Medicine: Medical Services Reimbursement
DRGs is an acronym for Diagnosis Related Groups, which begun in the 1980s in New Jersey. They were developed for the Financing of Health Care Administration as a scheme to classify patients to provide a means of relating the cost a hospital incurs after treating a given type patients. Despite the fact that most patients’ exhibit uniqueness, a group of patients may have common therapeutic attributes, diagnostic, and demographic, which determine their treatment or resource needs. In both outpatient and inpatient setting, DRGs are used in hospital payment and discharge cases. The system establishes an effective Health care plan for payment and reimbursement of funds. Payment systems that are based on Diagnosis Related Groups encourage the hospitals to operate efficiently while ensuring that inpatients and outpatients pay a fixed rate per case, for services (Noralou & Freeman, 2010).
There are different types of DRGs that have been developed in America lately, they include, (CMSDRG and MS-DRG) Medicare DRG, Refined DRGs, International-Refined DRGs (IRDRGs), All Patients DRGs, All Patients Severity-Adjusted DRGs (APSDRG). The DRGs form the basis of a clinically, well managed coherent set of groups of patient relating to the hospital's resource demand for its cases and the experienced associated costs by the hospital (Outsource Strategies International, 2008).
The purpose of DRG use in medical coding and billing is to allow for effective and efficient payment of the specific service given to the patient. It also allows standardization of rates among producers and users and for international comparability. Both DGRs and ICD-9-CM are coding systems that are used to give reports on procedures and diagnoses performed to patients. They are both required by many third party payers and Medicare because the convey diagnosis for services rendered to the patients.
Noralou P. and Freeman J. L. (2010). Potential for Inpatient-Outpatient Substitution with Diagnosis-Related Groups. Retrieved from http://findarticles.com/p/articles/mi_m0795/is_n4_v10/ai_8134863/
Outsource Strategies International. (2008). Medical Billing and Medicare Diagnosis-Related Group (DRG). Retrieved from http://www.outsourcestrategies.com/blog/2008/02/medical-billing-and-medicare-diagnosis-related-group-drg.html