prospective payment system

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prospective payment system (PPS)

a payment mechanism for reimbursing hospitals for inpatient health care services in which a predetermined rate is set for treatment of specific illnesses. The system was originally developed by the U.S. federal government for use in treatment of Medicare recipients. See also diagnosis-related group.

pros·pec·tive pay·ment sys·tem

(PPS) (prō-spek'tiv pā'mĕnt sis'tĕm)
Arrangement mandated by the U.S. Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) to control Medicare costs; payment for services provided to a Medicare patient is fixed with adjustments made annually by the Centers for Medicare and Medicaid Services; payment is based on assigned diagnosis-related groups.

prospective payment system

A reimbursement method used in which a fixed, predetermined amount is allocated for treating patients with a specific diagnosis. It was originally developed for Medicare recipients. It is also called payment-by-diagnosis.
References in periodicals archive ?
2) After the Skilled Nursing Facility Prospective Payment System was implemented in 1998, for example, the number of hospital-based facilities fell while the number of freestanding facilities increased slightly (Dalton and Howard 2002; Medicare Payment Advisory Commission 2011).
Here is HSI's analysis: "While Medicare's prospective payment system based on DRGs has reduced acute care hospital costs and payments, the ambulatory care sector has not been similarly affected.
The immediate effects of the home health interim payment system and the skilled nursing prospective payment system, which were intended to constrain cost growth, would be to reduce the use of home health and skilled nursing, respectively.
With the upcoming Medicare outpatient prospective payment system and the potential change to a new diagnosis and procedure coding system, there will be significant demands associated with this contract.
Psychiatric, rehabilitation and children's hospitals, which are excluded from the prospective payment system, will have the limit placed on their allowable costs increased by between 3.
HCFA's proposed Medicare SNF prospective payment system (PPS) increase has stirred up a less than enthusiastic response.
GOOD DOCUMENTATION SKILLS HAVE ALWAYS BEEN IMPORTANT clinically speaking, but they take on new significance under Medicare's prospective payment system.
The changes to CMS' Inpatient Prospective Payment System (IPPS), which include revisions to the relative weights associated with each Diagnosis Related Group (DRG), will be phased in over three years, starting October 1, 2006.
One recent illustration of how far to "you-know-where in a handbasket" we've come is the recent controversy over the use of RUGs for the Medicare Prospective Payment System (PPS).
The home health prospective payment system, proposed by HCFA October 29, 1999, is scheduled to go into effect October 1, 2000, for all agencies, regardless of when their cost-reporting period begins.
CMS's estimate that the revised ASC rates would be 62% of the corresponding rates under the Outpatient Prospective Payment System for hospital outpatient departments;
Honest confusion on the part of providers caused by a complicated assessment system, rather than sinister motives to maximize Medicare reimbursement, explains why patients under the Prospective Payment System (PPS) are so frequently misreported, according to two reports released earlier this year by the Department of Health and Human Services (HHS) Office of Inspector General (OIG).

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