OBJECTIVES: The new G-DRG hospital payment system came into effect in 2003. For a fully functional DRG-payment system it is important that DRG groups are cost homogenous. METHODS: To show the impact of innovations on the cost homogenity of a DRG group, a cost study has been performed as a sub-study of a clinical safety and feasibility analysis. RESULTS: We used the bone growth protein rhBMP-2 (not yet approved for Spine indication in Europe) additional to standard fusion for spine surgery in 18 cases. RhBMP-2 has the potential to reduce complication rates, avoids iliac crest bone graft harvesting and associated morbidities and ensures earlier return to work. The relevant DRG for fusion procedures in our patient group -with or without the usage of rhBMP-2- is I09B, relative weight 2.875 and average costs of 8313.94€. Average costs have been assessed in 536 patients. In our study we have assessed the cost for spine fusions with and without the usage of rhBMP-2. All costs have been calculated according to IneK calculations rules. Average cost were in the none rhBMP-2 group 8388.41€ with average implant costs of 2576.17€. The results reflect very well cost homogenity in the DRG group. Usage of rhBMP-2 adds significant drug cost (3422€). No significant other cost offsets apply. A total cost increase of 40.79% leads to an unacceptable high cost variance in the I09B. CONCLUSIONS: Based on this data one could conclude that specialized hospital wards in spine surgery who attract more difficult cases will be discriminated in the G-DRG system as they will more often have to use innovative high price drugs or medical devices. An expanded list of supplementary fees for high cost innovative technologies could help to reduce the costvariance within one DRG without the need to further differentiate DRG groups.