OBJECTIVE To analyze the impact of the diagnosis-related groups （DRG） payment reform on the length of stay and medical costs in patients with chronic obstructive pulmonary disease （COPD） in Kashgar region， aiming to provide localized empirical evidence for the optimization of regional medical insurance payment methods. METHODS Based on the inpatient settlement database of the Xinjiang Uygur Autonomous Region Healthcare Security Administration， settlement data of COPD inpatients from 17 medical institutions in Kashgar region between January 1， 2022， and December 31， 2024， were extracted. The overall changes in patients’ length of stay and costs were compared before and after the reform. Subsequently， interrupted time series analysis （ITSA） was employed to explore the impact of the DRG payment reform on these variables. RESULTS Following the reform， both the average length of stay and various cost decreased significantly compared to the pre-reform period （ P ＜0.001）. At the overall sample level， the average length of stay， average total cost， average drug cost， average medical service cost， and average examination cost per admission all demonstrated significant long-term downward trends after the reform （ P ＜0.05）. However， the decrease in average out-of-pocket costs and the increase in average consumable costs per admission were not statistically significant （ P ＞0.05）. In tertiary medical institutions， the average length of stay and all categories of costs （except average consumable costs per admission） exhibited significant long-term upward trends after the reform （ P ＜0.05）； conversely， in secondary and lower-level medical institutions， the average length of stay， average total cost， average drug cost， average medical service cost， and average examination cost per admission showed significant long-term downward trends （ P ＜0.05）. CONCLUSIONS The DRG payment reform has achieved an overall effect of reducing the length of stay and controlling costs in COPD patients from Kashgar region. However， the effects vary across different levels of medical institutions： secondary and lower-level institutions show a long-term downward trend in length of stay and costs， whereas tertiary institutions exhibit a long-term upward trend. Furthermore， patients’ out-of-pocket financial burden does not show significant improvement.