Diagnosis-Related Group (DRG)
Diagnosis-Related Group (DRG) is a hospital inpatient classification system that groups patients into clinically similar categories with comparable resource use, used to determine Medicare and many commercial inpatient payments.
Definition.
Medicare Severity DRGs (MS-DRGs) classify every inpatient stay into one of approximately 750 categories based on principal diagnosis, secondary diagnoses, procedures, age, sex, and discharge status. Each MS-DRG carries a relative weight that, multiplied by the hospital's base payment rate, determines the inpatient payment.
Key points.
How DRG assignment works
Coders assign ICD-10-CM diagnosis codes, ICD-10-PCS procedure codes, and Major Diagnostic Category. The DRG grouper software then assigns the MS-DRG based on principal diagnosis, secondary diagnoses, procedures, and CC/MCC status.
CC and MCC
Complications and Comorbidities (CC) and Major Complications and Comorbidities (MCC) are secondary diagnoses that elevate the DRG to a higher-paying severity level. Accurate CC/MCC capture is the single biggest revenue lever in hospital inpatient coding.
DRG creep vs DRG accuracy
DRG creep refers to systematic over-coding to maximize payment. DRG accuracy is correctly coding what the documentation supports. The line between them matters because DRG audits (RAC, OIG, payer) target apparent creep.
CDI and DRG
Clinical Documentation Improvement (CDI) specialists query clinicians at the point of care to capture clinical reality in documentation that supports accurate DRG assignment. CDI without retrospective queries is preferred.
DRG validation audits
Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), and commercial payers audit DRG assignment retrospectively. Defensible documentation and clinical query process are the audit defense.