Objective: This study aims to systematically analyze the policy evolution, institutional characteristics, and practical experience of medical insurance payment method reform in Shenyang City over the past decade, revealing its underlying operational logic and providing reference and insights for deepening payment reform nationwide. Methods: Using policy text content analysis and process tracking methods, this study systematically reviewed 45 core policy documents from 2016 to 2025, focusing on the analysis of inpatient payment method reforms centered on DRG payment and the exploratory pathways for outpatient payment. Results: The study found that the reform has undergone five stages, from “pilot exploration” to “value-oriented upgrading.” In terms of inpatient payment, a dynamic payment system has been successfully established, centered on the national CHS-DRG standard, integrating “dual total volume” risk control, refined grouping, and data governance. In terms of outpatient payment, the reform has taken outpatient special diseases as the entry point, exhibiting characteristics of gradual exploration and prioritizing foundational measures. Conclusion: Shenyang City's medical insurance payment method reform practice shows that, DRG is a systematic and dynamic policy practice that has effectively promoted the transformation of medical insurance funds from passive payment to active “value-based purchasing” and profoundly guided medical service behaviors. However, it still faces challenges such as strategic behaviors by medical institutions and a lack of coordination between outpatient and inpatient reforms. It is recommended that in the future, the linkage between payment and quality be deepened, an integrated outpatient-inpatient payment system be accelerated, and a multi-party governance mechanism be improved.