CPB Certified Professional Biller Certification Practice Exam 2025 - Free CPB Practice Questions and Study Guide

The acronym that signifies a system for classifying hospitalization based on diagnosis is DRG, which stands for Diagnosis-Related Group. This classification system is used primarily by Medicare and other third-party payers to determine how much to reimburse hospitals for inpatient care. It assigns hospitals a fixed fee for services rendered based on the patient's primary diagnosis and any secondary diagnoses or procedures performed during the hospital stay. The DRG system encourages hospitals to provide effective and efficient care, as they receive a predetermined amount set for the specific diagnosis group regardless of the actual costs incurred in the patient's treatment.

APC stands for Ambulatory Payment Classification, which is used for outpatient services rather than hospitalization. ICD stands for International Classification of Diseases, which is a coding system used to classify diseases and health-related conditions, but it does not specifically group hospitalizations for payment purposes like DRGs do. HCPCS, or Healthcare Common Procedure Coding System, is a set of codes for healthcare procedures and services but is not a classification system for hospitalization based on diagnoses. Thus, the distinctive classification feature of the DRG makes it the correct answer.