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PubMed1993

Institutional responses to Medicare's prospective payment system.

The introduction of Medicare's prospective payment system (PPS) meant an important change in the environment of US hospitals. The new payment system was expected to improve clinical and non-clinical efficiency in hospitals. A case study in a non-profit Pennsylvania hospital was performed to analyse the impact of PPS on hospital services. The hospital responded to PPS by a twofold strategy. First, attempts were made to achieve effective cost containment by improving the efficiency of intermediate and final outputs. Here special attention is paid to the activities of the DRG coordinator and the Utilization Review Committee and to the activities of nurses in their role as case manager. The second strategy was directed at revenue enhancement, initially mainly by shifting more costs to non-Medicare patients and later by trying to strengthen the position of the hospital in the local health care market. This second strategy was considered more important than the strategy of cost containment. With respect to organizational structure and policy-making, the following changes can be observed: a growing importance of strategic management; more integrated hospital-physician relationships; and the development of an adequate medical information system and a medical records department.

Cost Control↗

PubMed2002

Social work services in home health care: challenges for the new prospective payment system era.

The implementation of the Prospective Payment System (PPS) provides a unique opportunity for social workers to be better integrated into home health care. To do so, it is important for social workers to define their roles and eliminate any barriers to providing social workers services, which may improve patient outcomes. Two focus groups with home health nurses (n = 10) and social workers (n = 8) were conducted in a large urban home health agency to define social work roles and identify barriers to providing social work services. This paper categorizes the barriers to providing social work services into informational, systems/organizational, and inter-professional barriers and presents possible solutions to these barriers as home health agencies strive to provide care under PPS.

Adult↗

PubMed1987

How did Medicare's prospective payment system affect hospitals?

Using data from 1982 and 1984, we examined how Medicare's prospective payment system affected hospitals. The study showed that hospitals paid through the prospective payment system had significantly lower increases in Medicare costs and greater declines in Medicare use than did other hospitals. Unlike these other hospitals, for which Medicare costs approximately equaled Medicare revenues, hospitals receiving prospective payment kept Medicare costs from rising as fast as Medicare revenues, earning the profit that the prospective payment system allowed. The opportunity to earn a profit led hospitals to slow increases in Medicare costs, regardless of the level of revenue constraint. However, the more the prospective payment system constrained hospitals' revenues, the more hospitals slowed increases in Medicare costs. In the most constrained hospitals, slower increases in Medicare costs were accompanied by slower increases in total hospital spending. The least constrained hospitals slowed Medicare cost increases the least and did not show their overall spending. These hospitals nevertheless increased their profit margins the most, since the prospective payment system's federal rate paid them the highest rates relative to base-year costs. Since federal rates produced extra profits, not extra cost containment, their appropriateness is questionable. The prospective payment system should be modified to eliminate windfalls while continuing to promote cost containment.

Cost Control↗

PubMed1987

Payment system alternatives for addressing systematic risk in a prospective payment system.

Explore the source record for details and available documents.

Financial Management↗

PubMedDate not supplied

Medicare's operational history and impact on health care.

Medicare was originally designed in the 1960s to fit into the existing health care delivery system. However, the program's early years showed an inflationary impact on health care costs. Medicare was the second largest federal domestic program and the fastest growing one, making it a target for those concerned about the size of government in general. By 1980, Medicare constituted 15% of the nation's expenditures for personal health care; and Medicare's administrators recommended substantive changes in provider payments through the introduction of the prospective payment system. Prospective payment system legislation impacted hospitals initially and later skilled nursing facilities and home health agencies. As policymakers made changes in Medicare payments to providers, providers made changes in the way services were delivered. What eventually evolved, in an insidious manner, was implicit management of the nation's health care delivery system by the Medicare program.

Delivery of Health Care↗

PubMed1990

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1991 rates--HCFA. Final rule.

