Diagnostic Related Group Inpatient Hospital Reimbursement. Annual Update Process Presented by: APS Healthcare August 1, 2008. Overview. DRG payment per discharge = DRG Weight x Peer Group Base Rate + Outlier Adjustment DRG Weight, Base Rate, and Outlier Adjustment are updated annually.
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Diagnostic Related Group Inpatient Hospital Reimbursement
Annual Update Process
Presented by: APS Healthcare
August 1, 2008
DRG Weight x Peer Group Base Rate
+ Outlier Adjustment
The formula for a DRG payment is:
(DRG Relative Weight)
(Hospital Base Rate)
Average Cost of Discharges per DRG ÷ Average Cost of All Discharges
Obtained from CMS
These variables and cost-to-charge ratios are
updated and verified with letters to
Administrators in August.
The 32 types are arranged from lowest to highest average cost, and grouped into five quintiles by cumulative percent of cost.
GroupHospitalsBase RateBase Rate
1 1 95.30%$3,957