Two Different DRG Systems
While MS-DRGs are the classification system used for Medicare inpatient reimbursement, All Patient Refined DRGs (APR-DRGs) are widely used by state Medicaid programs and for internal quality and severity benchmarking, including many all-payer analyses. RHIA candidates should understand the structural differences between the two.
MS-DRG Structure
MS-DRGs generally use a three-tier severity structure for a given base DRG: without CC/MCC, with CC, and with MCC. This structure was designed specifically to better differentiate resource use among the Medicare population, which skews toward older adults with higher comorbidity burden.
APR-DRG Structure
APR-DRGs assign two separate four-level subclasses to every base DRG: a Severity of Illness (SOI) subclass and a Risk of Mortality (ROM) subclass, each ranging from 1 (minor) to 4 (extreme). This dual-axis structure captures both how sick a patient is and how likely they are to die, which is particularly useful for pediatric and obstetric populations underrepresented in the Medicare-focused MS-DRG system.
Key Differences
- MS-DRGs use a single severity tier per base DRG; APR-DRGs use two independent four-level subclasses
- MS-DRGs were designed primarily for the Medicare population; APR-DRGs are designed to work across all patient populations, including pediatric and maternity patients
- APR-DRGs are commonly used for quality benchmarking and risk-adjusted outcome reporting; MS-DRGs are used primarily for Medicare payment
Practical Applications
- State Medicaid agencies often use APR-DRGs for inpatient reimbursement given their broader applicability to non-Medicare populations
- Hospitals use APR-DRG SOI and ROM subclasses internally to risk-adjust mortality and complication rates for quality reporting
- Coding accuracy requirements are similar across both systems, since both rely on complete and specific diagnosis and procedure coding
Exam Tip
Be able to explain why APR-DRGs use two subclasses (SOI and ROM) rather than the three-tier CC/MCC structure of MS-DRGs, and identify which system a given payer or use case would likely apply.