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A 3-year prospective study was conducted to establish the incidence of traumatic brain injury (TBI) and related characteristics of age, sex, length of stay (LOS), intensive care unit LOS (ICU/LOS), direct hospital charges, and reimbursement using a prospective DRG-based reimbursement system. The study identified TBI patients using ICD-9-Codes. The mean LOS for the two groups of patients with intracranial injury differed (p <0.05). Those with such an injury accompanied by a fracture stayed 1.8 days less in the ICU and 6.0 days less overall.Direct hospital charges for all TBI patients were 14,138,036 (mean, 11,645). Using Medicare weights and hospital-specific rates/DRG, the DRG reimbursement was 6,689,293. Thirty-day outliers (those who stayed ten times the geometric mean length of stay) provided an additional 526,389 leaving a total non-reimbursable figure of 6,922,354, or 49% of total charges. Of the 71 DRGs assigned to the study population, 15 reimbursed more than the actual charges.The severity of TBI victims and the complexity of caring for them in a Level I trauma center generates hospital charges of which only half are reimbursed through an all-payor DRG system. Strategies to correct what could be a financial disincentive are: documenting the uniqueness of this population to justify additional reimbursement, caculating a more precise mean LOS for TBI-related DRGs to more accurately identify outliers, and calculating DRG rates for TBI diagnoses derived from a representative sample at varying severity levels and hospitalized in facilities with and without rehabilitation services.