MS-DRG

also known as: Medicare Severity Diagnosis-Related Group · DRG

Medicare-Severity Diagnosis-Related Groups (MS-DRGs) are how Medicare pays acute-care hospitals for inpatient stays under the Inpatient Prospective Payment System (IPPS). Every discharge gets assigned exactly one MS-DRG based on principal and secondary diagnoses, procedures performed, age, sex, and discharge status. Each MS-DRG carries a payment weight; Medicare multiplies that weight by the hospital's standardized base rate (which itself reflects wage index, GME, DSH, and other adjustments) to produce the payment. There are roughly 770 MS-DRGs in the current classification. The highest-volume ones nationally are 871 (Sepsis without MV >96h with MCC), 291 (Heart Failure with MCC), 177 (Respiratory Infections), 193 (Pneumonia), and 690 (Kidney/UTI without MCC). DRG mix — the distribution of discharges across MS-DRGs — is a leading indicator of a hospital's clinical service profile. A hospital with high-volume cardiac DRGs is functionally a cardiac center; high-volume joint-replacement DRGs (DRG 470) signal orthopedic specialization.

DRG 470 (Major Hip/Knee Joint Replacement) is the highest-volume elective DRG nationally — ~400K discharges/year.

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