In the 1980s, Medicare initiated a program of diagnosis-related groups (DRGs) to reduce hospital costs. How did the DRGs reduce hospital costs?
a. By classifying various diagnoses as ineligible for hospitalization
b. By allotting a set amount of hospital days and prospective payment on the basis of the admitting diagnosis
c. By specifying particular physicians to treat specified diagnoses
d. By using frequency of a particular diagnosis to set a payment schedule
ANS: B
DRGs set up a system of preset hospitalization time and payment on the basis of the admitting diagnosis.
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