What Are DRGs, MS-DRGs, CCs and MCCs? A Beginner’s Guide
September 29, 2026
What Are DRGs, MS-DRGs, CCs and MCCs? A Beginner’s Guide
If you are beginning to learn inpatient medical coding, you will eventually encounter terms such as DRG, MS-DRG, CC, MCC, and Non-CC.
These terms can seem complicated at first because they are connected. Understanding how they fit together is an important part of learning inpatient hospital coding.
In simple terms, a Diagnosis Related Group (DRG) is a classification used to group hospital cases with similar clinical characteristics and resource needs. The Medicare Severity Diagnosis Related Group (MS-DRG) system further distinguishes many inpatient cases based on factors such as diagnoses, procedures, and the presence of qualifying secondary diagnoses.
Within the MS-DRG system, secondary diagnoses can be categorized as MCC, CC, or Non-CC, depending on the applicable coding and grouping logic.
Let’s break these concepts down step by step.
What Is a DRG?
DRG stands for Diagnosis Related Group.
A DRG groups an inpatient hospital case into a classification based on information reported for that hospitalization.
Rather than treating every hospital admission as completely unique for payment classification purposes, DRG systems group cases with similar characteristics.
The information used to determine a patient’s classification can include factors such as:
Principal diagnosis
Secondary diagnoses
Procedures performed
Patient characteristics
Discharge information
Other elements defined by the applicable grouping system
DRGs are therefore closely connected to inpatient coding.
The codes assigned from the patient’s documentation provide important information that is used by the grouping process.
What Is an MS-DRG?
MS-DRG stands for Medicare Severity Diagnosis Related Group.
The MS-DRG system is used within the Medicare inpatient prospective payment framework.
The word “Severity” is important.
MS-DRGs distinguish certain inpatient cases based on the presence of qualifying secondary diagnoses and other factors defined by the grouper.
For example, CMS MS-DRG definitions can distinguish between categories such as:
With MCC
With CC
Without CC/MCC
CMS’s current MS-DRG materials show many DRG families structured around these severity distinctions.
This means that simply knowing the patient’s principal diagnosis is not always enough to understand the final MS-DRG.
The complete coded record matters.
What Is a CC?
CC stands for Complication or Comorbidity.
A CC is a secondary diagnosis that meets the applicable criteria to be treated as a complication or comorbidity within the MS-DRG system.
A CC can provide additional information about the patient’s clinical condition and may affect MS-DRG assignment when the applicable grouping logic recognizes it.
However, an important point for beginners is that not every secondary diagnosis automatically functions as a CC.
CMS maintains specific lists, definitions, and exclusion logic that determine how diagnoses are treated within the MS-DRG system.
What Is an MCC?
MCC stands for Major Complication or Comorbidity.
An MCC represents a higher-level severity category than a standard CC within the MS-DRG framework.
Like CCs, MCCs are generally considered in the context of secondary diagnoses and the applicable MS-DRG logic.
CMS publishes specific diagnosis codes that are classified as CCs or MCCs, along with exclusion rules that can affect whether a diagnosis functions as a CC or MCC in a particular case.
An MCC therefore should not simply be interpreted as “a very serious diagnosis” based on clinical intuition.
The coder must determine whether the documented diagnosis meets the applicable coding and MS-DRG rules.
What Is a Non-CC?
You will also encounter the term Non-CC.
A Non-CC is a secondary diagnosis that does not qualify as a CC or MCC under the applicable MS-DRG logic.
This does not mean the diagnosis is medically unimportant.
It simply means that, for the particular MS-DRG classification logic, the diagnosis does not function as a CC or MCC.
This distinction is extremely important for new coders.
Clinical importance and MS-DRG severity classification are not necessarily the same thing.
CC vs MCC vs Non-CC
Here’s a simple way to understand the three categories:
| Category | Meaning | Role in MS-DRG logic |
|---|---|---|
| MCC | Major Complication or Comorbidity | Higher severity category |
| CC | Complication or Comorbidity | Additional severity category |
| Non-CC | Does not qualify as CC or MCC | Does not function as a CC/MCC |
The exact effect of a diagnosis depends on the applicable MS-DRG definitions and the complete coded record.
How Do DRG, MS-DRG, CC and MCC Work Together?
This is where the concepts become easier to understand.
Imagine a patient is admitted to a hospital.
