Which coding system is primarily used for inpatient hospital services?

The correct choice is focused on DRG, which stands for Diagnosis-Related Group. This coding system is specifically designed to classify hospital cases into groups for the purposes of payment. DRGs are used primarily for inpatient services, guiding reimbursement based on the patient's diagnosis and the treatment provided during their inpatient stay.

Each DRG is associated with a payment rate that reflects the average cost of treating patients in that group, thus helping hospitals manage their resources and budgets while providing care. This system is integral to the prospective payment system utilized by Medicare and many other insurers for inpatient admissions.

The other coding systems play different roles. HCPCS Level II codes are used primarily for outpatient services and procedures, specifically for items and services not covered by CPT codes. CPT, or Current Procedural Terminology, is mainly used for documenting outpatient procedures and services provided by healthcare professionals rather than for inpatient hospital services. ICD-10-CM codes are used for diagnosing and classifying diseases and health conditions; while vital for patient records, they do not specifically determine payment or resource use for inpatient services.