Which of the following statements about the Medicare payment system for hospital inpatient care (IPPS) is most correct?

a. The basis for payment is the patient's diagnosis as specified by DRG.
b. The DRG payment is adjusted for severity.
c. Payments are increased for patients with very high costs (outliers).
d. Payments are adjusted for the hospital's local conditions (wage rates).
e. All of the above statements are correct.

Answer: e. All of the above statements are correct.