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Australian Refined Diagnosis Related Group Classification System (AR-DRG). AR-DRG is a patient classification scheme based on ICD-10-AM codes. It provides a way of grouping the patients treated in a hospital according to clinical characteristics and resource use. AR-DRG definitions manuals are published by the Commonwealth Department of Health and Ageing and distributed by the NCCH.
Development of the AR-DRG classification is on-going. Currently, a new version is released every two years. It has been developed to classify acute admitted patient episodes in public and private hospitals. It has been produced by the Australian Government Department of Health & Ageing (DoHA), in consultation with the Clinical Casemix Committee of Australia (CCCA), Clinical Classification and Coding Groups, the National Centre for Classification in Health, State and Territory health authorities, and other organisations.


  • AR-DRG version 4.0 created the AR-DRG platform for the introduction of ICD-10-AM, which was released as version 4.1. It uses ICD-9-CM diagnosis and procedure codes and has the same ADRG and DRG structure as Versions 4.1 and 4.2. Records were coded in ICD-9-CM between 1991 and 1998.
  • AR-DRG version 4.1 was released in December 1998. It incorporates the first edition ICD-10-AM codes, and marked the change to ICD-10-AM diagnosis and procedure codes. The ADRG and DRG structure is the same as Version 4.0.
  • AR-DRG version 4.2 was released in September 2000. It is a minor update to the classification and incorporates the second edition ICD-10-AM codes. The ADRG and DRG structure is the same as Versions 4.0 and 4.1.
  • AR-DRG version 5.0 was released in September 2002. It is a major update to the classification and incorporates the third edition ICD-10-AM codes. It incorporates major changes to MDC 14 (obstetrics), new same-day DRGs and revised splits in a number of Adjacent DRGs based on analysis of patient-cost data.
  • AR-DRG version 5.1 was released in October 2004. It is a minor update to the classification and incorporates the fourth edition ICD-10-AM codes. The ADRG and DRG structure is the same as Version 5.0.
  • AR-DRG version 5.2 was released in September 2006. It is a minor update to the classification and incorporates the fifth edition ICD-10-AM codes. The ADRG and DRG structure is the same as Versions 5.0 and 5.1.
  • AR-DRG version 6.0 is scheduled for release in September 2008. It is a major update to the classification and incorporates the sixth edition of ICD-10-AM codes.


Hierarchical Structure of the AR-DRG Classification System

A hierarchal approach is used within the AR-DRG Classification system for determining the most appropriate AR-DRG to be allocated to a separation. 

The following diagram presents a visual perspective of the hierarchal approach used when determining an AR-DRG.


In total there are 25 Major Diagnostic Categories (MDC),  8 pre-MDC categories, and 409 DRGs.

The grouping process follows the hierarchal task order of:

  • Demographic and clinical edits:
    The AR-DRG grouper applies both "demographic" and "clinical" edits to check the validity of the data items used for grouping.  The demographic and clinical edits generate "warning" flags if they encounter invalid information.
  • Major Diagnostic Category (MDC) assignment:
    MDC assignment is generally done on the basis of the principal diagnosis.  There are exceptions and an episode may be assigned to a different MDC during the Pre-MDC process.
  • Pre-MDC processing:
    There are 2 functions of the pre-MDC process.  Firstly, it identifies the eight very high cost DRG that comprise the "Pre-MDC" category.  Secondly, it changes MDC assignment in cases where MDC is not defined exclusively on the basis of principal diagnosis but rather on the existence of other specific data.  For example the existence of codes for tracheostomy or the transplantation of specific organs.
  • Adjacent DRG (ADRG) assignment:
    The partitions are medical, surgical and other.  The presence or absence of procedures typically carried out within operating rooms or elsewhere determines which partition the episode is assigned to.   For an episode to be assigned to a surgical partition, it needs to include at least one operating room (OR) procedure.  To be assigned to an "other" partition, the episode includes at least one non-OR procedure considered significant for the MDC.  If a procedure does not include either an OR procedure or a locally significant non-OR procedure it is assigned to a medical partition.  Episodes are assigned to adjacent AR-DRGs mainly on the basis of the diagnosis and procedure codes in the episode.
  • Complication and comorbidity level (CCL) and patient clinical complexity level (PCCL) assignment:
    Every diagnosis is assigned a CCL value and then every separation is assigned a PCCL value that measures the cumulative effect of complications and comorbidities.   Within the Victorian casemix funding formula, the assigned CCL and PCCL have no impact on the final reimbursement received for the inpatient treatment.
  • AR-DRG assignment:
    DRGs within adjacent DRGs have differing levels of resource consumption and are split on the basis of PCCL, age, malignancy, same day status, mental health status and mode of separation.

AR-DRG Numbering Structure

Each AR-DRG has four alphanumeric characters.

Character One: represents the MDC.  For example letter A = Pre-MDC, B = disease and disorders of nervous system, C = diseases and disorders of the eye etc

Characters two, three and four:  Collectively these characters identify whether this is an adjacent AR-DRG and the partition to which it belongs.

For example:

Consider the two AR-DRGs

G05A Minor small and large bowel procedures with complications of comorbidity
G05B Minor small and large bowel procedures without complications or comorbidity

G05 is in MDC 6 "Diseases and disorders of the digestive system" and is an adjacent AR-DRG; represented by "A" and "B". 

Partitions (surgical, medical or other) are represented by the location in the following range:

 01 to 39 = Surgical partition
 40 to 59 = Other
 60 to 99 = Medical

Based on the information above G05 is in MDC 6 "Diseases and disorders of the digestive system", is an adjacent AR-DRG (A&B) and is a surgical AR-DRG.

Get more information here 


Last Updated ( Monday, 12 May 2008 21:01 )  

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