Medicare uses a prospective payment plan based on diagnosis-related groups (DRGs). What are DRGs?
A) Locally supported health care financing, usually by donations
B) A public assistance program for low-income individuals
C) Predetermined payment for services based on medical diagnoses
D) A private insurance plan for subscribers who pay a copayment
Ans: C
Medicare, based on DRGs, pays a hospital a fixed amount that is predetermined by the medical diagnosis or specific treatment rather than by the actual cost of hospitalization and care. This plan was put into effect in an effort to control rising health care costs. It is not supported by donations; it is not a public assistance program or a private insurance plan.
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