A 25-question diagnostic evaluating whether your organisation has the coding infrastructure, revenue model resilience, data quality, contractual alignment, and sequencing discipline to absorb the AR-DRG transition without a cash-flow or pricing crisis in year one. Applicable to both providers and insurers.
5 domains
25 questions
Approximately 15 minutes
Provider or insurer perspective
Self-assessment version. This instrument is available as a facilitated Full Diagnostic: with independent validation, written report, and a board-ready Proceed / Delay / Redesign recommendation specific to your DRG transition context.
Several questions in this instrument have provider-specific and insurer-specific variants. Select your perspective before starting. You can change this at any time before viewing results.
Section 1 of 5: Coding Infrastructure0% complete
Section 1 of 5
Coding Infrastructure
Evaluates whether your clinical documentation practices, coding workforce, and NPHIES integration are capable of producing the ICD-10-AM/ACHI/ACS accuracy that AR-DRG classification and reimbursement requires.
Does your organisation have a formal clinical documentation improvement programme: with trained coders, physician engagement, and audit processes specifically aligned to ICD-10-AM/ACHI/ACS standards?
Strong – 3 pointsA formal CDI programme exists with trained coders, regular physician education, and quarterly audit of ICD-10-AM/ACHI coding accuracy against national standards.
Partial – 2 pointsCoding capability exists but documentation improvement is informal, physician engagement is limited, or audits are infrequent.
Weak – 0 pointsNo structured CDI programme. Coders are trained for itemised billing rather than DRG-based episode classification.
Question 2
What is your organisation's measured comorbidity capture rate: the proportion of clinically relevant comorbidities being coded that would affect DRG weight assignment?
Strong – 3 pointsComorbidity capture rate is actively monitored, benchmarked, and above 85%. Undercoding of conditions that affect DRG weight is a tracked performance metric.
Partial – 2 pointsComorbidity capture is understood broadly but is not systematically measured or benchmarked against DRG weight impact.
Weak – 0 pointsComorbidity capture is not monitored. The organisation has no visibility into the revenue impact of undercoding on DRG classification.
Question 3
Is your NPHIES integration complete and producing valid AR-DRG submissions: without systematic rejection errors or manual workarounds in the claims pathway?
Strong – 3 pointsNPHIES integration is complete, DRG submissions are validated against AR-DRG V9.0 grouper logic, rejection rates are below 3%, and no manual workarounds exist in the claims pathway.
Partial – 2 pointsNPHIES integration is operational but rejection rates are elevated, grouper validation is inconsistent, or manual interventions are required for a material share of DRG submissions.
Weak – 0 pointsNPHIES integration is incomplete or producing high error rates for DRG submissions. The organisation has not completed the technical transition from itemised to episode-based claims.
Question 4
Does your organisation have access to a validated AR-DRG grouper: and does it use it prospectively to verify DRG assignment before claims are submitted?
Strong – 3 pointsA validated AR-DRG V9.0 grouper is in active use, DRG assignments are checked prospectively before submission, and coder training is built around grouper logic.
Partial – 2 pointsGrouper access exists but is used retrospectively for audit rather than prospectively as part of the submission workflow.
Weak – 0 pointsNo active grouper use. DRG assignments are determined by coders without systematic validation against grouper output.
Question 5
Is your coding error rate tracked by error type: distinguishing between principal diagnosis errors, procedure code errors, and comorbidity omissions: with targeted remediation by category?
Strong – 3 pointsError rates are tracked by type, benchmarked monthly, and drive specific remediation programmes targeting the categories with highest DRG weight impact.
Partial – 2 pointsOverall error rates are tracked but are not broken down by type or linked to DRG weight impact for targeted remediation.
Weak – 0 pointsCoding errors are identified only through claim rejections. No proactive error rate monitoring or category-level remediation exists.
Section 2 of 5
Revenue Model Stress
Assesses whether your organisation has modelled the financial impact of moving from itemised billing to DRG bundled payments: and whether your revenue model, cash position, and pricing assumptions remain valid under the new reimbursement architecture.
Have you modelled the revenue impact of your current case-mix under AR-DRG cost weights: comparing your expected bundled reimbursement against your actual episode costs by service line?
Have you repriced your health insurance book against AR-DRG cost weights for your specific beneficiary population: replacing fee-for-service utilisation assumptions with episode-based cost projections?
Provider perspective: this question addresses episode-level revenue vs cost comparison.
