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Diagnosis Related Groups (DRG)
Under the current prospective payment system, CMS pays for inpatient hospital services on the basis of a rate per discharge that varies by the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case takes an individual hospital's payment rate per case and multiplies it by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG relative to the average resources used to treat cases in all DRGs.
Cases are classified into DRGs for payment under the prospective payment system based on the principal diagnosis, up to eight additional diagnoses, and up to six procedures performed during the stay, as well as age, sex, and discharge status of the patient.
Table Definitions
DRG Diagnosis Related Group
MDC Major Diagnostic Category
Indicator (*) Medicare Data have been supplemented by Data from 19 Sates for low volume DRGs
GMLOS Geometric Mean Length of Stay
AMLOS Arithmetic Mean Length of Stay
Relative Weights
DRG Payment
National Medicare Base Rate =$4,400 (Default)
DRGS 469 AND 470 contain cases which could not be assigned to valid DRGS
GEOMETRIC MEAN IS USED ONLY TO DETERMINE PAYMENT FOR TRANSFER CASES.
ARITHMETIC MEAN IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY.
RELATIVE WEIGHTS ARE BASED ON MEDICARE PATIENT DATA AND MAY NOT BE APPROPRIATE FOR OTHER PATIENTS.
This software application calculates DRG payments based on the formula:
DRG Relative Weight x Hospital Base Rate = Hospital Payment
A national (default) hospital base rate of $4,400 is used to calculate national base rates. You may enter any user defined value from 1 to 99,999.
A MDC of "PRE" indicates a DRG case that is directly assigned based upon procedure codes.
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