MS-DRG

Last updated: 05-21-2025

Column	Data Type	Description

Download CSV

What is MS-DRG?

MS-DRG stands for Medicare Severity Diagnosis Related Groups. It is a classification system used by the Centers for Medicare & Medicaid Services (CMS) to categorize hospital inpatient stays into groups that are expected to have similar hospital resource use.

MS-DRGs are the foundation of the Inpatient Prospective Payment System (IPPS) used by Medicare for reimbursing acute care hospitals.

Who Created MS-DRG?

MS-DRGs were developed by the Centers for Medicare & Medicaid Services (CMS), based on the original DRG system co-developed by Yale University and CMS in the 1980s. The MS-DRG system was introduced in FY 2008 to better reflect severity and complexity of modern inpatient care.

MS-DRG assignment depends on diagnosis and procedure codes:

ICD-10-CM diagnosis codes determine the principal diagnosis, secondary diagnoses, and comorbidities/complications.
ICD-10-PCS procedure codes capture surgical and non-surgical interventions.

These codes, along with patient demographics (e.g., discharge status, age, sex), flow through a CMS-designed grouper logic to assign a single MS-DRG to each inpatient claim.

On what kind of claims are MS-DRG Codes found?

MS-DRG codes are found on institutional inpatient claims—specifically, UB-04 forms (or their electronic equivalent) submitted by acute care hospitals for Medicare Part A beneficiaries.

These claims typically cover:

Room and board
Ancillary services
Nursing care
Procedures performed during the inpatient stay

Each MS-DRG has an associated relative weight, which reflects the expected costliness of the average case in that group relative to other groups.

CMS assigns payment rates based on the MS-DRG weight, adjusted by local wage indices, teaching status, hospital type, and outlier criteria.
MS-DRGs thus play a direct role in determining Medicare reimbursement for hospital stays.

What to know about MS-DRG Versions?

CMS updates the MS-DRG definitions annually, usually in the IPPS Final Rule released each August.
Each version incorporates code changes, grouper logic updates, and new clinical insights.
The first MS-DRG version was v25, released in 2008.
As of FY 2025, the current version is MS-DRG v42 (effective October 1, 2024).

Code Structure

MS-DRG codes are three-digit numeric codes, ranging from 001 to 999.

Each code corresponds to a clinically coherent group of diagnoses and/or procedures.
Codes are grouped into Major Diagnostic Categories (MDCs) by organ system or medical specialty.

Examples:

064: Intracranial hemorrhage or cerebral infarction with MCC
470: Major joint replacement or reattachment of lower extremity without MCC

Notes for Analysts

MS-DRGs are only available for inpatient institutional claims—they won’t appear on professional or outpatient claims.
Use MS-DRGs in conjunction with discharge date to apply the correct version year.
Be aware that DRG assignment can vary between software implementations or payer-customized versions.
For longitudinal analyses, normalize across DRG versions or use CMS-provided crosswalks.

When MS-DRGs May Be Missing from Inpatient Claims

There are valid scenarios where an inpatient claim does not have an MS-DRG assigned, including:

Hospital Exempt from IPPS:
- Critical Access Hospitals (CAHs)
- Inpatient Psychiatric Facilities (IPFs)
- Inpatient Rehabilitation Facilities (IRFs)
- Long-Term Care Hospitals (LTCHs)
- Children’s and cancer hospitals
Payer Does Not Use MS-DRG:
- Medicaid, commercial plans, and other non-Medicare payers may use APR-DRGs or their own classification systems
Claim Status Issues:
- Claims still in processing or rejected/denied may lack a DRG assignment
- Invalid or mismatched diagnosis/procedure coding may prevent grouping
Misclassified Observation Stays:
- Short stays may be submitted as inpatient but not grouped into MS-DRGs if the payer treats them as observation

Tip: To ensure you’re working with DRG-eligible claims:

Filter for Medicare Part A
Require Type of Bill = 11X
Ensure valid ICD-10-CM and ICD-10-PCS codes are present

Key Use Cases for MS-DRG Codes

Reimbursement modeling for Medicare inpatient care
Hospital performance analysis and benchmarking
Risk adjustment in cost and outcome studies
Case mix analysis to evaluate patient acuity
Clinical quality reporting and utilization review

Tuva Seed File Update Process

Note: This is the maintenance process used by Tuva to maintain the current codeset in the Tuva package. Tuva users do not need to complete this step unless they are leveraging a different version of codes or are no longer updating to the current version of the project, but need an updated terminology set.

