MS-DRG System

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MS-DRG System for Hospital Inpatient services:
MS-DRG (Medicare Severity-Diagnosis Related Group) is a payment system that helps in classifying Medicare patient’s hospital stay under different groups to calculate pricing for inpatient hospital claims. DRG payment system is based on Prospective payment system that has been established for determining the Medicare Hospital reimbursements which is a patient classification scheme that provides information related to type of patients a hospital treats (i.e. case mix) and the costs incurred for the hospitals. DRG system primarily based on primary diagnoses, secondary diagnoses, surgical procedures, age, sex and discharge status of patients. This DRG system assigns a numeric value for the acute care …show more content…
In 1982, Tax Equity and Fiscal Responsibility Act made amendment to section 223, Medicare Hospital reimbursement limits should include case mix adjustments based on the DRG system. Later in 1987, 3M healthcare solutions developed a reimbursement model “all patient DRG (AP-DRG)” system for non-Medicare discharges for a New York based hospital which was later implemented by state Medicaid agencies. Again in 1990, 3M came up with new model “all patient refined DRG (APR-DRG)” system to address the severity of illness and risk of mortality in the reimbursement procedure. This model was used by State of Maryland in 2005 as a part of new payment regulations for rate settings regulated by Health Service Cost Review Commission.In1989, Yale University’s project work led to development of Refined DRG (RDRG) system which consider the severity of illness in the Medicare population and this model was re-evaluated by CMS in 1993 and developed a Severity DRG model which is based on the use of complications and comorbidities within the Medicare DRGs but wasn’t implemented back
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