CPB (Certified Professional Biller) Certification Practice Exam

What does DRG stand for in the medical billing context?

1. Diagnosis related groups

2. Electronic data interchange

3. Department of Defense

4. Electronic funds transfer

The correct answer is: Diagnosis related groups

In the context of medical billing, DRG stands for Diagnosis Related Groups. This is a classification system that groups together hospital cases that are clinically similar and are expected to use similar amounts of hospital resources. The purpose of DRGs is to determine how much hospitals will be reimbursed for patient stays under Medicare and other payment systems. Each DRG has a payment weight associated with it, which is used to calculate the reimbursement amount based on the specific characteristics of the patient's care. Understanding DRGs is crucial for medical billers, as it directly impacts the coding of patient diagnoses and procedures, and helps ensure that the reimbursement reflects the complexity and cost of the services provided. This system plays a significant role in managing healthcare costs and resource allocation within hospitals and can influence the overall quality of care provided to patients.