What classification system do hospitals use to bill specific codes?

The Diagnosis Related Group (DRG) classification system is primarily used by hospitals to bill for inpatient services. DRGs categorize hospital cases into groups that are expected to have similar hospital resource use, allowing hospitals to receive payment based on the anticipated costs of patients within each group. This system was developed to control healthcare costs and improve the efficiency of hospital expenditures.

DRGs work by assigning a code to a patient's diagnosis and treatment, which determines the reimbursement that the hospital will receive from Medicare and other insurance providers. Each DRG has a fixed payment amount, encouraging hospitals to provide effective care while managing costs, since they can retain any savings from delivering care at a lower expense than the fixed rate.

The other options represent different aspects of healthcare finance and reimbursement. Value-Based Reimbursement emphasizes rewarding healthcare providers for the quality of care instead of the quantity, while Concurrent Review Classification relates to the ongoing evaluation of care throughout a patient's stay rather than specifically for billing. The Outpatient Prospective Payment System is used for outpatient services and payments, but not for inpatient hospital billing, making DRG the most relevant classification system in this context.