PUP 4931r Lecture Notes - Lecture 70: Prospective Payment System, Managed Care, Bachelor Of Business Administration
16 May 2018
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Pptx: Hospitals account for about 50% (in 1995).
OBRA limits reimbursement
TEFRA established increase-rate limits, introduced concept of
Diagnosis Related Groups (treatment fee schedule);
Provided ietive payets to effiiet hospitals.
PPS modeled on a New Jersey program – demonstration project from
HCFA grant. PPS based upon DRGs – hospital must pay extra costs
incurred above the limit. All major illnesses put into 492 categories –
established by HCFA. This is the most widespread change since
inception. DRGs are an example of a regulatory solution, while
managed care is a market-based solution.
PP“’s have ee very suessful; fears of ost-shifting and poor care
largely unrealized. Tacit pressure on docs to comply with the fee
schedule.
The complex reimbursement schedule ingendered great
dissatisfaction among docs. 1984 reimbursement freeze. 1985 –
Physician Payment Review Commission; recommends relative value
scale. Physicians and phys.groups very unhappy with RVS – created a
single conversion factor for all services.
Reductions in provider payments primary source of savings in 1997
BBA, Hospitals: 30%, 20% from private payment plan reductions
Medicare Hospital Payment
Inpatient stays under Medicare Part A (Hospital Insurance) are based on
prospectively set rates.
This payment system is referred to as the inpatient prospective payment
system (IPPS).
Under the IPPS, each case is categorized into a diagnosis-related group
(DRG).
Each DRG has a payment weight assigned to it, based on the average
resources used to treat Medicare patients in that DRG.
DSH Payment Adjustment
If the hospital treats a high-percentage of low-income patients, it receives a
percentage add-on payment applied to the DRG-adjusted base payment rate.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Pptx: hospitals account for about 50% (in 1995). Pps modeled on a new jersey program demonstration project from. Pps based upon drgs hospital must pay extra costs incurred above the limit. All major illnesses put into 492 categories established by hcfa. This is the most widespread change since inception. Drgs are an example of a regulatory solution, while managed care is a market-based solution. Pp "s have (cid:271)ee(cid:374) very su(cid:272)(cid:272)essful; fears of (cid:272)ost-shifting and poor care largely unrealized. Tacit pressure on docs to comply with the fee schedule. The complex reimbursement schedule ingendered great dissatisfaction among docs. Physician payment review commission; recommends relative value scale. Physicians and phys. groups very unhappy with rvs created a single conversion factor for all services. Reductions in provider payments primary source of savings in 1997. Bba, hospitals: 30%, 20% from private payment plan reductions. Inpatient stays under medicare part a (hospital insurance) are based on prospectively set rates.
