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One of the most sophisticated reimbursement models in the United States involves hierarchical logic for grouping a coded health record into a designated payment group based upon the Medicare Severity Diagnosis Related Group (MS-DRG).

This is the basis of payment used in the Medicare Inpatient Prospective Payment System (IPPS). The undertaking by the Centers for Medicare & Medicaid Services (CMS) to switch from ICD-9 to ICD-10 is a significant project, and the preliminary results have been described by CMS as having achieved a goal of “payment neutrality” between the two classification systems. 

Based on my experience with various ICD-10 recoding projects, the concept of payment neutrality between ICD-9 and ICD-10 seems legitimate. It is not simply because all cases are grouped into the same ICD-10 MS-DRG as in ICD-9, but because some cases tend to fall into higher-weighted MS-DRGs and some cases fall into lower-weighted MS-DRGs (which, for the most part, balance each other out).


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