How Do Diagnostic-Related Groups (DRGs) Help Control Medicare Costs

question 47

Multiple Choice

How do diagnostic-related groups (DRGs) help control Medicare costs?

• A) Assist physicians to make more accurate diagnoses
• B) Simplify administrative expenses
• C) Limit the coverage available to patients who have preexisting conditions
• D) Limit reimbursements to hospitals to amounts based on expected rather than actual costs of treatment

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Definitions:

U.S. GAAP

United States Generally Accepted Accounting Principles, the collection of rules and procedures designed to ensure consistency and transparency in financial reporting.

Estimated Cost

A projection or approximation of the future cost associated with a product, service, project, or investment, often used for budgeting purposes.

Provision

A provision is an amount set aside in the financial statements to cover a future liability or loss.

Dollar Amount

A specific quantity of money expressed in the currency of the United States, represented by the dollar symbol ($).