How do MS-DRGs differ from basic DRGs in Medicare payments?

• A. MS-DRGs remove severity adjustments to simplify payments.
• B. MS-DRGs include modifiers for severity (e.g., MCC/CC) and produce refined payment weights reflecting resource use.
• C. MS-DRGs are only used for outpatient services.
• D. MS-DRGs replace DRGs with broader categories.

Answer: (B)

MS-DRGs extend the DRG system by incorporating how sick the patient is. They add severity-based qualifiers, such as major complications or comorbidities (MCC) and regular complications or comorbidities (CC), which splits each DRG into more granular groups. Each of these groups gets its own refined payment weight that reflects the expected resource use for that level of severity. In this way, inpatient Medicare payments better match the actual intensity and cost of care than basic DRGs, which do not differentiate by severity. These are used for inpatient hospital payments, not outpatient, and they refine rather than replace DRGs by adding severity levels.