We are revising the Medicare inpatient hospital prospective payment system to implement necessary changes arising from legislation and our continuing experience with the system. In addition, in the Addendum to this final rule, we are describing changes in the amounts and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. In general, these changes are applicable to discharges occurring on or after October 1, 1990. We also set forth rate-of-increase limits for hospitals and hospital units excluded from the prospective payment system. This final rule also responds to comments received concerning changes to hospital payments made in an April 20, 1990 final rule with comment. These changes include mid-year changes to the inpatient hospital prospective payment system that implemented provisions of the Omnibus Budget Reconciliation Act of 1989; and adjustments applicable to prospective payment hospitals and to the target amounts of hospitals and units excluded from the prospective payment system due to the elimination of the day limitation on covered inpatient hospital days made by the Medicare Catastrophic Coverage Act of 1988 and later repealed by provisions in the Medicare Catastrophic Repeal Act of 1989. The April 20, 1990 final rule with comment also incorporated changes to these provisions made by the Family Support Act of 1988, which clarified the criteria for adjusting the target amounts and implementation date. In addition, this final rule clarifies the documentation requirements necessary to support the cost allocation of teaching physicians and the allowability of costs for rotating residents in determining payment for the direct costs of an approved graduate medical education program. This clarification is being made as a result of a September 29, 1989 final rule that made changes in Medicare policy concerning payment for the direct graduate medical education costs of providers associated with approved residency programs in medicine, osteopathy, dentistry, and podiatry.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1993

Quality of care for hospitalized depressed elderly patients before and after implementation of the Medicare Prospective Payment System.

OBJECTIVE: The authors evaluated the impact of Medicare's Prospective Payment System on aspects of quality of care and outcomes for depressed elderly inpatients in acute-care general medical hospitals. METHOD: The depressed elderly inpatients (N = 2,746) were hospitalized in 297 acute-care general medical hospitals. The authors used a retrospective before-and-after design, controlling for differences over time in sickness at admission. Quality of care and outcomes were assessed through clinical review of explicit and implicit information in the medical records; secondary data sources provided information on postdischarge outcomes. RESULTS: After implementation of the prospective payment system 1) a higher percentage of patients had clinically appropriate acute-care admissions; 2) the initial assessment of psychological status by the treating provider was more complete; 3) the quality of psychotropic medication management, as rated by the study psychiatrists, improved; 4) the rates of any inpatient medical or psychiatric complication, of discharge to another hospital or a nursing home, and of inpatient readmission declined; and 5) there was no marked change in the percentage of patients rated by study clinicians as having acceptable overall clinical status at discharge or the rate of mortality 1 year after admission. CONCLUSIONS: After the implementation of the Medicare Prospective Payment System, the quality of care for depressed elderly inpatients improved and there was no marked increase in adverse clinical outcomes. Despite these gains, after implementation the quality of care was moderate at best and over one-third of the patients had unacceptable clinical status at discharge.

Aged↗

PubMed2002

Medicare program; prospective payment system for long-term care hospitals: implementation and FY 2003 rates. Final rule.

This final rule establishes a prospective payment system for Medicare payment of inpatient hospital services furnished by long-term care hospitals (LTCHs) described in section 1886(d)(1)(B)(iv) of the Social Security Act (the Act). This final rule implements section 123 of the Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA) and section 307(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA). Section 123 of the BBRA directs the Secretary to develop and implement a prospective payment system for LTCHs. The prospective payment system described in this final rule replaces the reasonable cost-based payment system under which LTCHs are currently paid.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1986

Medicare program; fiscal year 1987 changes to the inpatient hospital prospective payment system--HCFA. Final rule with comment period.

This rule implements those portions of sections 9302 and 9303 of the Omnibus Budget Reconciliation Act of 1986 affecting fiscal year 1987 payments to prospective payment hospitals and hospitals excluded from the prospective payment system. The changes in the law affecting prospective payment hospitals concern the update factor; reductions in the standardized amounts to reflect differences in payment for outliers between urban and rural hospitals; revised rural referral center criteria; and reductions in payments for capital-related costs. For hospitals excluded from the prospective payment system, from the changes affect the rate-of-increase limits (target amounts).

