Objective: The paper analyzes the effect of three-stage compensation method, with DRG overspending settlement of 22493 cases (5.44%) beyond DRG payment standard in Anyang City in 2022. Methods: We collected data of cases from the DRG payment system, analyze cases whose medical expenses are less than or equal to 1.5 times the standard cost, cases whose medical expenses are more than 1.5 times the standard cost, groups with different weight, groups with more enrollments, groups with extremely high weight, groups with extremely low weight fund compensation ratio, and hospitals' final compensation ratio, and observe the impact of the DRG three-stage compensation method. Results: The fund compensation ratio for cases whose medical expenses exceed 1.5 times the standard cost was 80.81%, and the hospitals' final compensation ratio was 88.76%. The fund compensation ratio of overbudget cases with different weights, larger number of enrolled cases, groups with extremely high weight and extremely low weight ranged from 75.85% to 90.35%, and the final compensation ratio of hospitals ranged from 85.37% to 93.89%. Conclusion: The three-stage compensation method for the overspending settlement of cases beyond the standard cost can to some extent guarantee the operation of hospitals overspending cases and smooth implementation of DRG payment standard.