Which of the following statements is True about diagnosis-related groups (DRGs)?

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DRGs are a case-mix classification system used to determine the payment provided to the hospital for inpatient services, regardless of the actual costs of treating a patient. DRGs were initially used by the federal Medicare system to pay hospitals for inpatient services, but have since been adopted by many other payors as well. A is incorrect because DRGs do not group costs together by departments performing the services. C is partially correct, as the federal Medicare system does use DRGs for payment, but the term "retroactive payment" is unclear and could refer to any payment system. D is incorrect because DRGs are not used to bill third-party payors for an average cost; rather, they determine a fixed payment amount for each patient based on their diagnosis and other clinical factors.

Which of the Following Statements Is True About Diagnosis-Related Groups