I recently ran across a post asking "How do I code DRGs?". My initial thought was "I don't, the grouper does.", but as that is flatly unhelpful, let's take a look at DRGs.
A DRG is any one of 771 groups or sets of conditions/procedures requiring similar costs of care. The elements of these sets are the PDx, any secondary diagnoses, procedures, sex, age, and D/C disposition.
There is a formula for figuring it out. It is RW X HBR = the hospital's payment.
HBR stands for Hospital Base Rate. This varies by hospital and is reviewed every year. It is the basic running costs of the hospital split into labor and capital (non-people costs of running the place). This is determined by location, certain patient demographics, case-mix. For example, the hospital I work for had an HBR of $3K two years ago. This means that medicare set the average basic cost of serving an inpatient at 3K a day.
The RW is the Relative Weight. This is the determined by dividing the average cost of services for a particular DGR across the country by the average costs of all DRGs.
For example, if a chocolate bar costs $1.50, licorice is $1.00 and gum is $1.25, then the average cost of the candy DRG is $1.25. To determine the RW of gum, we divide it's cost by the candy DRG. Which gives use one dollar. Plug this RW and my employer's old HBR into the formula (RW x HBR = payment) we get 1.00 x 3000.00 = 3000.00. So Medicare would pay the hospital 3K to provide an inpatient a pack of gum. Which, by the calculator means the hospital lost a dollar.
The best way to locate a DRG is is to go to either here - https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-final-rule-home-page#rule
or here - https://www.icd10data.com/ICD10CM/DRG
But it's best to leave it to the grouper.*
* A grouper is a program built into the coding/billing software.
also a grouper:
