Diagnostic Related Groups, or DRGs, are primarily used to determine reimbursement for inpatient stays. Every inpatient visit is placed into one DRG category based upon the patient’s primary diagnosis, procedures performed, and discharge status. Each DRG is given a weighted value above or below one that represents the relative time and resources required to effectively care for the average patient with a specific diagnosis until discharge. This value is multiplied by a preset dollar amount unique to each hospital that reflects its individual status (teaching hospitals have higher reimbursements, for example) and service area demographics (such as average local wage levels) to find the total reimbursement amount. The average of a hospital’s DRG weights over a given period determines its case mix.                                        

The most common primary diagnosis for hospital admissions by far in 2014 was psychoses. That year, primary diagnoses for psychosis reached an estimated 2.1 million, and secondary diagnoses were approximately 39 million. Part of the reason for this is the definition of the DRG itself, as its subcategories include multiple types of severe mental illnesses that can require inpatient treatment, such as schizophrenia, bipolar disorder with manic episodes, and severe depression. However, this number dropped significantly in 2015 to about one-quarter of what it was the year before.

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