Hospitals May Benefit from New MS-DRGs

Hospitals that correctly prepare for MS-DRGs may realize substantial benefits, according to an article that quotes our very own Dean Farley. Highlights of the article include:

MS-DRGs offer two significant advantages to hospitals

1. The system will do a much better job of allocating Medicare dollars to care areas where the industry needs them; and
2. The proposal creates strong incentives to improve the accuracy and completeness of coding.

Hospitals Need to Prepare

While it is unlikely that hospitals will have to make major changes to their computer systems, HIM departments will need to address software commands that are based directly on old DRG numbers. For example, Dean explained that DRG 470 currently represents an “ungroupable” service that does not get reimbursed; many software programs are designed to automatically ignore claims bearing the DRG 470 code. Under the proposed MS-DRG, code 470 represents “major joint replacement or reattachment of lower extremity without MCC.” The “ungroupable” DRG is now 999.

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