Australian Refined Diagnosis Related Groups v7.0 (AR-DRG v7.0)

From 1 July 2017 the Ministry of Health has been grouping all National Minimum Dataset (NMDS) event records with an event end date on or after 1 July 2017 to AR-DRG v7.0.

AR-DRG v7.0 accepts ICD-10-AM/ACHI Eighth Edition codes. ICD-10-AM/ACHI Eighth Edition was used from 1 July 2014 until 30 June 2019.

ICD-10-AM/ACHI Eleventh Edition was implemented 1 July 2019.  NMDS event records coded in ICD-10-AM/ACHI Eleventh Edition will have their ICD-10-AM/ACHI codes back-mapped to Eighth Edition which are then used to derive AR-DRG v7.0.

DRG Grouper Type

DRG grouper type code DRG grouper type description MDC type
01 Medicare Version 4.0 Secondary Care  
02 ANDRG Version 3.1 A
03 AR-DRG Version 4.1 B
04 AR-DRG Version 4.2 C
05 AR-DRG Version 5.0 D
06 AR-DRG Version 6.0 E
07 AR-DRG Version 6.0x F
08 AR-DRG Version 7.0 G

Cost Weight Code

01 = WIES5a
02 = WIES5a
03 = WIES8a
04 = WIES8B
05 = WIES8c
06 = WIES11a
07 = WIES11b
08 = WIES11c
09 = WIESNZ08
10 = WIESNZ09
11 = WIESNZ10
12 = WIESNZ11
13 = WIESNZ12
14 = WIESNZ13
15 = WIESNZ14
16 = WIESNZ15
17 = WIESNZ16
18 = WIESNZ17
19 = WIESNZ18
20 = WIESNZ19
21 = WIESNZ20
22 = WIESNZ21
23 = WIESNZ22

Variables used for grouping

Data items include:

  • Event end type
  • Length of stay
  • Admission weight
  • Mental health legal status
  • Same-day status
  • Urgency on admission.

The AR-DRG processes up to 30 diagnosis and 30 procedure per event record.

The grouper performs the following tasks in the order given:

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

Differences between AR-DRGs v6.0x and AR-DRGs v7.0

AR-DRG version 7.0 incorporates the 8th Edition of ICD-10-AM/ACHI within the basic structure of version 6.0x.  Version 7.0 of the classification comprises 771 DRGs in 406 Adjacent DRGs (ADRGs). This compares with 708 DRGs in version 6.0x and 399 ADRGs. Reflecting changes in clinical practices, most of the new DRGs in v7.0 are for same day episodes of care.

Variables that were used to partition ADRGs into DRGs in previous versions have been included in version 7.0. In the majority of cases, the patient clinical complexity level (PCCL) is used to split the ADRGs, however in a small number of cases, some additional splitting variables have been introduced, or re- introduced. These are:

  • Age (10 DRGs)
  • Gestational age (12 neonatal DRGs)
  • Urgency of admission (2 burns DRGs)
  • Stay of <2 days (3 DRGs)

The new features of AR-DRG v7.0 are summarised below.

Full review of MDC 15 Neonates and Other Newborns

  • Gestational age is now used to define ADRGs (P67 and P68) and split ADRGs into DRGs (P63 and P64).
  • A number of procedures are now used as proxies for major problem diagnoses.
  • The definition of P61 Neonate, AdmWt <750 g has been changed to Neonate, AdmWt <750g W/O Significant OR Procedure and new P07 Neonate, AdmWt <750g W Significant OR Procedure has been created.
  • The definition of P62 Neonate, AdmWt 750-999g has been changed to Neonate, AdmWt 750-000g W/O Significant OR Procedure and new P08 Neonate, AdmWt 750-999g W Significant OR Procedure has been created.
  • The definition of P67 Neonate, AdmWt >2499 g W/O Significant OR Procedure has been changed to Neonate, AdmWt > 250g W/O Significant OR Procedure <37 Completed Weeks Gestation and new P68 Neonate, AdmWt >2500 g W/O Significant OR Procedure >37 Completed Weeks Gestation has been created.

Review of bariatric codes and DRGs

  • K04 Major Procedures for Obesity has been deleted and the 36 procedures moved to K10 Revisional and Open Bariatric Procedures, K11 Major Laparoscopic Bariatric Procedures and K12 Other Bariatric Procedures.
  • K07 Obesity Procedures has been deleted and the 21 procedures moved to K12 Other Bariatric Procedures and K13 Plastic OR Procedures for Endocrine, Nutritional and Metabolic Disorders.

Review of paediatric complications

  • This identified 30 diagnoses specifically relating to children which indicated a higher resource use.These have been added to the complications/comorbidities matrix.

Review of medical short stay and same day episodes

  • The definition of existing medical ADRGs in MDC 08 has been changed to only include overnight separations.Same day separations now group to I40 Infusions for Musculoskeletal Disorders, I80 Femoral Fractures, Transferred to Acute Facility <2 Days, I81 Musculoskeletal Injuries, Same day and I82 Other Same day Treatment for Musculoskeletal Disorders.
  • The definition of existing ADRGs in MDC 20 has been changed to only include overnight separations.Same day separations now group to V65 Treatment for Alcohol Disorders, Same day and V66 Treatment for Drug Disorders, Same day.

