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).
The creators of the prospective payment system hoped that it would eliminate unnecessary hospital care by penalizing hospitals for longer than average hospital stays.
Congress directed HCFA to develop a complementary prospective payment system for all outpatient care following the successful--from the Federal viewpoint--implementation of the DRG-based prospective payment system for inpatient care, begun in 1984.
com/research/fb2dfb/reimbursement_brie) has announced the addition of the "Reimbursement Briefing: New FY2011 Medicare Inpatient Prospective Payment Systems (IPPS) Final Rule What Your Hospital Needs to Know" audioconference to their offering.
1 billion in 1998 and 1999, whereas the Centers for Medicare and Medicaid Services estimated that the prospective payment system for SNFs would save US$30 million in 1998 (AHA 1998).
The characteristics of Maine's nursing home industry and its Medicaid prospective payment system have potentially significant implications for our understanding of the payment system's impact on nursing home behavior and costs.
HCFA acknowledged, however, that the potential for inappropriate upcoding exists in any prospective payment system that uses clinical information as the basis for determining payment.
GROUPS REPRESENTING HOME HEALTH AGENCIES (HHAs) are urging the Health Care Financing Administration (HCFA) to modify the proposed prospective payment system for HHAs to ensure fair payment and cash flow.
Coding Quality Improvement Services will also continue to grow at Care Communications, with the integration of the updated Inpatient Prospective Payment System (IPPS) which redefines, to a certain degree, the coding policies and procedures of the inpatient medical record.
HCFA's proposed Medicare SNF prospective payment system (PPS) increase has stirred up a less than enthusiastic response.
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.
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.

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