Comparative Performance of the MS-DRGS and RDRGS in Explaining Variation in Cost for Medicare Hospital Discharges

by Barbara O. Wynn

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Health Systems Consultants, Inc. asked RAND to assess the comparative ability of two severity-adjusted patient classification systems to explain variation in Medicare costs per discharge. The two systems evaluated in the study are the Medicare-severity adjusted DRG (MS-DRG) system that Medicare adopted effective October 1, 2007 and Health System Consultants, Inc.'s Refined-DRGs (RDRGs), version 21.0/24.0. The results should be of interest to parties who use a classification system to assign hospital inpatients to groupings based on expected resource needs.

The research in this report was prepared for Health Systems Consultants, Inc. and conducted by RAND Health.

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