CMS releases a list of MS-DRG codes twice a year effective April 1 and October 1. This list only contains valid codes and omits any that have been deprecated. Tuva maintains these deprecated code so historical data can be analyzed.

Navigate to the CMS MS DRG website
Under the section "MS-DRG Definitions Manual and Software", click on "V42 Definitions Manual Table of Contents - Full Titles - HTML Version"
- The version (e.g. V42) will change with each new release.
Click on the hyperlink "Appendix A List of MS-DRGs Version 42.1"
Click on the hyperlink "List of MS-DRGs Version 42.1"
Copy and paste the list of MS-DRGs into any text editor and save it as a text file.
Format the file
- Remove the text "MDC" from column 2
- Wrap the description in column 4 with double quotes so commas are interpreted correctly

Note: you can use the below script to format the file as said in number 6.

import pandas as pd

def main():
    input_filename = "your text file path"
    output_filename = "output csv file path"  
    
    with open(input_filename, 'r') as f:
        lines = f.readlines()

    rows = []
    for line in lines:
        line = line.strip() 
        if line:  # ignore empty lines
            parts = line.split(",", 3)  # split only at the first 3 commas
            rows.append(parts)
    
    df = pd.DataFrame(rows, columns=["Code", "Group", "Type", "Description"])

    print(df.head())

    # Clean the Group column (remove 'MDC ' if exists)
    df["Group"] = df["Group"].str.replace("MDC ", "", regex=False).str.strip()

    df.to_csv(output_filename, index=False, header=True)

if __name__ == "__main__":
    main()

Save the file
Import the csv file into any data warehouse that also has the previous version of MS-DRG loaded
Use the SQL below to populate the deprecated and deprecated_date columns. The script does the following:
1. Compares the old file with the new file to determine if codes have been deprecated. If they have been, set the column "deprecated" to 1 and "deprecated_date" to the date the newest codes were published (i.e. the beginning of the current fiscal year)
2. UNIONs the list of deprecated codes with new valid codes
3. Cleans up any formatting issues with the output and creates a table.

-- create table from the output of the script
create table [ms_drg_new] as

-- compare the old codes with the new codes and only return codes that are missing
with depreacted_ms_drg_codes as(
  select
      old.ms_drg_code
      , old.mdc_code
      , old.medical_surgical
      , old.ms_drg_description
      , 1 as deprecated
      , case when deprecated = 0 then '2023-10-01'
          else deprecated_date
    end as deprecated_date
  from [previous_ms_drg_codes] old
  left join [current_ms_drg_codes] new
      on old.ms_drg_code = new.ms_drg_code
  where new.ms_drg_code is null
)

-- union valid codes and depreacted codes together
, union_all_codes as(
select 
  ms_drg_code
  , mdc_code
  , medical_surgical
  , 0 as deprecated
  , null as deprecated_date 
from [current_ms_drg_codes]
where ms_drg_code not in (select ms_drg_code from depreacted_ms_drg_codes)

union all

select
   ms_drg_code
  , mdc_code
  , medical_surgical
  , deprecated
  , deprecated_date
from depreacted_ms_drg_codes
  
)

-- clean up formatting as necessary
select
    trim(ms_drg_code) as ms_drg_code
    , nullif(trim(mdc_code),'') as mdc_code
    , trim(medical_surgical) as medical_surgical
    , trim(ms_drg_description) as ms_drg_description
    , trim(deprecated) as deprecated
    , trim(deprecated_date) as deprecated_date
from union_all_codes

Upload the newly created code list into S3 (credentials with write permissions to the S3 bucket are required)

-- example code for Snowflake
copy into s3://tuva-public-resources/terminology/ms_drg.csv
from [table_created_in_step_9]
file_format = (type = csv field_optionally_enclosed_by = '"')
storage_integration = [integration_with_s3_write_permissions]
OVERWRITE = TRUE;

Create a branch in docs. Update the last_updated column with the current date (above).
Submit a pull request

The below steps are only required if the headers of the file need to be changed. The Tuva Project does not store the contents of the ms-drg file in GitHub.

Create a branch in The Tuva Project
Alter the headers as needed in MS-DRG file
Submit a pull request

What is MS-DRG?​

Who Created MS-DRG?​

How are MS-DRG Codes related to ICD-10-CM and ICD-10-PCS codes?​

On what kind of claims are MS-DRG Codes found?​

How are MS-DRG Codes related to cost?​

What to know about MS-DRG Versions?​

Code Structure​

Notes for Analysts​

When MS-DRGs May Be Missing from Inpatient Claims​

Key Use Cases for MS-DRG Codes​

Tuva Seed File Update Process​