Australia Refined Diagnosis-Related Groups v5.0 (AR-DRG v5.0)

As of 1 July 2004, NZHIS will be grouping all events to AR-DRG v5.0. This is in line with updating our classification system to ICD-10-AM 3rd Edition. AR-DRG v5.0 accepts ICD-10-AM 3rd Edition codes, so there is no mapping involved in the grouping process.

Variables used for grouping

Data items include:

  • Diagnosis
  • Procedures
  • Sex
  • Age
  • Event end type
  • Length of stay
  • Leave days
  • Admission weight
  • Mental health legal status
  • Same-day status.

The AR-DRG can take up to 30 diagnosis codes and 30 procedure codes per record.

The grouper performs the following tasks in the order given:

  • Demographic and clinical edits
  • MDC assignment
  • Pre-MDC processing
  • MDC partitioning
  • Adjacent DRG assignment
  • CCL and PCCL assignment
  • DRG assignment.

Differences between AR-DRG v4.2 and AR-DRGs v5.0

Version 5.0 incorporates ICD-10-AM 3rd Edition within the basic structure of Version 4. However, the Adjacent DRG numbering sequence is no longer contiguous, and may not reflect the surgical hierarchy in some MDCs. New features are summarised below.

  • New adjacent DRGs: Respiratory System Diagnosis with non-invasive ventilation (E41); Knee reconstruction or revision (I29); and Major breast reconstruction (J14).
  • Same-day DRGs for Glaucoma and Complex cataract procedures (C15); Lens procedures (C16); Oral and dental disorders (D67); skin ulcers (J60); Major skin disorders (J68); Minor skin disorders (J67); Non-surgical spinal disorders (I68); Cystourethroscopy in MDC 11 (l41); antenatal and other obstetric admission (O66); and Other factors influencing health status (Z64).
  • Multiple Organ Transplant (A02) has been removed from the classification, and Renal Transplant (L01) has moved from MDC 11 to Pre-MDC (A09).
  • Two Adjacent DRGs for allogeneic bone marrow transplant procedures (A07) and autologous bone marrow transplant procedures (A08) replace Adjacent DRG A04.
  • Glaucoma procedure DRGs (C06 & C07) and lens procedure DRGs (C08 & C09) in MDC 02 appear as two Adjacent DRGs, C15 and C16 respectively.
  • Adjacent DRGs for salivary gland procedures (D07) and mouth procedures (D08) in MDC 03 appear as one Adjacent DRG (D14).
  • Complex Gastroscopy incorporates a test for gastroscopy and colonoscopy performed in one admission (G46 replaces G40 & G41).
  • Cholecystectomy DRGs now distinguish between open and laparoscopic cholecystectomy (H07 & H08 replace H03 & H04).
  • Fractures of pelvis and femoral neck appear as two Adjacent DRGs (I77 & I78 replace I62).
  • Lower limb surgical DRGs in MDC 09 have been restructured (J12 & J13 replace J02 to J05).
  • MDC 14 has been rewritten to perform PCCL grouping for deliveries, based on new CC and CC-exclusion lists for obstetric diagnosis codes. DRG 962Z Unacceptable Obstetric Diagnosis Combination has been removed from the classification — outcome of delivery codes (Z37.-) now have a central role in grouping episodes to delivery DRGs. The new structure includes a DRG for uncomplicated delivery to assist in obstetric benchmarking and a same-day DRG for antenatal admissions.
  • DRGs for overnight HIV episodes have been combined into one Adjacent DRG (S65) with PCCL partitioning.

(Commonwealth of Australia: AR-DRG v5.0 Definitions Manual, page 4.)

AR-DRG numbering system

The format of each AR-DRG number consists of four alphanumeric characters organised in terms of ‘ADDS’, where:

A indicates the broad group to which the DRG belongs (MDC).

DD identifies the adjacent DRG within the MDC, and the partition to which the adjacent DRG belongs. An adjacent DRG consist of one or more DRGs generally defined by the same diagnosis or procedure code list but have differing levels of resource consumption and are partitioned on the basis of several factors, including complicating diagnoses/procedures, age and/or the patient clinical complexity level.

S is a split indicator that ranks DRGs within adjacent DRGs on the basis of their consumption of resources, for example:

A = highest consumption of resources within the adjacent DRG
B = second highest consumption of resources
C = third highest consumption of resources
D = fourth highest consumption of resources
Z = no split for the adjacent DRG.

Error DRGs

Hospital records that contain clinically atypical or invalid information are assigned to one of six Error DRGs in AR-DRG v5.0:

  • 901Z – Extensive OR Procedure unrelated to Principal Diagnosis
  • 902Z – Non-Extensive OR Procedure Unrelated to Principal Diagnosis
  • 903Z – Prostate OR Procedure Unrelated to Principal Diagnosis
  • 960Z – Ungroupable
  • 961Z – Unacceptable Principal Diagnosis
  • 963Z – Neonatal Diagnosis Not Consistent w Age/Weight.

These error DRGs fall into three groups. Group 1 relates to the method of classification, Group 2 relates more to coding standards, and Group 3 relates to coding quality.

Group 1: 901Z, 902Z and 903Z are used when all the operating room procedures are unrelated to the MDC of the patient’s principal diagnosis.

Group 2: 961Z and 963Z are used when the principal diagnosis will not allow the episode to be assigned to a clinically coherent DRG. For example, an ICD-10-AM code may be given as a principal diagnosis, when Australian Coding Standards state that the code is unacceptable as a principal diagnosis.

Group 3: 960Z is used when the principal diagnosis is invalid, or when other essential information is missing or incorrect.

In general, Group 1 relates to the method of classification, Group 2 relates more to coding standards, while Group 3 relates to coding quality.

Complication and Comorbidity Levels (CCLs) and Patient Clinical Complexity Levels (PCCLs)

CCLs are severity weights given to all additional diagnoses. They range in value from 0 to 4 for surgical and neonate episodes, and from 0 to 3 for medical episodes, and have been developed through a combination of medical judgement and statistical analysis.

PCCLs are a measure of the cumulative effect of a patient’s complications and comorbidities, and are calculated for each episode.

This information is only an introduction. Obviously, CCLs and PCCLs are very complex concepts. Please refer to the Appendix C of the Definitions Manual for more information.


Australian Refined Diagnosis Related Groups Version 4.1 Definitions Manual. Commonwealth of Australia.

This reference can be purchased from the National Centre for Classification In Health

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