Final answer:
Diagnosis-related groups (DRGs) are a classification system used for standardizing payments to hospitals for inpatient care, based on elements like the diagnosis and procedures. They are not applicable to outpatient settings.
Step-by-step explanation:
Diagnosis-related groups (DRGs) refer to a system used to classify hospital cases into one of over 700 categories. The intent of DRGs is to standardize payments to hospitals and encourage cost efficiency while maintaining quality care. They are primarily used for inpatient coding and are based on various elements such as the principal diagnosis, comorbidities, complications, and the procedures performed on the patient.
Each DRG has a payment weight assigned to it, which is used to determine the amount of money the hospital gets paid. This system is not used in the outpatient setting, which has different coding and payment structures.