What is a key difference between inpatient UB-04 coding and payment vs outpatient UB-04 in terms of coding and payment?

• A. Inpatient uses CPT/HCPCS with service-level payments; outpatient uses ICD-10-PCS with DRG-based payment
• B. Inpatient uses ICD-10-PCS with DRG-based payment; outpatient relies on CPT/HCPCS codes and service-level payments
• C. Inpatient uses ICD-10-PCS; outpatient uses ICD-10-CM only; payments are the same
• D. Inpatient and outpatient use CPT/HCPCS with DRG-based payment

Answer: (B)

Inpatient coding uses ICD-10-PCS to capture the specific procedures performed during a hospital stay, and the payment is DRG-based—meaning the hospital is paid a fixed amount for the entire admission based on the diagnosis-related group, with adjustments for severity and other factors. This bundles all services and procedures into one prospective payment.

Outpatient coding, on the other hand, relies on CPT/HCPCS codes for the individual services and procedures performed during the visit, and payments are made on a service-by-service basis (often under outpatient payment groups like APCs). This reflects a fee-for-service style where each coded service can generate separate payment rather than a single bundled payment for an episode.

So the key difference is the coding system used (ICD-10-PCS for inpatient procedures vs CPT/HCPCS for outpatient services) and the payment method (DRG-based for inpatient vs service-level payments for outpatient).