The Diagnosis-Related Group Analysis

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The diagnosis related group (DRGs) was created in the early 1970s at Yale University. The DRG method designates a numeric value to the inpatient hospital visit. This serves as a relative weighting factor that signifies the resource intensity of hospital care. The payment level the hospital will receive is based on the DRG assignment. There were four guidelines established for the DRG system’s foundation. The first guideline states the patient data used in the DRG definition should only be information normally gathered on the hospital billing form. The second guideline states that there should be a controllable number of DRGs that include all patients seen on an inpatient basis. The third guideline states each DRG should be comprised of patients…show more content…
(“Department of Health and Human Services,” p. 49326). The Hospital Readmissions Reduction Program calls for a decrease to a hospital’s base operating DRG payment to account for additional readmissions of certain applicable conditions. For FYs 2013 and 2014, these applicable conditions are acute myocardial infarction, heart failure, and pneumonia. For FY 2014, CMS also created extra readmissions measures, chronic obstructive pulmonary disease (COPD), and total hip arthroplasty and total knee arthroplasty (THA/TKA), to be used in the Hospital Readmissions Reduction Program for FY 2015 and future years. CMS are completing a revised version of the extended pneumonia group from what they had indicated in the FY 2016 IPPS/LTCH PPS planned rule such that the revised version includes patients with a principle discharge diagnosis of pneumonia or aspiration pneumonia, and patients with a principal discharge diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission (“Department of Health and Human Services,” pp.…show more content…
Under the Act, disproportionate share hospital payments to hospitals are lowered and an added payment for unpaid care is made to qualified hospitals starting in FY 2014. For FY 2016, CMS are arranging that the 75 percent of what would have been compensated for Medicare DSH had been changed to roughly 63.69 percent of the amount to mirror changes in the percentage of individuals that are uninsured and further legal changes. CMS project that Medicare DSH payments and added payments for unpaid care made for FY 2016 will lower payments overall by roughly 1 percent as contrasted to the Medicare DSH payments and uncompensated care payments distributed in FY 2015. (“Department of Health and Human Services,” pp.

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