AR-DRG

Diagnosis Related Groups (DRGs) have a long history of development in Australia, commencing with the release of the Australian National DRG (AN-DRG) classification in July 1992. Coinciding with the introduction of ICD-10-AM in 1998, AR-DRGs replaced the AN-DRGs in December 1998. Using ICD-10-AM/ACHI as a basis, the AR-DRGs were developed to reflect Australian clinical practice and use of hospital resources. The AR-DRGS are used by the Independent Hospital Pricing Authority (IHPA) for the pricing of admitted acute episodes of care in Australian public hospitals, and by public and private hospitals, and state and territory health authorities to provide better management, measurement and payment of high quality and efficient health care services. Other users include health funds, researchers, epidemiologists, health economists and statisticians.

The AR-DRGs classify units of hospital output. The classification groups inpatient stays into clinically meaningful categories of similar levels of complexity (outputs) that consume similar amounts of resources (inputs).

Since 1998, a new revision of the AR-DRGs has been made available every two years, with the exception of AR-DRG Version 7.0 which had a three year development period. AR-DRG Version 8.0 is the current version of the classification, and is being used by IHPA for pricing from July 2016.

The AR-DRG classification is supplied in hardcopy format (3 volumes of the AR-DRG Definitions Manual), and grouper software is available from various vendors. With each new version the following are produced:

  • an updated AR-DRG Classification incorporating accepted changes
  • an updated AR-DRG Definitions Manual
  • a reviewed and improved severity process within the AR-DRG classification

Ongoing development of the AR-DRG Classification System is essential for the delivery of a national standard for monitoring activity in major areas of Australian hospital care and the determination of a NEP for public hospitals in Australia.