Diagnosis-Related Group (DRG) Definition

A Diagnosis-Related Group (DRG) is a classification system used in healthcare to categorize patients with similar clinical conditions who require similar hospital resources. Each DRG is assigned a payment weight based on the average resources required to treat patients within that group. Medicare and some other insurance providers use DRGs to determine how much to reimburse hospitals for inpatient services.

DRGs are primarily used for hospital reimbursement purposes and help standardize payment rates for different medical conditions and procedures. Healthcare providers use DRGs to manage costs, allocate resources efficiently, and analyze patterns in patient care and outcomes. Understanding DRGs is essential for hospitals to optimize reimbursement strategies and provide cost-effective care while maintaining quality standards.