Diagnostic related groups (DRGs) are inpatient classification schemes that categorize patients who share similar clinical characteristics and costs. A DRG is based on the ICD-10 codes on the hospital billing claim. Several DRG systems have been developed, each with its own characteristics and methodology. Two widely-used DRG systems are MS-DRGs (Medicare Severity)—used by Medicare and many commercial payers, and APR-DRGs (All Patient Refined)—used by many state Medicaid programs.   Each year, every DRG is assigned a unique fixed value (called “relative weight”) applicable to all hospitals and used in calculating the reimbursement for all services provided during an inpatient admission. A hospital-specific reimbursement rate is assigned to each hospital based on its costs associated with its particular patient population. The DRG payment is calculated by multiplying the relative weight for the DRG by the hospital’s reimbursement rate. Example:  MS-DRG 293 – Heart Failure Relative Weight (RW) 0.653 X Hospital Blended Rate $6,000 = MS-DRG Payment $3,932