OBJECTIVES: The aim of this paper is to assess the appropriateness of a reimbursement setting for patients with burn diagnosis defined as T22, T23, T24, T25 and T29 under the MKN-10. METHODS: Activity-based-costing method was used for calculation of total costs per group of patients with the same diagnosis. In order to do that, activities were defined, as well as cost drivers. Resources were then assigned to activities according to actual consumption by each and activities were linked to cost objects (i.e. hospital case) using cost drivers. Special attention was put on indirect costs allocation. Total costs per case were then compared with the reimbursement according to DRG. Profit and loss statement of the University Hospital Kralovske Vinohrady, Prague for 2014 was used and also a breakdown by analytical accounts from the general ledger. Clinical data were abstracted from the patient registry, registry of cases, services and material used in 2014. RESULTS: We found out that the DRG reimbursement didn’t correspond to actual costs. We have analysed 8890 cases cured in 2014 (54% men, 46% women). Primary activities were defined as outpatient department, intensive care unit, operating theatre and inpatient department. Secondary activities comprise rehabilitation, radiodiagnostics, biochemistry and anaesthesia. Indirect costs are composed of hospital’s administrative departments, energies consumption, sterilisation, ICT or catering. We identified personal expenses and mas cost drivers. We found out that the ratio reimbursement based on DRG / costs was of 32% for the outpatient department, 15% for intensive care, 24% for operation theatre and 105% for inpatient department. CONCLUSIONS: We plea for broader use of activity-based-costing method as a basis to design the DRG reimbursement. Using activity-based-costing also means keeping accurate registries, evidence and cost analyses which constitutes a positive externality in itself. This option may improve the quality of care. Grant support: IGS VŠE F1/7/2016 and IP 100040.