DRGs and the Future of Surgical Practice

Abstract

DIAGNOSIS-related groups (DRGs) have been used as the basis for prospective payment to hospitals under Medicare since October 1983.1 The grouping method uses diagnoses and surgical procedures to classify every hospital discharge in 1 of 467 DRGs.2 , 3 Each DRG is assigned a weight that is then converted to a price. The use of surgical procedures to price hospital care makes surgical practice particularly vulnerable to any untoward effects of the new pricing mechanism.DRG-based payments provide the Health Care Financing Administration (HCFA) with a simple, easily enforceable mechanism to prevent payment for surgical procedures considered experimental or otherwise undesirable. DRG . . .