The nurse is caring for a patient who is on Medicare. Because the patient is on Medicare, the nurse is aware that
a. The hospital will be paid for the full cost of the patient's hospitalization.
b. Capitation provides the hospital with a means of recovering variable charges.
c. Diagnosis-related groups (DRGs) provide a fixed reimbursement of cost.
d. Medicare will pay the national average for the patient's condition.
ANS: C
In 1983, Congress established the prospective payment system (PPS), which grouped inpatient hospital services for Medicare patients into 468 diagnosis-related groups (DRGs), each of which provides a fixed reimbursement amount based on assigned DRG, regardless of a patient's length of stay or use of services. This encourages hospitals to provide more efficient services because costly stays may not be fully covered. Capitation means that providers receive a fixed amount per patient or enrollee of a health care plan. DRG reimbursement is based on case severity, rural/urban/regional costs, and teaching costs, not national averages.
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