severity. MS-DRG enables medicare and medicaid to increase the reimbursement it provides to hospitals treating very severely ill patients. (value, n.d.)How are DRGs or MS-DRGs developed and calculated? What are the components of each?The MS-DRG is a more precise diagnosis of a higher reimbursement then the DRG's. DRG's are more focused on the inpatient stays. These patients are grouped into separate groups and they are reimbursedbased on the group that they are in. These are calculated from the patient’s primary reason for the stay. What are the pros and cons associated with the DRG system?DRG's can help reduce the length of a hospital stays. This system is encouraged hospitals to be more efficient in treating patients but lessens the possibility in over treating patients. The longer a patient is hospitalized then the less money they will earn. There is an increased risk of discharging the patients before they are well enough to go home. This can lead to missed diagnosis by trying to cut corners and could put the patient in harm’s way medically or could really affect the patients care. How can the DRG affect the hospitals business plan for future growth? Think about how this information would serve you in planning as a manager of a billing department.DRG's are a fixed reimbursement payment system. When the hospital has a fixed income with a DRG then they can plan ahead and set budgets. As a manager in a billing department i would try to have a fixed budget to be able to calculate expenses for the hospital. This will help with knowing where you would need to cut back and possible areas needing improvement such as equipment necessity in other departments or finding more providers for different departments.
References:Diagnosis Related Group. (July 13, 2018). Retrieved from: Value Healthcare Services (n.d.). What is Medicare Severity-Diagnosis Related Group (MS-DRG)? Retrieved from: In- Text Citations: (DRG, 2018) (value, n.d.)