Insurer perspective: this question addresses actuarial repricing under DRG-based claims patterns.
Strong – 3 pointsFull modelling completed. DRG cost weights applied to current case-mix (provider) or beneficiary population (insurer), with revenue/pricing impact quantified by service line or product segment.
Partial – 2 pointsPartial modelling completed. Analysis covers some service lines or segments but lacks the granularity to identify specific revenue or pricing exposures.
Weak – 0 pointsNo case-mix or actuarial modelling under DRG weights. Revenue or pricing assumptions are still built on fee-for-service patterns.
Question 7
Have you modelled the cash-flow impact of shifting from itemised claim settlement to episode-level reconciliation: accounting for the change in payment timing, reconciliation cycles, and working capital requirements?
Strong – 3 pointsCash-flow impact of the settlement timing change has been explicitly modelled, working capital requirements for the transition period are quantified, and financing arrangements are in place if needed.
Partial – 2 pointsThe settlement timing change is understood in principle but has not been translated into a quantified cash-flow impact model or working capital plan.
Weak – 0 pointsNo cash-flow modelling for the transition. The organisation is assuming that working capital requirements will not change materially.
Question 8
Has your organisation stress-tested its revenue or pricing model against a worst-case Year 1 scenario: including a 20% undercoding rate, elevated NPHIES rejection rates, and a 90-day delay in DRG-based payment settlement?
Strong – 3 pointsA combined worst-case scenario has been modelled with explicit financial impact and board-approved exposure limits. The organisation knows the maximum year-one loss it can absorb.
Partial – 2 pointsIndividual risk factors have been considered but not combined into a worst-case scenario model with defined exposure limits.
Weak – 0 pointsNo worst-case scenario modelling. Financial planning is built around base-case DRG transition assumptions.
Question 9
Have you identified which service lines are revenue-positive under DRG reimbursement and which are structurally loss-making: and adjusted your capacity, referral, or contract strategy accordingly?
Have you identified which product segments or beneficiary cohorts produce adverse loss ratios under DRG-based claims patterns: and adjusted your underwriting, pricing, or network strategy accordingly?
Strong – 3 pointsService-line or segment-level analysis is complete. Strategic decisions on capacity, contracting, or underwriting have been made based on DRG-adjusted performance projections.
Partial – 2 pointsAnalysis is underway but incomplete, or findings have not been translated into strategic adjustments.
Weak – 0 pointsNo service-line or segment-level DRG revenue analysis. The organisation is not yet positioned to make strategic adjustments based on DRG economics.
Question 10
Is your organisation financially reserved or capitalised to absorb the full modelled worst-case Year 1 revenue or pricing impact without operational disruption or regulatory concern?
Strong – 3 pointsReserves, credit facilities, or capital allocation are confirmed as sufficient to cover the worst-case Year 1 scenario. Board has approved the exposure limit and the mitigation plan.
Partial – 2 pointsFinancial resilience is believed to be adequate but has not been formally validated against the modelled worst-case scenario.
Weak – 0 pointsNo formal financial resilience assessment for the transition period. The organisation is assuming near-base-case financial performance in Year 1.
Section 3 of 5
Data & Audit Readiness
Tests whether your data infrastructure can generate the documentation quality, case-mix intelligence, and audit trail that DRG adjudication, NPHIES compliance, and internal performance management require.
Can your data infrastructure produce, on demand, a real-time case-mix distribution report showing DRG weights, episode costs, and reimbursement projections across your active patient population?
Strong – 3 pointsReal-time or near-real-time case-mix reporting exists with DRG weight distribution, episode cost tracking, and reimbursement projection by service line or beneficiary segment.
Partial – 2 pointsCase-mix reporting exists but is delayed, aggregated, or lacks the granularity required for active DRG performance management.
Weak – 0 pointsNo DRG-based case-mix reporting. Performance visibility relies on itemised billing statistics that do not translate to episode-level management.
Question 12
Is your NPHIES data quality sufficient to generate a reliable, auditable clinical record for every episode: with complete principal diagnosis, secondary diagnoses, procedures, and length-of-stay data?
Strong – 3 pointsNPHIES data completeness is actively monitored. Missing fields, inconsistent entries, and documentation gaps that affect DRG validity are identified and corrected within the same reporting cycle.
Partial – 2 pointsData completeness is broadly adequate but is not systematically monitored at the level of granularity DRG adjudication requires.
