What's? Inpatient prospective payment system (IPPS) in USA

Under the IPPS, each case is categorized into a diagnosis-related group (DRG). Each DRG has a payment weight assigned to it, based on the average resources used to treat Medicare patients in that DRG.

Diagnosis-related groups (DRGs) are a system used by the Medicare program to categorize hospital inpatient stays into specific groups based on the patient's diagnosis, treatment, and expected resource use. The payment weight assigned to each DRG is determined by the average resources (such as hospital staff time, supplies, and equipment) used to treat Medicare patients with similar medical conditions.

Here are some examples of how the DRG system works:

Example 1: A patient is admitted to the hospital with pneumonia. The hospital staff diagnoses the patient and assigns them to DRG 190 (Simple Pneumonia and Pleurisy with MV 96 hours or less). This DRG has a payment weight of $5,000, which means that Medicare will pay the hospital an average of $5,000 for treating a patient with pneumonia.

Example 2: A patient is admitted to the hospital for a heart attack. The hospital staff diagnoses the patient and assigns them to DRG 291 (Acute Myocardial Infarction, Discharged Alive with MV 4 hours). This DRG has a payment weight of $9,000, which means that Medicare will pay the hospital an average of $9,000 for treating a patient with a heart attack.

The DRG system is used to determine how much Medicare will pay hospitals for inpatient stays. It ensures that hospitals are paid fairly for the resources they use to treat Medicare patients, while also controlling the cost of healthcare for Medicare beneficiaries.