Certified Revenue Cycle Representative (CRCR) Practice Exam

What does DRG stand for in hospital reimbursement systems?

1. Diagnosis Recognition Group

2. Diagnostic-Related Group

3. Direct Reimbursement Guide

4. Department Revenue Group

The correct answer is: Diagnostic-Related Group

The term DRG stands for Diagnostic-Related Group, which is a system used to classify hospital cases into groups that are expected to have similar hospital resource use. This classification system is fundamental for reimbursement models in hospitals, particularly for Medicare, as it determines how much money hospitals will be reimbursed for treating patients based on the nature of their diagnosis and the resources required for treatment. The DRG system categorizes patients based on their primary diagnosis, the procedures performed, and other clinical factors. By grouping diagnoses with similar resource consumption, it allows for standardized payments to hospitals, facilitating more predictable budgeting and planning. This structure encourages hospitals to manage resources efficiently and improve patient care, as they are incentivized to provide quality services without incurring excess costs. In the context of the other options, those do not accurately reflect the established terminology and structure of the reimbursement system.