based upon: the principal ICD-9-CM diagnosis code ICD-9-CM surgical procedure code age of patient expected length of stay in the hospital

3. History In the mid 1970s the Centre for Health Studies at Yale University began work on a system for monitoring hospital utilization review. Following a 1976 trial of a DRG system, it was decided to base the final system on the ICD-9-CM which would provide the basic diagnostic categories

4. Purpose. relate a patient?s diagnosis and treatment to the cost of their care Developed in the United States by the Health Care Finance Administration DRGs are used for reimbursement in the prospective payment system of US Medicare and Medicaid healthcare insurance systems DRGs were designed to support the calculation of federal reimbursement for healthcare delivered through the U.S. Medicare system

5. DRG Structure Major Diagnostic category Medical Surgical split Complications & Comorbidities Exclusion list Structure diagram DRG Example with severity score Split ?????? Split ??????

6. Major Diagnostic Category Assignment (MDC) The initial step in the determination of the DRG has always been the assignment to the appropriate MDC based on the Principal Diagnosis Since the presence of a surgical procedure requires different hospital resources (operating room, recovery room, anesthesia) most MDCs were initially divided into medical and surgical groups

9. Medical Surgical split All procedure codes were classified based on whether or not they required the use of an operating room Operating room procedures ? Cholecystectomies ? Cerebral meninges biopsies ? Closed heart valvotomies Non operating room procedures ? Bronchoscopy ? Skin sutures

10. Complications & Comorbidities (CCs) A complication is a condition which did not exist prior to the admission A comorbidity is a condition which existed prior to admission A complication or comorbidity is a secondary diagnosis which would be expected to extend the patient?s length of stay by at least one day in at least 75 percent of patients

11. Major CCs Within each MDC patients with major CCs (e.g., AMI, CVA, etc.) were assigned to separate DRGs A major complication or comorbidity is a secondary diagnosis which would be expected to extend the patient?s length of stay by at least 3-4 days in at least 75 percent of patients

12. Complication & Comorbidity (CC) Exclusion List For a principal diagnosis of bladder neck obstruction ? Urinary retention is not a CC For a principal diagnosis of general convulsive epilepsy ? Convulsion is not a CC

13. Surgical Hierarchy If multiple procedures are present, the patient is assigned to a single surgical DRG based on a surgical hierarchy within each MDC

14. DRG assignment A DRG is assigned based on the patient's diagnosis (ICD-9-CM coding).? The encoder (also known as the DRG grouper) is a software program developed by CMS that places the patient into a Major Diagnostic Category based on the diagnosis.?? For example:? A patient with a fracture? would be grouped to the Musculoskeletal Major Diagnostic Category.? At this point, the patient is considered a medical DRG.? If the patient has a surgical procedure, then the patient is grouped to a surgical DRG.? The other factors that influence DRG assignment is age of the patient, any complication/comorbidities, and discharge status.??

16. Limitations

17. Developments DRGs are designed for use with inpatients. Accordingly, other systems have been developed for other areas of healthcare. Systems such as Ambulatory Visit Groups (AVGs) and Ambulatory Payment Classifications (APCs) have been developed for outpatient or ambulatory care in the primary sector. These are based upon a patient?s diagnosis, intervention, visit status and physician time.

18. DRG audits DRG audits may consists of evaluating those DRGs that are incorrectly used.? These audits may also focus on missing diagnoses, missing procedures, and incorrect principal diagnosis selection For DRG based reviews, cases may be selected in a variety of ways: ? Simple random sample ? High dollar and high volume DRGs ? DRGs without comorbid conditions or complications ? Focused DRGs such as DRG 79 Pneumonia or DRG 416 Septicemia and other high risk DRGs ? Correct designation of patient discharge and transfer status

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