The diagnosis-related groups (DRG's) have classically focused on resources consumed during a hospital stay. DRG's can also be considered categories for describing cases admitted to a hospital. In this article, we illustrate how consistent patterns of variations in admission rates can be used to classify DRG categories according to the Index of Discretionary Admissions. The consistency of variation in admission rates for modified DRG categories across hospital service areas in Iowa, California, Massachusetts, and Maine was high. The proportion of hospital admissions in the DRG's judged to be most discretionary ranged from 22 percent in Iowa to 14 percent in California.