Diagnosis-Related Groups Are an Example of What Type of Reimbursement

question 13

Multiple Choice

Diagnosis-related groups are an example of what type of reimbursement method?

• A) Retrospective payment
• B) Fee-for-service payment
• C) Prospective payment
• D) Optimal payment

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Definitions:

Direct Materials

Raw materials that can be directly traced to the manufacturing of a product and are a significant portion of the production cost.

Variable Costing

An accounting method that includes only variable production costs in the cost of goods sold and treats fixed costs as period costs.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.

Manufacturing Margin

The difference between the cost of goods sold by a manufacturing company and its total sales, reflecting the gross margin specific to manufacturing operations.