CHA News Article

DHCS Distributes Hospital-Specific Year 2 Rates for DRG Reimbursement

The Department of Health Care Services (DHCS) has announced that on May 20 it mailed to hospitals the year two base rates for Diagnosis Related Group (DRG) reimbursement. The rates will be effective beginning July 1. Letters were addressed to each hospital’s chief financial officer, and if a hospital has not received its year two rate letter within 10 days, it should notify DHCS at In addition, training sessions will be held June 5 and June 19 to provide an update on the DRG payment method and to answer questions. Notices and access information for the training will be sent via the DRG listserve once available.

Technical updates to the DRG method for fiscal year 2014-15 include version 31 of the All Patient Refined DRG grouping software; wage areas for non-transitional hospitals; hospital-specific cost-to-charge ratios; and inflationary adjustments to outlier thresholds.