This study establishes the actual cost of nursing care for 13 diagnosis related groups (DRGs) at one hospital and relates them, within the limits of available statistics, to other published data. The impact of acuity levels involving both direct and indirect factors in nursing and of “outliers” is emphasized as critical in working within the preset reimbursement schedule of DRGs. More clearly defining these highly variable components of nursing care costs can assist nurse administrators to determine inadequate practice patterns and, by revising them, to decrease costs.