Other changes

  • Increased use of same day splits within ADRGs.
  • A consistent naming convention has been applied to ADRGs and DRGs to enhance understanding and usability.
  • Ventilation for patients with multiple significant trauma has been moved to MDC 21A Multiple significant trauma.
  • The hierarchy order of MDC assignments in Pre MDC and ADRGs in all partitions have been revised.
  • All DRG splits have been revised.Age, gestational age, urgency of admission and radiotherapy are now used for partitioning ADRG.
  • G62 Complicated Peptic Ulcer and G63 Uncomplicated Peptic Ulcer have been deleted.All diagnoses in these ADRGs were moved to G70 Other Digestive System Disorders.
  • The definition of J67 Minor Skin Disorders has changed – the five diagnoses for sunburn have been moved to Y62 Other Burns.
  • O64 False Labour has been deleted and the three diagnosis codes moved to O66 Antenatal and Other Obstetric Admission.
  • R64 Radiotherapy has been deleted and the diagnosis code moved to R62 Other Neoplastic Disorders.
  • S60 HIV, Same day has been deleted.It is now incorporated in S65 Human Immunodeficiency Virus.

The definition of U65 Anxiety Disorders has changed – the five diagnoses for sleep disorders have been moved to the new Z66 Sleep Disorders.

(Independent Hospital Pricing Authority: AR-DRG v7.0 Definitions Manual 2013, page 4.)

The AR-DRG v7.0 Definitions Manual Volumes 1, 2 and 3 are available for purchase from the Independent Hospital Pricing Authority (IHPA) using their online ordering service, click here

AR-DRG v7.0 numbering system

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

M         indicates the broad group (the MDC) to which the DRG belongs

AA        identifies the adjacent DRG (ADRG) within the MDC and the partition to which the ADRG belongs. An ADRG consists of one or more DRGs generally defined by the same diagnosis or procedure code list.DRGs within an ADRG have differing levels of resource consumption, and are partitioned on the basis of several factors, including diagnoses/procedures used as a severity split, sameday, and level of comorbid disease and/or clinical complication.

The second and third characters (AA) identify the ADRG grouping and partition to which the ADRG belongs. These ranges are:

  • 01 to 39 = surgical
  • 40 to 59 = other
  • 60 to 99 = medical.

For example:

  • P67D Neonate, AdmWt >2500g W/O Significant OR Procedure <37 Completed Weeks Gestation W/O Problem belongs to a medical partition
  • I09B Spinal Fusion W/O Catastrophic CC belongs to a surgical partition
  • E41A Respiratory System Disorders W Non-Invasive Ventilation W Catastrophic CC belongs to the other partition.

D          is a split indicator that ranks DRGs within an ADRG on the basis of their consumption of resources. The values are:

A = highest consumption of resources
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.

Unrelated OR DRGs

Patients whose OR procedures are unrelated to the patient’s principal diagnosis are assigned to one of the three unrelated OR DRGs.

  1. 801A OR Procedures Unrelated to Principal Diagnosis W Catastrophic CC
  2. 801B OR Procedures Unrelated to Principal Diagnosis W Severe or Moderate CC
  3. 801C OR Procedures Unrelated to Principal Diagnosis W/O CC

An example of when an unrelated DRG may be assigned is when a patient is admitted for a medical treatment, they develop a complication unrelated to the principal diagnosis and later have an OR procedure performed for the additional diagnosis associated with the complication.

Error DRGs

Event records that contain clinically atypical or invalid information are assigned to one of three error DRGs:

  1. 960Z Ungroupable
  2. 961Z Unacceptable Principal Diagnosis
  3. 963Z Neonatal Diagnosis Not Consistent w Age/Weight.

These error DRGs fall into two groups.

Group 1: 961Z and 963Z are used when it is not possible to assign the record to a clinically coherent DRG based on the principal diagnosis. 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 2: 960Z is used when the principal diagnosis is invalid, or when other essential information is missing or incorrect.

In general, Group 1 relates more to coding standards, while Group 2 relates to coding quality.

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

CCLs are severity values given to 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. CCLs values can vary between ADRGs and the value given to a diagnosis depends on whether it has been categorised as minor, moderate, severe or catastrophic for the particular ADRG.

PCCL is a measure of the cumulative effect of a patient’s complications and comorbidities, and is calculated for each event record. The calculation is complex and has been designed to prevent similar conditions from being counted more than once.

This information is only an introduction. Obviously, CCLs and PCCLs are very complex concepts. Please refer to the Appendix C of the AR-DRG v7.0 Definitions Manual Volume Three for more information.

AR-DRG v7.0 Definitions Manuals can be purchased from the from the Independent Hospital Pricing Authority (IHPA) using their online ordering service, click here


Australian Refined Diagnosis Related Groups Version 7.0 Definitions Manual produced by the National Casemix and Classification Centre, Australia Health Services Research Institute, Univeristy of Wollongong.

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