Understanding the Evolution of Diagnosis Related Groups

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Diagnosis Related Groups also known as DRGs was created in the early 1970s by Yale University to explain the different types of care provided to patients that were admitted to an acute healthcare facility (Evolution of DRGs (2010 update), 2010). According to Castro (2013), the plan for DRGs initially was to have a classification system that would keep track of the quality of care as well the services provided in a healthcare (p. 126). Sayles (2013) states that in the early 1980s, The Centers for Medicare and Medicaid (CMS) implemented a prospective payment system (PPS) for Medicare beneficiaries that were admitted to a healthcare facility requiring inpatient care, this PPS was known as the diagnosis related groups (DRGs) (p. 264). The DRG …show more content…

According to Castro (2013), initially there were 23 MDCs which represented the body system as well as a group for DRGs that corresponded with all of the MDCs and pre-MDC, for example disease and disorders of the digestive system (p.128). In an updated version of the DRG system the Human Immunodeficiency Virus Infections and Multiple Significant Trauma categories were added. The next part of the MDC group is divided into two groups known as medical and surgical (p. 128). The final level divides the DRGs into surgical and medical in the 25 MDC groups, for example, surgical procedures that were performed on the patients and medical diagnosis for when the patient was admitted (p.128). The title, geometric length of stay, arithmetic mean length of stay, relative weight, and ICD-10-CM code range that drive the DRG assignment are the component of each DRG version (Evolution of DRGs (2010 update), 2010). The principal diagnosis, surgical procedures, or diagnosis procedure combinations are to be included in the code range (p.128). The DRG system has been beneficial to healthcare facilities, but in 2008, the Centers for Medicare and Medicaid (CMS) introduced a new system called the Medicare Severity Diagnosis Related Groups …show more content…

In order for a healthcare facility to be reimbursed for more severe cases, a severity component needed to be added. Therefore the DRG system was changed to the MS-DRG system . According to Castro (2013), the MS-DRG system uses major complication/comorbidity (MCC) diagnosis codes and complication/comorbidity (CC) diagnosis codes to get a better number of sub classifications (p. 128). The CC list was updated, as it had lacked revision, each code was considered a CC or MCC in which the CC list became two separate lists for the MS-DRG. About 730 codes were removed from the list, but important codes were added such as acute disease, acute exacerbations of chronic conditions, and end-stage chronic disease (p.129). According to Sayles (2013), when assigning MS-DRGs, groupers are used to help coding and reimbursement staff to assist in proper payment for services provided, grupers are known as computer programs that assign patients to case-mix groups (p. 267). There is a four step process used to assign MS-DRGs for inpatients (Evolution of DRGs (2010 update), 2010). 1) Pre-MDC assignment, 2) Major Diagnostic Category Determination, 3) Medical and Surgical Determination, 4) Refinement (p.132). In order to calculate the MS-DRG payment, Medicare requires a four step process. This process includes Medicare Administrative Contractors that use grouper and pricer software to get

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