Short Info: HCFA DRG (USA)

The HCFA-DRG system was the first one to be applied on a large scale. Since its first application in 1983 – with then 470 DRGs –, it was used by Medicare of United States as a basis for case-based reimbursement of hospital services (typically excluding the attending physician's fees).

The primary goal of the HCFA-DRG system was to reproduce the cost intensity of all inpatient treatments. However, since Medicare is an insurance provider for the elderly, the disease patterns considered were primarily those of the aged population segment.

As a balance, important elements of the APDRG system have been adapted and taken over into the HCFA-DRG since its 8th revision (1990/91).1 As a consequence, the HCFA-DRG system reveals a whole series of splits at the age of 17, which indicates that pediatric DRGs are also being considered. Thus, the HCFA-DRG system is, in principle, applicable as patient classification system to all patients; the cost weights published by HCFA and later by its successor CMS, however, relate to the elderly patients insured by Medicare.

The term "Diagnosis Related Groups" named the principle according to which a case is initially assigned to a Major Diagnostic Category (MDC) on the basis of the principal diagnosis. In the 8th version from 1991 of the HCFA-DRG system, though, "Pre-MDC" as a new Major Diagnostic Category was established to accommodate hospital stays primarily in a procedure-based approach. Thus, for instance, liver transplants and bone marrow transplants received their own DRGs, attributed independently of the principal diagnosis.

In 2001, the "Health Care Financing Administration" (HCFA) was renamed "Centers for Medicare and Medicaid Services" (CMS). Thus, the HCFA-DRG system accordingly became CMS-DRG system.

Since 2007/2008, the CMS-DRG system as Medicare's reimbursement system was replaced by the MSDRG system.