DRG Coding

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DRG Coding

Hospitals are paid a fixed price by Diagnosis Related Groups (DRG) for treating Medicare patients. These groupings are based on diagnoses, procedures, other demographic information, and the presence of complications or co-morbidities. DRG coding can be more challenging for healthcare providers as it encompasses many records rather than just a specific visit note or operation note. Outsource Strategies International (OSI), an experienced medical coding company based in the U.S, provides customized coding solutions based on our clients’ unique needs.

Payment by these codes encourages access to care, rewards efficiency, improves transparency, simplifies the payment process, and encourages administrative efficiency.

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Appropriate DRG Code Assignment

MS-DRG system classifies hospital inpatient cases based on the patient’s diagnoses and the procedures required to treat the patient’s condition. Classified into 25 major diagnostic categories (MDCs) based on organ system, these codes serve purposes such as:

  • Determine the hospital’s reimbursement based on severity of illness
  • Evaluate the utilization of services
  • Evaluate the quality of care provided

Annually, new ICD-9-CM codes are also incorporated into existing and new diagnostic related group codes added for that fiscal year. When assigning codes for an inpatient case, a present on admission (POA) indicator must also be recorded.

The following elements are assigned to each payment group –

  • Geometric mean length of stay (GMLOS) – a value used to calculate reimbursement
  • Arithmetic mean length of stay (AMLOS) – a value assigned to represent the average
  • Relative Weight (RW) – a value used to calculate total payment for the case. DRG groups with higher relative weights are paid more than those with lower relative weights.

Our Strength – Experienced AAPC Certified Inpatient Coders

Following the guidelines for inpatient coding, our experienced coding professionals with formal coding training assign accurate Medical Severity Diagnostic Related Group codes based on the principal and secondary diagnoses, procedure, discharge status, age and sex that describe the patient’s conditions, complications and co-morbidities. They strive to achieve optimal performance while maintaining compliance, abiding by ethical guidelines and approved coding guidelines.

Our coders are also trained in maintaining these coding assignments with ICD-10 codes, implemented on October 1, 2015. We abide by the standards of Ethical Coding as set forth by AHIMA and CMS.

Further Benefits with Our Customized Services

  • Reduced risk of denials and allegations of false claims
  • Streamlined coding operations
  • Increased cash flow
  • Competitive pricing
  • Customized turnaround time
  • State-of-the-art technology

To find out more about our competitively priced DRG coding services, send an email to info@managedoutsource.com.

Outsourcing your medical billing to OSI can save you up to 40% on your operational costs.

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To learn more about our medical billing and coding services or to discuss your requirements with our Solutions Manager.


Tamara Hernandez
Tamara Hernandez
The Insurance Verification and Prior Authorization service is a God send in our busy Cardiology Practice. The team is always professional, kind and attentive. I would definitely recommend OSI to anyone!
Eldon Peters
Eldon Peters
Top notch service. Easy to work with. Fast, reliable, excellent from top to bottom. Strongest recommendation possible!
Dr. Millicent Brown
Dr. Millicent Brown
I've had a very good experience with the insurance verification service. I am planning to use other offered services because they are easy to work with and provide great communication.
Andrew Brian
Andrew Brian
An Exceptional Medical Billing Company I am an orthopedic surgeon and was looking forward to outsourcing the billing task to a trusted orthopedic medical billing company. I chose OSI taking into account its good track record. I would rate it as an exceptional medical billing company. The staff is knowledgeable, well-mannered, and has always been prompt in addressing my concerns. My practice revenue has improved considerably since my tie-up with this company. I would gladly recommend OSI to anyone looking to outsource medical billing. Andrew Paul
Joshua Samuel
Joshua Samuel
The Best Business Decision I Ever Made!!! I was really frustrated trying to balance patient care and medical billing responsibility. One of my friends who had a good experience with OSI suggested medical billing outsourcing which was not even in my thoughts. I entrusted the medical billing job to OSI and it is the best business decision I have ever made in my career. Joshua Samuel

OSI Featured Experts

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    Loralee joined MOS’ Revenue Cycle Management Division in October 2021. She has over five years of experience in medical coding and Health Information Management practices.