---
kind: "section"
citation: "42 C.F.R. § 412.10"
title: "42"
number: "412.10"
heading: "Changes in the DRG classification system."
url: "https://uscodex.org/cfr/42/412.10"
---

# §412.10. Changes in the DRG classification system.

- (a) **General rule.** CMS issues changes in the DRG classification system in a Federal Register notice at least annually. Except as specified in paragraphs [(c)](#c) and [(d)](#d) of this section, the DRG changes are effective prospectively with discharges occurring on or after the same date the payment rates are effective.
- (b) **Basis for changes in the DRG classification system.** All changes in the DRG classification system are made using the principles established for the DRG system. This means that cases are classified so each DRG is—
  - (1) Clinically coherent; and
  - (2) **Embraces an acceptable range of resource consumption.**
- (c) **Interim coverage changes—**
  - (1) **Criteria.** CMS makes interim changes to the DRG classification system during the Federal fiscal year to incorporate items and services newly covered under Medicare.
  - (2) **Implementation and effective date.** CMS issues interim coverage changes through its administrative issuance system and makes the change effective as soon as is administratively feasible.
  - (3) **Publication for comment.** CMS publishes any change made under [paragraph (c)(1)](#c-1) of this section in the next annual notice of changes to the DRG classification system published in accordance with [paragraph (a)](#a) of this section.
- (d) **Interim changes to correct omissions and inequities—**
  - (1) **Criteria.** CMS makes interim changes to the DRG classification system to correct a serious omission or inequity in the system only if failure to make the changes would have—
    - (i) A potentially substantial adverse impact on the health and safety of beneficiaries; or
    - (ii) **A significant and unwarranted fiscal impact on hospitals or the Medicare program.**
  - (2) **Publication and effective date.** CMS publishes these changes in the Federal Register in a final notice with comment period with a prospective effective date. The change is also published for public information in the next annual notice of changes to the DRG classification system published in accordance with [paragraph (a)](#a) of this section.
- (e) **Review by ProPAC.** Changes published annually in accordance with [paragraph (a)](#a) of this section are subject to review and comment by ProPAC upon publication. Interim changes to the DRG classification system that are made in accordance with paragraphs [(c)](#c) and [(d)](#d) of this section are subject to review by ProPAC before implementation.

## Notes

### Amendments

[50 FR 35688, Sept. 3, 1985, as amended at 51 FR 31496, Sept. 3, 1986; 57 FR 39820, Sept. 1, 1992]

### Authority

Authority: 42 U.S.C. 1302 and 1395hh.

### Source

Source: 50 FR 12741, Mar. 29, 1985, unless otherwise noted.

### Amendments

[50 FR 35688, Sept. 3, 1985, as amended at 51 FR 31496, Sept. 3, 1986; 57 FR 39820, Sept. 1, 1992]