Which factors are used to adjust DRG payments under IPPS?

• A. Severity of illness, geography, and teaching status.
• B. Patient age, gender, and race.
• C. Hospital charity status, ownership, and size.
• D. Seasonal variation, infection rate, and physician salaries.

Answer: (A)

Under IPPS, DRG payments are adjusted to reflect differences in patient needs and hospital costs, not just the raw DRG weight. The best answer captures the three adjustments most commonly applied: severity of illness, which accounts for how sick the patient is and the related resource use within the same DRG; geography, which uses the wage index to reflect local labor costs and thus alters payments by region; and teaching status, which triggers the indirect medical education adjustment to cover the higher costs associated with running residency programs. Other factors like patient age, gender, or race, or hospital characteristics such as charity status, ownership, or size, are not direct DRG adjustments under the standard IPPS model. Seasonal variation, infection rates, and physician salaries are not used as DRG adjustments themselves, though they may appear in separate quality or payment programs.