What Is Medicare DRG? 
Section 1886 of the Social security system classifies `` Diagnosis Related Group '' and each group has a classification for reimbursement which is related to Acute Patient treatment . The base payment rate is divided into a labor related and non-labor share . If the hs = ospital treats a high percentage of low income families it receives a perecentage add on payment applied to the DRG adjusted base rate . If the hospital is an approved teaching hospital it receives a perecentage add on payment for each case paid . 