What does a Major Diagnostic Category (MDC) do?

A Major Diagnostic Category (MDC) is designed to organize diagnosis-related groups (DRGs) into specific, mutually exclusive categories that reflect the principal diagnosis of a patient. This categorization system simplifies clinical data for the purposes of billing and reimbursement, allowing for an efficient organization of related conditions that share similar clinical characteristics and resource consumption.

By grouping DRGs, MDCs enable hospitals and healthcare providers to better manage costs and resources while ensuring that payments align with the complexity and kinds of services rendered. This assignment of DRGs to MDCs is fundamental to the Medicare inpatient prospective payment system, as it aids in determining how cases are reimbursed based on diagnosis.

MDCs do not directly concern outpatient services, long-term care payment rates, or specific billing requirements for Medicare; those areas involve different methodologies and regulations. The main function of MDCs is to ensure that diagnosis-related groups are effectively organized and classified, making it easier to analyze data for both clinical and financial purposes.