As if the medical care system wasn’t hard enough to understand, DRG audits are an additional aspect of healthcare that confuses many people, if they even know they exist. However, this complication is unnecessary as audits tend to be fairly straightforward. This quick guide will help you navigate the relationship between your hospital bill and the audit process as performed by software and professionals with DRG auditor training.


What Is DRG Validation?

First, you must know that DRG stands for Diagnosis-Related Group and it is the system used to confirm information given by a beneficiary’s medical record, physician, and hospital about the beneficiary’s hospital stay. DRG validation is the process of matching up the different pieces of information to verify billing and reimbursement amounts. For every hospital visit, the hospital assigns a code related to the reason for the visit and the care given to the patient. The code determines the level at which the patient or their insurance will be billed. To complete a verification, coders use guidelines that have been established by the Centers for Medicare and Medicaid Services, or CMS.


Why Are Audits Necessary After Validation?

In theory, all patients receive the correct DRG the first time, especially since there are programs hospitals use to assign them. However, the reality is that the CMS still discovers an alarming number of errors that require adjustment. More than one-fifth of DRG assignments are incorrect, and the majority of these problems are caused by “up-coding” or assigning a billing code that is higher than is appropriate. Audits are performed to catch these mistakes and ensure that reimbursements are properly awarded.

Most audits are quick and simple, allowing recalculation of funds and billing with expedience. A DRG audit is nothing to fear and will usually work out in favor of the beneficiary.