The medical record contains:
Principal diagnosis
Secondary diagnoses
Procedures
Other required patient information
↓
ICD-10-CM / ICD-10-PCS coding
↓
MS-DRG grouping
The grouping process evaluates the coded information according to the applicable MS-DRG logic.
Secondary diagnoses may be evaluated to determine whether they qualify as MCC, CC, or Non-CC.
The resulting information contributes to the patient’s MS-DRG classification. CMS notes that MS-DRG assignment can depend on the principal diagnosis, qualifying secondary diagnoses, procedures, age, sex, discharge status, and other defined factors.
A Simple Example
Consider a hypothetical inpatient case.
A patient is admitted with a principal diagnosis requiring hospital treatment.
During the admission, the documentation also identifies one or more additional conditions.
The coder reviews the record and determines:
Principal diagnosis → ICD-10-CM code
Secondary diagnosis → ICD-10-CM code
Procedure → ICD-10-PCS code, when applicable
The secondary diagnosis is then evaluated under the applicable MS-DRG logic.
If it qualifies as an MCC, the case may fall into an MS-DRG category that specifies “with MCC.”
If it qualifies as a CC, the case may fall into a category specifying “with CC.”
If there is no qualifying CC or MCC, the case may fall into a category specifying “without CC/MCC.”
CMS’s MS-DRG definitions contain numerous examples of DRG families divided into these categories.
Important:
This does not mean a coder should select a diagnosis because it would produce an MCC or CC.
The diagnosis must be supported by the medical record and coded according to applicable coding guidelines.
The classification is a result of the documented and correctly coded clinical information.
Why Do CCs and MCCs Matter in Inpatient Coding?
CC and MCC concepts are important because they can affect the MS-DRG classification of an inpatient case when the applicable grouping logic recognizes them.
This is why inpatient coders need to look beyond the principal diagnosis.
A patient may have several documented conditions, but the coder must determine:
Which conditions are reportable
Which conditions meet coding requirements
Which are secondary diagnoses
Whether a secondary diagnosis qualifies as a CC or MCC
Whether an exclusion applies
Whether the diagnosis affects the applicable MS-DRG
CMS’s definitions include specific exclusion logic because a diagnosis does not automatically function as a CC or MCC in every situation.
Does Every Secondary Diagnosis Become a CC or MCC?
No.
This is one of the most important concepts for beginners.
A secondary diagnosis can be clinically significant but still be classified as Non-CC for MS-DRG purposes.
There are also situations where a diagnosis that appears on a CC or MCC list may not function as a CC or MCC because of specific exclusions or because of how it is positioned in the case.
CMS maintains detailed CC/MCC lists and exclusion rules for this reason.
Therefore, coders should never assume:
“Serious condition = MCC.”
Instead, the correct approach is:
Documentation → Coding Guidelines → Code Assignment → MS-DRG Logic
What Is the Difference Between a DRG and an MS-DRG?
The terms are related, but they should not be treated as identical.
DRG is the broader concept of grouping inpatient cases into diagnosis-related categories.
MS-DRG is the Medicare Severity DRG system that incorporates severity distinctions such as MCC and CC into its classification structure.
For learners studying U.S. inpatient coding, MS-DRG is particularly important because it is the classification system they will frequently encounter when studying Medicare inpatient reimbursement.
CMS publishes the MS-DRG Definitions Manual and grouper materials for the applicable fiscal year.
How Do ICD-10-CM and ICD-10-PCS Fit Into MS-DRG?
This connects directly with the concepts discussed in our earlier article on ICD-10-CM vs ICD-10-PCS.
ICD-10-CM
ICD-10-CM primarily represents:
Diagnoses
Diseases
Conditions
Symptoms
Injuries
Other reportable health-related information
ICD-10-PCS
ICD-10-PCS represents applicable inpatient hospital procedures.
These coded diagnoses and procedures become important inputs to the inpatient grouping process.
Therefore, an inpatient coder needs to understand both diagnosis coding and procedure coding before moving into more advanced MS-DRG concepts.
Why Is Documentation So Important?
MS-DRG classification begins with accurate information from the patient’s medical record.
Coders must work from documentation rather than assumptions.
For example, a coder should not infer a diagnosis simply because:
A medication was administered
A symptom appears in the record
A laboratory value looks abnormal
A treatment was provided
The diagnosis would change the DRG
The applicable coding guidelines determine what can be reported.
