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A Medicare Severity-Diagnosis Related Group (MS-DRG) is a system of classifying a Medicare patientâs hospital stay into various groups in order to facilitate payment of services.
â Neither system is severity adjusted and therefore does not. provide an incentive to care for higher need patients. â Higher complexity DRGs (with CC) are formed based on resource. intensity and do not address severity of illness nor risk of. mortality. â Medicare addressed these needs by developing MS-DRGs.