Find-A-Code Focus Newsletter

The APR-DRG Payment System for Hospitals

By Bonnie G. Schreck, BS, CCS, CPC, COC, CP
December 30, 2015

The All Patient Refined DRG (APR-DRG) Classification System is a payment system for hospitals commonly used throughout the United States in state public and commercial organizations for payment or quality reporting.  They are an expansion of the MS-DRG structure that includes four severity of illness (SOI) levels and four risk of mortality (ROM) levels within each DRG.  Patients are assigned to severity and morality subclasses according to clinical logic that evaluates co-morbidities, age, procedures, and principal diagnosis.  It is used in more than 30 states, including Medicaid agencies, for adjusting data for SOI and ROM.

This payment system takes into consideration many variables, such as affect how sick patients are, how quickly they will recover and how many resources are needed to effectively treat them.  It includes a comprehensive cross-section of patients seen in an acute care setting, things that are not necessarily covered in the Medicare MS-DRG payment system, which focuses on the Medicare population.  The ago of the patient plays a major role in severity leveling.  There are separate APR-DRGs for pediatric and adult problems.

Some of the benefits of using APR-DRGs are: documentation and coding improvement, outcomes/performance measurements, identifying prospective reimbursement and better payer negotiation for reimbursement that matches the complexity of case mix.

For examples on APR-DRGs from the State of New York, see:


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