prospective payment system


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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 ?
For the Home Health Prospective Payment System, the pre-period ranges from 1997 through 1999 (i.e., the Interim Payment System post-period) and the post-period ranges from 2000 through 2004.
The creators of the prospective payment system hoped that it would eliminate unnecessary hospital care by penalizing hospitals for longer than average hospital stays.
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.
Both the new prospective payment system and the proposed QIP were required by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).
The post-acute care payment system changes we study are the home health interim payment system, implemented in October 1997; the skilled nursing prospective payment system, implemented in July 1998; the home health prospective payment system, implemented in October 2000; and the inpatient rehabilitation prospective payment system, implemented in January 2002.
INPATIENT PAYMENT SYSTEM PROPOSED The Centers for Medicare and Medicaid Services has proposed a new prospective payment system for inpatient psychiatric facilities that treat Medicare beneficiaries.
The Medicare program constitutes a system for classifying patient care by relating common characteristics to determine necessary hospital resources and length of stay, and form the cornerstone of the prospective payment system. Ultimately, they lead to shorter hospital stays, thereby sending patients to nursing homes sooner and more often.
GAO reviewed the Department of Health and Human Services, Centers for Medicare and Medicaid Services' (CMS) new rule on changes in methodology for determining payment for extraordinarily high-cost cases (cost outliers) under the acute care hospital inpatient and long-term care hospital prospective payment systems. GAO found that (1) the rule would revise the methodology for determining payments for extraordinarily high-cost cases (cost outliers) made to Medicare-participating hospitals udner the acute care hospital inpatient prospective payment system; and (2) CMS complied with applicable requirements in promulgating the rule.
CMS is updating the outpatient prospective payment system that specifies payment rates for dose to 4,400 hospitals.
The complaint seeks an injunction prohibiting CMS from implementing certain provisions of the recently announced new rule that contains changes in the hospital outpatient prospective payment system. Specifically, Amgen says it is disputing the legality of provisions that would result in a significant reduction in the reimbursement rate of Aranesp for Medicare patients in the hospital setting, effective January 1, 2003.
The system uses technology consistent with CMS-published specifications for its Outpatient Prospective Payment System, and it imports claims data (including charges), calculates costs based on a hospital's departmental cost-to-charge ratios, and determines the reimbursement based on current CMS regulations.
Toward a prospective payment system for ambulatory surgery

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