Certified Risk Adjustment Coder (CRC)

What coding system is primarily used for reimbursement in Medicare?

1. A. CPT

2. B. ICD-10

3. C. SNOMED

4. D. Prospective payment system

The correct answer is: D. Prospective payment system

The primary coding system used for reimbursement in Medicare is the Prospective Payment System (PPS). This system establishes predetermined payment rates for specific services, which are based on the classification of patients and the severity of their conditions. It organizes services into categories that help Medicare determine how much to reimburse healthcare providers for services delivered to patients, especially for inpatient hospital services. The Prospective Payment System is critical for managing healthcare costs and ensuring that providers are compensated adequately while also controlling spending for the Medicare program. It contrasts with other coding systems, such as CPT, which is used to report procedures and services provided by healthcare professionals, and ICD-10, which is used for diagnosis coding. SNOMED is a clinical terminology that supports healthcare decision-making but is not specifically focused on reimbursement. Thus, while other coding systems provide essential data types and support clinical and administrative functions, the Prospective Payment System uniquely applies to the reimbursement structure within Medicare.