Weak – 0 pointsData completeness is not actively monitored. Material gaps in clinical documentation are likely to produce invalid or low-weight DRG assignments.
Question 13
Does your organisation have the analytical capability to detect, within one reporting cycle, when a shift in case-mix distribution is creating systematic revenue or pricing deviation from your DRG baseline?
Strong – 3 pointsCase-mix drift detection is automated or structured, with defined alert thresholds and escalation protocols that activate before the financial impact becomes embedded in the period results.
Partial – 2 pointsCase-mix is monitored but detection relies on manual review, with a lag that limits corrective action within the same reporting period.
Weak – 0 pointsNo structured case-mix drift monitoring. Deviations from the DRG baseline surface only when financial results are reported.
Question 14
Is there a formal DRG audit programme: internally or externally conducted: that validates the accuracy and consistency of DRG assignment against clinical documentation on a quarterly basis?
Strong – 3 pointsQuarterly DRG audits are conducted, findings are tracked over time, and systematic coding errors are addressed through targeted remediation with measurable improvement in accuracy rates.
Partial – 2 pointsAudits are conducted but frequency is less than quarterly, scope is limited, or findings do not consistently drive remediation action.
Weak – 0 pointsNo formal DRG audit programme. Coding accuracy is not independently validated against clinical documentation.
Question 15
Can your analytics function identify, at the DRG and ward level, which clinical teams or departments are generating the highest undercoding risk: and is that data being used to target documentation improvement?
Strong – 3 pointsDepartment and team-level coding risk analysis is available, and findings are used to prioritise physician engagement and documentation improvement programmes by clinical area.
Partial – 2 pointsOrganisation-wide coding risk is understood but has not been disaggregated to the department or team level for targeted improvement.
Weak – 0 pointsNo department-level coding risk visibility. Documentation improvement is applied uniformly rather than targeted to the highest-risk clinical areas.
Section 4 of 5
Contractual Alignment
Tests whether your existing and forthcoming provider-payer contracts are compatible with DRG-based reimbursement: and whether the terms protect your organisation against the contractual risks the transition creates.
Have your existing payer contracts been reviewed against AR-DRG reimbursement terms: and have you identified which contracts require renegotiation because they were priced under fee-for-service assumptions?
Have your existing provider network contracts been reviewed against AR-DRG reimbursement mechanics: and have you identified which contracts require renegotiation to avoid adverse selection under bundled payments?
Strong – 3 pointsAll material contracts have been reviewed. Contracts requiring renegotiation have been identified with a timeline and negotiation strategy in place before the DRG transition affects payment flows.
Partial – 2 pointsA review has been initiated but is incomplete, or contracts requiring renegotiation have been identified without a clear timeline or strategy.
Weak – 0 pointsNo contract review against DRG reimbursement terms. Existing contracts will be applied to DRG-based claims without amendment.
Question 17
Are there explicit dispute resolution mechanisms in your contracts specifically addressing DRG assignment disagreements: where the provider and payer assign different DRGs to the same episode?
Strong – 3 pointsContracts include explicit provisions for DRG assignment disputes: defining the adjudication process, timeline, independent reference standard, and financial settlement terms.
Partial – 2 pointsGeneral dispute resolution clauses exist but are not specifically designed for DRG assignment disagreements.
Weak – 0 pointsNo DRG-specific dispute provisions. Classification disagreements would be resolved through informal negotiation without defined process or timeline.
Question 18
Do your contracts include provisions for DRG cost weight updates: addressing what happens when AR-DRG V9.0 weights are revised and whether the financial impact of reclassification is shared or absorbed unilaterally?
Strong – 3 pointsContracts explicitly address DRG version updates and weight revisions: defining which version governs during the contract period and how mid-term reclassifications are financially settled.
Partial – 2 pointsSome provisions exist for regulatory change but are not specific to DRG version or weight updates.
Weak – 0 pointsNo provisions for DRG version updates. The financial impact of AR-DRG reclassification during the contract term is not contractually addressed.
Question 19
Are your reporting obligations: including the frequency, format, and completeness of DRG episode data shared between provider and payer: explicitly specified in your contracts?
Strong – 3 pointsData-sharing obligations for DRG episode data are contractually specified, including format, frequency, completeness standards, and consequences for non-compliance.
Partial – 2 pointsGeneral data-sharing obligations exist but are not specific to DRG episode data requirements or completeness standards.
