Hospitals Information

What is the difference between DRGs, AP-DRGs, and APR-DRGs?

DRGs measures case mix for inpatient admissions. One question is how to define a more severe case.  Six dimensions along which case mix could be measured include:

  • Severity of Illness. Extent of physiologic decompensation or organ system loss of function.
  • Risk of Mortality. Likelihood of dying.
  • Prognosis. Probable outcome of an illness including the likelihood of improvement or deterioration in the severity of the illness, the likelihood for recurrence, and the probable life span.
  • Treatment Difficulty. Patient management problems which a particular illness presents to the health care provider. Such management problems are associated with illnesses without a clear pattern of symptoms, illnesses requiring sophisticated and technically difficult procedures, and illnesses requiring close monitoring and supervision.
  • Need for Intervention. Consequences in terms of severity of illness that lack of immediate or continuing care would produce.
  • Resource Intensity. The relative volume and types of diagnostic, therapeutic, and bed services used in the management of a particular illness.

3M developed Diagnosis Related Groups (DRGs) to measures resource intensity of inpatient stays.  Today, I provide an overview of DRGs, as well as AP-DRGs and APR-DRGs.

History of DRGs

“The design and development of the DRGs began in the late sixties at Yale University. The initial motivation for developing the DRGs was to create an effective framework for monitoring the quality

of care and the utilization of services in a hospital setting…The process of forming the original DRGs was begun by dividing all possible principal diagnoses into 23 mutually exclusive principal diagnosis categories referred to as Major Diagnostic Categories (MDCs).”

These MDCs were divided up based on whether the patient had surgery or not.  For those with surgery, the DRGs were divided into major or minor surgeries, other surgeries, or surgeries unrelated to principal diagnosis.  For non-surgical admissions, the DRG logic first identified whether the patient had a neoplasm (tumor) then divided up the DRGs within and MDC based on the specific conditions related to the organ system and/or patient symptoms.  For example, the medical groups for the Respiratory System MDC are pulmonary embolism, infections, neoplasms, chest trauma, pleural effusion, pulmonary edema and respiratory failure, chronic obstructive pulmonary disease, simple pneumonia, RSV pneumonia and whooping cough, interstitial lung disease, pneumothorax, bronchitis and asthma, respiratory symptoms and other respiratory diagnoses.  In both medical and surgical groupings, there is an “other” category for the residual surgeries/admissions.

Although diagnosis is the principal factored used to define a DRG, other factors include a patient’s age (e.g., less than 18 years old) and discharge status.  For instance, separate DRGs were formed for burn patients and newborns if the patients were transferred to another acute care facility.

The first large-scale application of the DRGs was in the late seventies in the State of New Jersey. The New Jersey State Department of Health used DRGs as the basis of a prospective payment system in which hospitals were reimbursed a fixed DRG specific amount for each patient treated. In 1982, the Tax Equity and Fiscal Responsibility Act modified the Section 223 Medicare hospital reimbursement limits to include a case mix adjustment based on DRGs. In 1983 Congress amended the Social Security Act to include a national DRG-based hospital prospective payment system for all Medicare patients”

DRGs vs. AP-DRGs vs. APR-DRGs: An Overview

There are currently three major versions of the DRG in use: basic DRGs, All Patient DRGs, and All Patient Refined DRGs. DRGs are used by Medicare and measure the typical resource use of an inpatient stay. AP-DRGs are similar to DRGs, but also include a more detailed DRG breakdown for non-Medicare patients, particularly newborns and children. The APR-DRG structure is similar to the AP-DRG, but also measures severity of illness and risk of mortality in addition to resource utilization. Additional details are below.

DRGs vs. AP-DRGs vs. APR-DRGs: More Details

The basic DRGs are used by the Centers for Medicare and Medicaid Services (CMS) for hospital payment for Medicare beneficiaries.  DRGs also include complications and comorbidities (CC).  For medical DRGs, the CC can be i) minor or non-CC, ii) moderate or major CC, and iii) catastrophic CC.

In 1987, the state of New York passed legislation instituting a DRG-based prospective payment system for all non-Medicare patients. The legislation included a requirement that the New York State Department of Health (NYDH) evaluate the applicability of the DRGs to a non-Medicare population.  The All Patient DRGs (AP-DRGs) are an expansion of the basic DRGs to be more representative of non-Medicare populations such as pediatric patients.  The National Association of Children’s Hospitals and Related Institutions (NACHRI) examined applying the DRG system to neonates and other pediatric patients. The system NACHRI developed is called the Pediatric Modified Diagnosis Related Groups (PM-DRGs) and is incorporated in the AP-DRG system.

The All Patient Refined DRGs (APR-DRG) incorporate severity of illness subclasses into the AP-DRGs.  The APR-DRGs expand the basic DRG structure by adding four subclasses to each DRG. The addition of the four subclasses addresses patient differences relating to severity of illness and risk of mortality.  The four severity of illness subclasses and the four risk of mortality subclasses are numbered sequentially from 1 to 4 indicating respectively, minor, moderate, major, or extreme severity of illness or risk of mortality.

Illness severity of secondary diagnosis occurs through three steps: i) eliminating secondary diagnoses associated with principal diagnosis, ii) assisnging each secondary diagnosis its standard severity of illness level, iii) modifying the severity of illness level based on age, APR-DRG and primary diagnosis, or Non-OR procedure.


There are five DRGs for patients whose medical record abstracts contain clinically atypical or invalid information.

  • DRG 468 Extensive O.R. Procedure Unrelated to the Principal Diagnosis
  • DRG 476 Prostatic O.R. Procedure Unrelated to the Principal Diagnosis
  • DRG 477 Non-Extensive O.R. Procedure Unrelated to the Principal Diagnosis
  • DRG 469 Principal Diagnosis Invalid as Discharge Diagnosis
  • DRG 470 Ungroupable


Richard F. Averill; Norbert Goldfield, M.D.; Jack S. Hughes, M.D.; Janice Bonazelli; Elizabeth C. McCullough; Barbara A. Steinbeck; Robert Mullin, M.D.; Ana M. Tang, John Muldoon; Lisa Turner; James Gay, M.D. All Patient Refined Diagnosis Related Groups (APR-DRGs) Version 20.0: Methodology Overview, 3M Health Information Systems, National Association of Children’s Hospitals and Related Institutions, Inc.; Medical Advisory Committee for NACHRI APR-DRG Research Project. 2003.


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