Diagnostic Related Groups (DRG)

Diagnostic Related Groups (DRGs) are a classification system used by hospitals and insurers to categorize patients based on their medical condition, treatments, and resources needed. This system helps determine how much to pay for a patient’s care, encouraging hospitals to deliver efficient, cost-effective treatment. Essentially, patients with similar diagnoses and treatment requirements are grouped together, and the hospital receives a fixed payment for each group, regardless of the actual costs incurred. DRGs help streamline healthcare reimbursement, promote quality care, and control healthcare costs.