Weak – 0 pointsData-sharing obligations are not explicitly defined. DRG episode data exchange relies on informal arrangements.
Question 20
Is there a structured joint review mechanism with your primary counterparties: built into contracts: that enables proactive course correction when DRG-based financial outcomes diverge from projections?
Strong – 3 pointsQuarterly joint review meetings are contractually specified, with defined agenda, escalation rights, and authority to implement corrective adjustments within the same contract period.
Partial – 2 pointsJoint reviews are intended but are informal, infrequent, or lack defined decision rights for within-period corrective action.
Weak – 0 pointsNo structured joint review. DRG performance divergence is addressed reactively at annual reconciliation rather than within the period where correction is possible.
Section 5 of 5
Transition Sequencing
Evaluates whether your organisation has structured the AR-DRG transition as a managed, phased programme with defined milestones, contingency triggers, and board-approved financial exposure limits: rather than a compliance exercise handled operationally.
Does your organisation have a formal AR-DRG transition plan: with defined phases, milestones, workstream owners, and a timeline that is credible against your current readiness baseline?
Strong – 3 pointsA formal, board-approved transition plan exists with phased milestones, named workstream owners, resource commitments, and a timeline tested against the current readiness baseline.
Partial – 2 pointsA transition plan exists at a high level but lacks the operational detail, phasing, or resource commitments required to execute reliably.
Weak – 0 pointsNo formal transition plan. The AR-DRG transition is being managed as an operational task rather than a structured programme.
Question 22
Has the board explicitly approved the financial exposure limits for the AR-DRG transition: defining the maximum acceptable revenue or pricing deviation in Year 1 and the threshold that triggers escalation?
Strong – 3 pointsBoard has explicitly approved financial exposure limits for the transition, with defined escalation triggers and a documented response protocol if those limits are breached.
Partial – 2 pointsFinancial exposure has been discussed at board level but has not been formalised into explicit limits with defined triggers and response protocols.
Weak – 0 pointsNo board-level financial exposure limits for the transition. The organisation lacks a defined threshold at which the transition approach would be reviewed or paused.
Question 23
Is there a structured training programme for coders, clinical staff, and finance teams: specifically designed to build AR-DRG competency: with tracked completion rates and proficiency assessments?
Strong – 3 pointsA structured, role-specific AR-DRG training programme is in place with tracked completion rates, proficiency assessments, and refresher cycles tied to the transition timeline.
Partial – 2 pointsTraining has been provided but is not structured, tracked, or assessed for proficiency across all affected roles.
Weak – 0 pointsNo structured AR-DRG training programme. Staff competency in DRG coding and episode management has not been formally assessed or developed.
Question 24
Has your organisation conducted a parallel-running period: processing episodes under both fee-for-service and AR-DRG simultaneously: to validate revenue projections before full cutover?
Strong – 3 pointsA parallel-running period has been completed or is planned with a defined scope, duration, and reconciliation methodology that validates DRG revenue projections against actual episode data.
Partial – 2 pointsShadow DRG coding has been trialled in limited areas but a formal parallel-running programme with reconciliation methodology has not been completed.
Weak – 0 pointsNo parallel-running period. The transition to AR-DRG reimbursement will occur without prior validation of revenue or pricing projections against live episode data.
Question 25
Are there defined contingency triggers in your transition plan: specifying the conditions under which the rollout would be paused, the scope reduced, or the timeline extended: with documented escalation protocols?
Strong – 3 pointsContingency triggers are explicitly defined in the transition plan: including coding error rate thresholds, rejection rate limits, and revenue deviation limits: with documented escalation and decision protocols.
Partial – 2 pointsContingency scenarios have been discussed but triggers are not formally defined or documented in the transition plan.
Weak – 0 pointsNo contingency triggers. The transition plan is designed for a single successful scenario without defined fallback positions.
AR-DRG Transition Readiness Assessment – Results
Your Transition Readiness Profile
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Domain Breakdown
Coding Infrastructure
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Revenue Model Stress
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Data & Audit Readiness
0/15
Contractual Alignment
0/15
Transition Sequencing
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Indicative Findings
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This self-assessment shows the methodology. The facilitated diagnostic goes further.
A facilitated HealthElevate AR-DRG diagnostic includes independent validation of your coding accuracy, revenue model stress testing specific to your case-mix, and a board-ready Proceed / Delay / Redesign brief with explicit conditions and sequencing recommendations.