MS-DRG

WHAT IS A DIAGNOSIS RELATED GROUP (DRG)?

A grouping of disease and disorders into medically meaningful sets as developed by the

Centers for Medicare & Medicaid Services (CMS).

This reimbursement system consists of established payment levels for groupings of

patients according to medically meaningful characteristics. There are six major criteria,

which are utilized in assigning a particular admission to a specific DRG. These consist

of:

- Patient's principal diagnosis

- Procedures performed on the patient

- Patient's age

- Patient's gender

- Patient's discharge status

- Multiple diagnoses, complications or comorbid conditions.

WHAT IS A MAXIMUM ALLOWABLE PAYMENT (MAP)?

The allowable amount payable for services provided to BCBSKS members. For hospital

inpatient claims, the allowable amount is typically based on a DRG assignment.

WHY MS-DRGs?

According to the 8/22/07 Final Rule (page 47142), CMS chose MS-DRGs over the other

DRG systems because:

- MS-DRGs remains an improvement over the current CMS DRGs;

- MS-DRGs are more up-to-date (in relation to the review of MCCs &

CCs);

- MS-DRGs are understandable;

- MS-DRGs are available in the public domain;

- MS-DRGs will have fewer transition issues than other systems; and

- MS-DRGs allow for updates and maintenance to continue using the same

process as under the current CMS DRGs.

Blue Cross and Blue Shield of Kansas (BCBSKS) has always utilized the standard

Medicare grouper for establishing the maximum allowable payment (MAP) for inpatient

claims. So, when Medicare decided to move towards the MS-DRGs, BCBSKS followed

and established their MAPs based on the MS-DRG (Version 25.0) grouper.

By choosing the MS-DRG grouper, BCBSKS is able to incorporate ICD-9-CM diagnosis

and procedure codes revisions into their payment structure.

WHAT IS A DRG GROUPER?

A DRG grouper is a computer program or module which takes the five clinical and

demographic data as input and gives a corresponding diagnosis related group (DRG) as

output.

The DRG grouper that was used in 2007 for the CMS DRGs was version 24.0. This

grouper categorizes ICD-9-CM diagnosis and procedure codes to CMS-DRGs.

The DRG grouper that is being used in 2008 for the MS-DRGs is version 25.0. This

grouper categorizes ICD-9-CM diagnosis and procedure codes to MS-DRGs. Beginning

10/1/08, BCBSKS will be using version 26.0.