Objectives : To evaluate the impacts of the DRG payment system on the behavior of medical insurance claimants. Specifically, we evaluated the case-mix index, the numbers of diagnosis and procedure codes utilized, and the corresponding rate of diagnosis codes before, during and after implementation of the DRG payment system. Methods : In order to evaluate the case-mix index, the number of diagnosis and procedure codes utilized, we used medical insurance claim data from all medical facilities that participated in the DRG-based Prospective Payment Demonstration Program. This medical insurance claim data consisted of both pre-demonstration program data (fee-for-service, from November, 1998 to January, 1999) and post-demonstration program data (DRG-based Prospective Payment, from February, 1999 to April, 1999). And in order to evaluate the corresponding rate of diagnosis codes utilized, we reviewed 820 medical records from 20 medical institutes that were selected by random sampling methods. Results : The case-mix index rate decreased after the DRG-based Prospective Payment Demonstration Program was introduced. The average numbers of different claim diagnosis codes used decreased (new DRGs from 2.22 to 1.24, and previous DRGs from 1.69 to 1.21), as did the average number of claim procedure codes used (new DRGs from 3.02 to 2.16, and previous DRGs from 2.97 to 2.43). With respect to the time of participation in the program, the change in number of claim procedure codes was significant, but the change in number of claim diagnosis codes was not. The corresponding rate of claim diagnosis codes increased (from 57.5% to 82.6%), as did the exclusion rate of claim diagnosis codes (from 16.5% to 25.1%). Conclusions : After the implementation of the DRG payment system, the corresponding rate of insurance claim codes and the corresponding exclusion rate of claim diagnosis codes both increased, because the inducement system for entering the codes for claim review was changed.