Diagnostic Related Groups

DRG’s are a statistical system of classifying any inpatient stay into groups for the purposes of payment. The DRG classification system divides possible diagnoses into more than 20 major body systems and subdivides them into almost 500 groups for the purpose of Medicare reimbursement. IN OTHER SIMPLE WORDS: under this plan, patients with certain diagnoses who are admitted to hospitals are classified in one payment group. A limit is placed on the cost of care, and the agency providing care receives this set amount.

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