What does the acronym DRG stand for in healthcare?

The acronym DRG stands for Diagnosis-Related Group. This term is crucial in the healthcare system, particularly regarding hospital reimbursement policies. Diagnosis-Related Groups are used to classify hospital cases into specific categories based on the diagnosis and treatment provided. This classification helps determine payment amounts that healthcare providers will receive from insurers under the prospective payment system.

The DRG system allows for more predictable hospital billing and supports the management of healthcare costs by incentivizing hospitals to provide efficient care. When a patient is admitted to a hospital, their case is assigned a DRG based on their primary diagnosis and procedures performed, which then sets a fixed payment level that covers the entire hospital stay.

Understanding DRGs is fundamental for health information management professionals as they directly impact coding, billing, and reimbursement processes in healthcare organizations.