Which of the following best describes how hospitals initially coped wh

Which of the following best describes how hospitals initially coped when Medicare reimbursement became based on diagnosis-related groups (DRGs)?

a. Charged more for patients whose care was paid by insurance
b. Decreased nursing staff to cut labor costs
c. Lobbied politicians to increase Medicare reimbursement to reflect actual costs
d. Refused to accept Medicare patients

ESSAYBID ANSWER

ANS: A
Hospitals developed cost shifting to supplement losses caused by Medicare funding. Because private insurance reimbursements were cost based, hospitals included the loss in their total costs; therefore private insurance paid for covering care to both their enrollees and Medicare patients. The implementation of DRGs did not cause hospitals to decrease nursing staff, lobby politicians to increase Medicare reimbursement, or refuse to accept Medicare patients.