Objective: The purpose of this study was to observe the changes in hospital costs and reimbursements after the introduction of the new diagnosisrelated group (DRG) payment system in Taiwan (Tw-DRGs). Methods: We recruited 52 patients who suffered from intertrochanter fracture of the femur from a regional teaching hospital in southern Taiwan. The patients were divided into two groups for analysis. Those who had more complex diagnoses and complications or comorbid conditions were classified as Group 1 (Tw-DRG 210), and the patients who had a simple diagnosis were classified as Group 2 (Tw-DRG 211). SPSS 13.0 software was used to analyze the data. Descriptive statistics were used to analyze the demographic data and costs. Paired t-tests and one way analysis of variance were used to analyze the differences between groups. Results: Between the two groups, the FFS (Fee for service), the special examination (Computed Tomography and Panendoscopy) and the length of hospital stay were significantly different. The total hospital costs for these patients was not significantly different after the new payment system was introduced, but in Group 2 the hospital payment which the Taiwan's Bureau of National Health Insurance (BNHI) offered was higher than the actual cost and in Group 1 it was lower. Conclusions: The results of this study indicate that the hospital payment from the BNHI was not significantly different from the actual medical costs for the total number of patients with intertrochanter fracture of the femur. The patients who belonged to Group 2 (Tw-DRG 211) usually had lower hospital costs than the payment received from BNHI, but the hospital costs for the patients in Group 1 (Tw-DRG 210) were usually higher than the payment received.