DRGs were created for this purpose. History DRGs were first developed at Yale University in for the purpose of grouping together patients with similar treatments and conditions for comparative studies. On October 1, , DRGs were adopted by Medicare as a basis of payment for inpatient hospital services in order to attempt to control hospital costs. Since then, the original DRG system has been changed and advanced by various companies and agencies and represents a rather generic term.
These days, we have various DRG systems in use — some proprietary and some a matter of public record — all of which group patients in different ways. Different DRG systems are used by different payers.
DRGs are based on codes. In effect, DRGs are codes made up of codes. These MDCs are based on the principal first diagnosis and, with a few exceptions, are based on body systems, such as the female reproductive system. Five MDCs are not based on body systems injuries, poison and toxic effect of drugs; burns; factors influencing health status V codes ; multiple significant trauma; and human immunodeficiency virus infection. Organ transplant cases are not assigned to MDCs, but are immediately classified based on procedure, rather than diagnosis.
Once a case has been assigned into an MDC with the exception of the transplant pre-MDCs , it is determined to be either medical or surgical. If there are no procedure codes on the case e. But if the patient had a procedure, that procedure may or may not be considered surgical.
For example, an appendectomy is quite clearly a surgical procedure. But something like suturing a laceration is not. For the most part, anything requiring an operating room is surgical. Okay, so now that we have our MDC and a designation as medical or surgical, we need to look at the other diagnoses on the claim. Right now, Medicare is able to process the first 18 diagnoses on the claim. These other diagnoses, depending on their severity, may be designated as complications and comorbidities CCs or major complications and comorbidities MCCs.
CCs and MCCs are conditions that have been identified as significantly impacting hospital costs for treating patient with those conditions. However, patients with chronic systolic or diastolic heart failure do have slightly higher costs, so those conditions are CCs. For example, atherosclerotic heart disease with unstable angina is reported with two codes in ICD-9 one code for the atherosclerosis and one code for the unstable angina.
In ICD, this clinical concept is reported with a single code: I Examples of principal diagnoses that can serve as MCCs for themselves include:. Some code options that were available in ICD-9 are not included in ICD because the clinical distinctions are no longer commonly used.
It should be noted that code is not a CC and code In ICD both depressive disorder and major depression are reported with the same code, F This code is not a CC. Another example is seen with coding malignant hypertension and unspecified hypertension.
In ICD-9, code In ICD, the same code, I10, is assigned for both unspecified hypertension and malignant hypertension. This decision was made because code Similarly, several new codes were added to ICD which further specify asthma based on clinical descriptors such as mild, moderate, severe, persistent, and intermittent.
All of the new codes for these more specific types of asthma which do not include exacerbation or status asthmaticus in the code titles are not designated as CCs because the ICDCM code A diagnosis-related group DRG is a patient classification system that standardizes prospective payment to hospitals and encourages cost containment initiatives. In general, a DRG payment covers all charges associated with an inpatient stay from the time of admission to discharge.
The DRG includes any services performed by an outside provider. DRGs categorize patients with respect to diagnosis, treatment and length of hospital stay. The assignment of a DRG depends on the following variables:. DRG payment is based on the care given to and resources used by a "typical" patient within the group.
When the cost of treating a specific patient is unusually high compared to a typical patient in the same DRG classification, the case is referred to as an outlier. Many facility contracts include provisions employing a different methodology of calculating payment in outlier situations.
When a facility contract includes a DRG outlier provision, outlier cases processed under the provisions are identified by an outlier threshold based on covered charges.
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