What are DRGs?

September 20, 2009 by admin

Diagnosis Related Groups (DRGs) are payment groups. Patients who have similar clinical characteristics and similar costs are assigned to a DRG. The DRG will be linked to a fixed payment amount based on the average cost of patients in the group. Patients are assigned to a DRG based on diagnosis, surgical procedures, age and other information. Hospitals provide this information on their bills and Medicare uses this information to decide how much the hospitals should be paid.