IPPS DRG Validation Review Process

Noridian performs DRG validation on PPS claims, as appropriate, reviewing the medical record for medical necessity and DRG validation. These reviews are conducted in accordance with the requirements of Pub. 100-08 (Program Integrity Manual) Chapter 6, Section 6.5.3.

The purpose of DRG validation is to ensure that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician's description and the information contained in the beneficiary's medical record. Reviewers validate principal diagnosis, secondary diagnoses, and procedures affecting or potentially affecting the DRG.


Noridian uses individuals trained and experienced in ICD coding to perform the DRG validation functions. The validation is to verify the accuracy of the hospital's ICD coding of all diagnoses and procedures that affect the DRG.

Noridian bases DRG validation upon accepted principles of coding practice, consistent with guidelines established for ICD coding, the Uniform Hospital Discharge Data Set data element definitions, and coding clarifications issued by CMS.

Noridian verifies a hospital's coding in accordance with the coding principles reflected in the ICD Coding Manual. Noridian uses the ICD version in place at the time the services were rendered, and the official National Center for Health Statistics and CMS addenda, which update the ICD Manual annually. Hospitals are not required to code minor diagnostic and therapeutic procedures (e.g., imaging studies, physical, occupational, respiratory therapy), but may do so at their discretion.


Noridian ensures that the hospital reports the principal diagnosis and all relevant secondary diagnoses on the claim. The relevant diagnoses are those that affect DRG assignment. The hospital must identify the principal diagnosis when secondary diagnoses are also reported. The hospital can list the secondary diagnoses in any sequence on the claim form because the GROUPER program will search the entire list to identify the appropriate DRG assignment.

  • Principal Diagnosis - Noridian determines whether the principal diagnosis listed on the claim is the diagnosis which, after study, is determined to have occasioned the beneficiary's admission to the hospital. The principal diagnosis (as evidenced by the physician's entries in the beneficiary's medical record) (see 42 CFR 412.46) must match the principal diagnosis reported on the claim form. The principal diagnosis must be coded to the highest level of specificity. For example, a diagnosis from "Symptoms, Signs, and Ill-defined Conditions," may not be used as the principal diagnosis when the underlying cause of the beneficiary's condition is known.
  • Inappropriate Diagnoses - Noridian excludes diagnoses relating to an earlier episode that have no bearing on the current hospital stay, deletes any incorrect diagnoses, and revises the DRG assignment as necessary.


Noridian ensures that the hospital has reported all procedures affecting the DRG assignment on the claim. If there are more procedures performed than can be listed on the claim, Noridian verifies that those reported include all procedures that affect DRG assignment, and that they are coded accurately.


CMS IOM, Publication 100-08, Program Integrity Manual, Chapter 6 - Medicare Contractor Medical Review Guidelines for Specific Services, Section 6.5.3


Last Updated Jul 21 , 2023