Objective: The paper explores the policy evolution, governance logic and practical results of DRG point method reform under the total budget management of medical insurance fund. Methods: Based on the policy text analysis and content comparative analysis methods, focusing on the core policies of 2017 and 2023, this paper systematically analyzes the evolution characteristics of the payment mechanism in terms of budget making, incentive mechanism and payment mode. Results: The reform of medical insurance payment method is helpful to realize the transformation from cost control to performance management, build a payment system primarily based on DRG point method and integrating multiple elements, effectively improve the efficiency of fund use, payment accuracy and service quality orientation level, and promote the modernization of medical insurance system. There are still some challenges in the reform of medical insurance payment method in Liuzhou City, such as difficulty in controlling point value fluctuation, insufficient incentive at the grass-roots level, and easy occurrence of excessive points. The stability of payment mechanism needs to be further enhanced. Conclusion: The study provides a replicable path framework for medical insurance payment in prefecture-level cities. In the future, we should further optimize the point value regulation and performance appraisal mechanism, improve the guidance efficiency of medical insurance on medical behavior and quality, and realize the coordinated development of medical insurance fund safety, accessibility high-quality service and doctor-patient satisfaction improvement.