1. What is the primary purpose of the Diagnosis-Related Group (DRG) system in hospital reimbursement? A. To standardize patient care B. To encourage cost efficiency C. To classify hospital cases into one of originally 467 groups D. To provide a flat fee payment Answer: B. The DRG system aims to encourage cost efficiency in hospitals by setting a flat fee payment for hospital cases, which are classified into groups based on diagnoses and procedures. 2. How does the Outpatient Prospective Payment System (OPPS) differ from the Inpatient Prospective Payment System (IPPS)? A. OPPS is for inpatient care, while IPPS is for outpatient care. B. OPPS uses Ambulatory Payment Classifications, while IPPS uses DRGs. C. OPPS provides reimbursements before service delivery, while IPPS does after. D. OPPS applies to physician services, while IPPS applies to hospital services. Answer: B. OPPS uses Ambulatory Payment Classifications for outpatient services, which differ from the DRGs used by IPPS for inpatient services. 3. In the context of hospital services, what does 'capitation' refer to? A. A payment model where services are paid for individually B. A payment model where a provider is paid a set amount for each enrolled person C. A payment model based on the quality of care provided D. A payment model where providers share the financial risk Answer: B. Capitation refers to a payment model where a provider is paid a set amount for each enrolled person regardless of the number of services provided. 4. What is the significance of 'case mix index' (CMI) in hospital reimbursement? A. It determines the allocation of nursing staff. B. It reflects the diversity of services provided by a hospital. C. It measures the average DRG weight for a hospital's patient