<P> In 2007, author Rick Mayes described DRGs as: </P> <P>... the single most influential postwar innovation in medical financing: Medicare's prospective payment system (PPS). Inexorably rising medical inflation and deep economic deterioration forced policymakers in the late 1970s to pursue radical reform of Medicare to keep the program from insolvency . Congress and the Reagan administration eventually turned to the one alternative reimbursement system that analysts and academics had studied more than any other and had even tested with apparent success in New Jersey: prospective payment with diagnosis - related groups (DRGs). Rather than simply reimbursing hospitals whatever costs they charged to treat Medicare patients, the new model paid hospitals a predetermined, set rate based on the patient's diagnosis . The most significant change in health policy since Medicare and Medicaid's passage in 1965 went virtually unnoticed by the general public . Nevertheless, the change was nothing short of revolutionary . For the first time, the federal government gained the upper hand in its financial relationship with the hospital industry . Medicare's new prospective payment system with DRGs triggered a shift in the balance of political and economic power between the providers of medical care (hospitals and physicians) and those who paid for it - power that providers had successfully accumulated for more than half a century . </P> <Table> <Tr> <Th> Name </Th> <Th> Version </Th> <Th> Start date </Th> <Th> Notes </Th> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 25 </Td> <Td> October 1, 2007 </Td> <Td> Group numbers resequenced, so that for instance "Ungroupable" is no longer 470 but is now 999 . To differentiate it, the newly resequenced DRG are now known as MS - DRG . <P> Before the introduction of version 25, many CMS DRG classifications were "paired" to reflect the presence of complications or comorbidities (CCs). A significant refinement of version 25 was to replace this pairing, in many instances, with a trifurcated design that created a tiered system of the absence of CCs, the presence of CCs, and a higher level of presence of Major CCs . As a result of this change, the historical list of diagnoses that qualified for membership on the CC list was substantially redefined and replaced with a new standard CC list and a new Major CC list . </P> <P> Another planning refinement was not to number the DRGs in strict numerical sequence as compared with the prior versions . In the past, newly created DRG classifications would be added to the end of the list . In version 25, there are gaps within the numbering system that will allow modifications over time, and also allow for new MS - DRGs in the same body system to be located more closely together in the numerical sequence . </P> </Td> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 26 </Td> <Td> October 1, 2008 </Td> <Td> One main change: implementation of Hospital Acquired Conditions (HAC). Certain conditions are no longer considered complications if they were not present on admission (POA), which will cause reduced reimbursement from Medicare for conditions apparently caused by the hospital . </Td> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 27 </Td> <Td> October 1, 2009 </Td> <Td> Changes involved are mainly related to Influenza A virus subtype H1N1 . </Td> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 31 </Td> <Td> October 1, 2013 </Td> <Td> </Td> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 32 </Td> <Td> October 1, 2014 </Td> <Td> </Td> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 33 </Td> <Td> October 1, 2015 </Td> <Td> Convert from ICD - 9 - CM to ICD - 10 - CM . </Td> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 34 </Td> <Td> October 1, 2016 </Td> <Td> Address ICD - 10 replication issues introduced in Grouper 33 . As of March 2017 NTIS.gov no longer lists MS - DRG software, and Grouper 34 can now be directly downloaded from CMS . Version 34 was revised twice to address replication issues, making the final release for fiscal year 2017 version 34 R3 . </Td> </Tr> <Tr> <Td> MS - DRG </Td> <Td> 35 </Td> <Td> October 1, 2017 </Td> <Td> MS - DRGs 984 through 986 deleted and reassigned to 987 through 989 . Diagnosis codes relating to swallowing eye drops moved from DRGs 124 - 125 (Other Disorders of the Eye) to 917 - 918 (Poisoning and Toxic Effects of Drugs). Grouper 34 issue addressed relating to the 7th character of prosthetic / implant diagnosis codes in the T85. 8 - series indicating "initial encounter", "subsequent encounter" and "sequel". Numerous other changes. ". </Td> </Tr> </Table> <Tr> <Th> Name </Th> <Th> Version </Th> <Th> Start date </Th> <Th> Notes </Th> </Tr>

Diagnosis related group (drg) payment method