What is the primary purpose of outlier payments in DRGs?

The primary purpose of outlier payments in Diagnosis-Related Groups (DRGs) is to provide extra financial support for atypical patient cases. Outlier payments serve to address situations where a patient's treatment costs significantly exceed the average for their DRG due to the complexity or severity of their condition. In such cases, the standard payment a hospital receives may not be sufficient to cover the actual costs incurred.

By offering additional compensation for these outlier cases, the payment system ensures that hospitals are not financially disadvantaged when they treat patients who require more extensive or resource-intensive interventions. This aspect of the DRG payment system promotes equitable reimbursement, ensuring that hospitals are encouraged to accept a diverse range of patients, including those with rare conditions or complicated medical issues that require more intensive care.

In considering the other options, it's clear that they do not directly align with the specific purpose of outlier payments: they focus on incentives, penalties, or cost reduction without addressing the unique financial challenges presented by atypical cases.