DRG (Diagnosis-Related Group)

Diagnosis-Related Groups (DRGs) are a way hospitals categorize patients based on their medical conditions and the treatments they need. This system groups similar cases together so that hospitals can be paid a fixed amount for each group, regardless of the actual costs incurred. DRGs help ensure efficient care, promote cost management, and simplify billing. They are used primarily by Medicare and other health insurance programs to determine reimbursement rates, encouraging hospitals to provide appropriate and cost-effective care for specific medical conditions.