All Patient Refined Diagnosis Related Groups (APR-DRG) Overview

The Department of Human Services Med-QUEST Division (MQD) proposes to change current methodology for inpatient acute services for the Hawaii Medicaid program.

Beginning with admission dates on July 1, 2022, inpatient hospital services delivered through fee for service and managed care will be paid using the All Patient Refined Diagnosis Related Groups (APR-DRGs) payment methodology instead of per diem.

APR-DRG is a patient classification system developed by 3M and used by payers and providers to classify hospital inpatient stays into clinically meaningful hospital groups. For example, the hospital gets paid the same rate for someone admitted to the hospital for a broken leg regardless of length of stay, until you hit the outlier threshold. This varies by condition.

This is the first time HMSA is implementing APR-DRGs:

• APR-DRGs are the most widely used DRG software or “grouper” by Medicaid agencies to determine payments for inpatient hospital services.
• Under the APR-DRG version 37.1 proposed by MQD, there are 1,320 APR-DRGs consisting of 330 base DRGs with four severity of illness levels each, plus two “ungroupable” DRGs.

For HMSA, Medicare and commercial lines of businesses currently use MS DRG (CMS). Other plans may or may not do the same.

FAQs [PDF] will be updated according to the Med-QUEST APR-DRG methodology. For more information on the State Plan Amendment proposed changes to the current payment methodology for inpatient acute services for Med-QUEST, go to medquest.hawaii.gov/en/about/state-plan-1115.html.

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