Accurate documentation and accurate code assignment are therefore fundamental to the grouping process.
Common Beginner Mistakes With DRGs, CCs and MCCs
Mistake 1: Thinking every serious diagnosis is an MCC
Severity in everyday clinical language is not the same thing as MS-DRG classification.
Mistake 2: Looking only at the principal diagnosis
Secondary diagnoses can also be relevant to MS-DRG assignment.
Mistake 3: Assuming every secondary diagnosis is a CC
Secondary diagnoses must meet the applicable requirements.
Mistake 4: Ignoring exclusion rules
CMS’s CC/MCC logic includes exclusions that can affect classification.
Mistake 5: Choosing diagnoses to increase severity
Coders should code diagnoses supported by documentation and applicable coding guidelines, not select codes based on a desired DRG outcome.
Mistake 6: Learning DRGs without understanding ICD-10-CM
Because diagnosis coding provides important information used in the grouping process, a strong ICD-10-CM foundation is essential.
A Simple Learning Order for Beginners
If these concepts seem complicated, learn them in this order:
Step 1: Medical terminology
↓
Step 2: Anatomy and physiology
↓
Step 3: ICD-10-CM diagnosis coding
↓
Step 4: ICD-10-PCS procedure coding
↓
Step 5: Inpatient coding guidelines
↓
Step 6: DRG concepts
↓
Step 7: MS-DRG
↓
Step 8: CC, MCC and Non-CC
↓
Step 9: Case-based inpatient coding
This progression helps learners understand not only what an MCC or CC is, but why it matters within the larger inpatient coding process.
Frequently Asked Questions
What does DRG stand for in medical coding?
DRG stands for Diagnosis Related Group. It is a classification system used to group inpatient hospital cases based on defined clinical and other characteristics.
What does MS-DRG stand for?
MS-DRG stands for Medicare Severity Diagnosis Related Group. It is a Medicare inpatient classification system that includes severity distinctions such as MCC and CC.
What does CC mean in medical coding?
CC means Complication or Comorbidity. Within the MS-DRG system, certain secondary diagnoses are classified as CCs according to the applicable definitions and logic.
What does MCC mean in medical coding?
MCC means Major Complication or Comorbidity. It represents a higher severity category within the MS-DRG framework.
What is a Non-CC?
A Non-CC is a secondary diagnosis that does not qualify as a CC or MCC under the applicable MS-DRG rules.
Does an MCC automatically determine the DRG?
No. MS-DRG assignment depends on the complete coded record and the applicable grouper logic. Other factors can include the principal diagnosis, secondary diagnoses, procedures, and other patient or discharge information.
Can a secondary diagnosis be clinically important but still be a Non-CC?
Yes. Clinical importance and MS-DRG CC/MCC classification are not identical concepts.
Do CCs and MCCs affect inpatient reimbursement?
They can affect the MS-DRG classification, which is part of the Medicare inpatient prospective payment framework. The actual payment outcome depends on the applicable payment system, hospital, payer, and other factors.
Final Takeaway
Understanding DRGs, MS-DRGs, CCs and MCCs is an important step toward understanding inpatient medical coding.
Remember the basic relationship:
ICD-10-CM → Diagnoses
ICD-10-PCS → Inpatient Procedures
DRG → Groups inpatient cases
MS-DRG → Medicare severity-based inpatient classification
CC → Complication or Comorbidity
MCC → Major Complication or Comorbidity
Non-CC → Does not qualify as CC/MCC
The most important principle is that coders should code what is supported by the documentation and applicable coding guidelines, rather than attempting to influence the final DRG.
Once these fundamentals are clear, more advanced topics such as MS-DRG grouping logic, principal diagnosis selection, CC/MCC exclusions, procedure impact, and inpatient reimbursement become much easier to understand.
Learn Advanced Inpatient Coding with SAIMCODE
If you want to move beyond basic diagnosis coding and develop a stronger understanding of inpatient coding and reimbursement, learning ICD-10-CM, ICD-10-PCS, MS-DRG, CC/MCC concepts, and case-based coding together can provide a more complete foundation.
SAIMCODE offers training designed to help learners build practical knowledge of U.S. healthcare coding and advanced inpatient concepts.
Explore SAIMCODE’s IPDRG and medical coding training programs to develop your understanding of inpatient coding, DRG classification, and hospital reimbursement concepts.