OBJECTIVES: The aim of the study is to investigate the effect of the implementation of Diagnosis Related Groups (DRGs) on the average length of stay in the rheumatology departments in Hungary. METHODS: The data derive from the financial database of the National Health Insurance Fund Administration (OEP) of Hungary covering the period of 1995-2004. All the rheumatology departments in Hungary are included into the study. For the analyses we choose the average length of stay (ALOS). We compared the changes in the average length of stay of rheumatology departments with the national average of all medical specialities. During the period of 1995-2004 there were used 7 different versions of the Hungarian DRG. RESULTS: The average length of stay was 14.88 days in rheumatology in 1995 while it was on average 9.68 days for all medical specialities. For 2004 the average length of stay decreased by 3.85 days to 11.03 days in rheumatology and by 2.72 days to 6.96 days in all medical specialities. The gap between rheumatology and the national average of all medical specialities has been also closing up from a difference of 5.20 days in 1995 to 4.07 days in 2004. According to progressivity levels we found the longest average length of stay in national medical institutes providing higher (tertiary) level of medical care while the shortest ALOS was observed in city hospitals providing basic hospital care. CONCLUSIONS: We found that although the average length of stay of all medical specialities decreased between 1995-2004, the rheumatology departments underwent a significant reduction of their average length of stay. After the implementation of the Diagnosis Related Groups (DRG) system the hospitals realized a financial incentives in order to reduce their costs. In our investigation we managed to confirm that the efficiency of rheumatology care improved during this decade.