HIM FORUM 3 1
Diagnosis-Related Groups (DRGs) are used to classify inpatients intodifferent clusters and hence facilitate payment (Quinn, 2014).Notably, the system divides possible ailments into over 20 major bodyorgans. Subsequently, subdivisions are made into 500 groups to makeit easier for Medicare to provide reimbursements (Quinn, 2014). Thepayments made through the DRG are determined by the type ofdiagnosis. Besides, the statistical system considers the hospitalfacilities and resources required to treat a particular condition.The patient’s DRG group also determines the fixed rates at whichhospitals receive payments (Quinn, 2014). DRG classifications havemade it easier for Medicare to reimburse both healthcare centers andthe patients.
The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) wasestablished to protect the economy from imminent implosion. Notably,TEFRA established the DRG coding system to facilitate faster payments(Quinn, 2014). The legislation also allows children with disabilitiesto benefit from medical assistance regardless of the parents’wealth. In addition, TEFRA established the measures to be followedwhen making payments for hospice care.
Major Diagnostic Categories (MDCs) occur after the division of allprincipal diagnoses into 25 different segments. On the other hand,DRGs could be grouped to form MDCs (Quinn, 2014). Furthermore, thediagnosis obtained in each MDC is associated with single organsystems and specific medical specialties. However, DRGs are used toclassify patient cases into multiple groups (Quinn, 2014). MDCs areused to represent various body systems while DRGs are utilized in ahierarchical setup.
The decision tree is implemented to determine the party responsiblefor paying for an insurance claim. Medicare can either be the primaryor secondary financier when an adverse event occurs (Quinn, 2014).Therefore, the decision tree utilizes several questions designed toinvestigate the facts of the case and make a final determination.
Indeed, the DRG statistical system has made it more efficient forMedicare to submit reimbursements to institutions and individuals.Patients are classified into groups depending on the nature of theunderlying medical problem. Hence, regular payments can be made tohealthcare institutions.
Quinn, K. (2014). After the revolution: DRGs at age 30. Annals ofInternal Medicine, 160(6), 426-429.