Studying quasi-experimental data from French hospitals from 2010 to 2013, we test the effects of a considerable diagnosis related group (DRG) refinement that occurred in 2012. As a result, the reform had a direct impact on hospital-level financial incentives but did not immediately concern individual providers. Using a difference-in-differences approach, controlling for multiple patient, hospital and regional characteristics and allowing for hospital and year effects, we show that introducing new severity levels and clinical factors into the reimbursement algorithm had no significant effect on the probability of a scheduled C-section being performed. The results are robust to multiple formulations of financial incentives, to restricting the sample to bigger (>15%) DRG tariff incentive changes and to analyzing policy effects for individual years following the reform. Our results suggest that the DRG refinement did not lead to a transmission of hospital-level stimuli to midwifes and obstetricians. Our paper is the first study that focuses on the consequences of DRG refinement in obstetrics and develops an approach suitable for measuring monetary incentives in this setting.