Objective To explore the impact of Diagnosis-Intervention Packet (DIP) reform on the operation of pilot county-level hospital, analyze the challenges that hospitals may face in DIP reform, and propose strategies to adapt to the reform. Methods The settlement list data of inpatients insured by medical insurance for 2022 from a county-level tertiary public hospital in Jiuquan City, Gansu Province were collected, where DIP was planned to operate. The DIP payment was simulated, and the operational status of the hospital and departments after implementing DIP reform was analyzed based on enrollment status, cost deviation, length of stay, hospitalization expenses, and DIP payment as relevant indicators. Results Under the implementation of DIP payment, the overall enrollment rate of the hospital was 98.1%, including 85.4% in the core group, 7.0% in the comprehensive group, and 7.6% in the grassroots group. Normal costs accounted for 88.9%, deviation costs accounted for 11.1%, with high magnification cases accounting for 1.9% and low magnification cases accounting for 9.2%. The payment standard for all cases included in the hospital according to DIP was 15.464 million yuan, the total amount paid by the pooling fund was 19.986 million yuan, and the difference between DIP payment and payment by project was –4.522 million yuan. Conclusion There is a significant difference in the medical insurance payments received by county-level hospitals after implementing DIP payment, and there is an urgent need to adapt to the DIP payment reform as soon as possible.