Centers for Medicare and Medicaid Services, U.S.↗

PubMed2000

Medicare's new home health prospective payment system explained.

The new Medicare home health prospective payment system pays fixed, predetermined rates for services provided during episodes of home health care. This article details the construction and principal components of the new payment system and shows how episode payment rates and other amounts that Medicare now pays for home health care are calculated. Suggestions are made for steps that home health agencies can take to respond most effectively to the new system's operational requirements and align themselves with the plan's financial incentives.

Aged↗

PubMed1988

Case shifting and the Medicare Prospective Payment System.

We assessed impacts of the Medicare Prospective Payment System (PPS) during its first two years of operation (1984-85) on 467 hospitals using data from the Commission on Professional and Hospital Activities and from the American Hospital Association. Medicare discharges as a per cent of total discharges remained constant between 1983 and 1985, but the per cent of uninsured patients increased, especially at large public hospitals. The number of Medicare and total discharges per hospital declined. The number of complex diagnosis related groups (DRGs) increased, both for Medicare and non-Medicare. This trend began before the implementation of PPS and affected all types of hospitals. There was also an appreciable increase in case mix types of hospitals. There was also an appreciable increase in case mix severity within specific DRGs during 1980-85. The proportion of total patients received from or transferred to other hospitals rose after 1983, but these increases were very small. The per cent of Medicare patients admitted through the emergency room increased, especially after 1983. By contrast, the share of total non-Medicare admissions through the emergency room (ER) remained stable. Although the growth of the number of uninsured and Medicare patients admitted through the ER predate PPS, they may be influenced by it and warrant further monitoring.

Diagnosis-Related Groups↗

PubMed1985

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1986 rates--HCFA. Proposed rule.

We are proposing to modify the Medicare inpatient hospital prospective payment system in order to implement necessary changes arising from experience with the system and from certain recommendations of the Prospective Payment Assessment Commission provided under section 1886(d)(4)(D) of the Social Security Act (the Act). In addition, this proposal sets forth our first adjustment of the diagnosis-related group weights and classifications as required under section 1886(d)(4)(C) of the Act. In addition, in the addendum to this proposed rule, we are proposing changes in the methods, amounts, and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. Changes proposed to the Federal portion of the payment would be applicable to discharges occurring on or after October 1, 1985. Proposed changes to the hospital specific portion would be effective with hospital cost reporting periods beginning on or after October 1, 1985. In effect, these changes would apply to the final year of the three-year transition period for the hospital prospective payment system. The addendum also sets forth our proposal for determining the rate-of-increase limits (target amounts) for hospitals excluded from the prospective payment system.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1987

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1988 rates--HCFA. Final rule.

We are revising the Medicare inpatient hospital prospective payment system to implement necessary changes arising from legislation and our continuing experience with the system. One of these changes is the inclusion in the prospective payment system of hospitals located in Puerto Rico. In addition, in the addendum to this rule, we describe changes in the methods, amounts, and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. In general, these changes are applicable to discharges occurring on or after October 1, 1987. We also set forth the rate-of-increase limits for hospitals and hospital units excluded from the prospective payment system.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1985

Medicare program: changes to the inpatient hospital prospective payment system and fiscal year 1986 rates--HCFA. Final rule.

We are modifying the Medicare inpatient hospital prospective payment system in order to implement necessary changes arising from experience with the system. In addition, this final rule sets forth our first adjustment of the diagnosis-related group weights and classifications as required under section 1886(d)(4)(C) of the Act. Also, in the addendum to this final rule, we are describing changes in the methods, amounts, and factors necessary to determine prospective payment rates for Medicare inpatient hospital services. Changes to the Federal portion of the payment are applicable to discharges occurring on or after October 1, 1985. Changes to the hospital-specific portion are effective with hospital cost reporting periods beginning on or after October 1, 1985. In effect, these changes apply to the final year of the three-year transition period for the hospital prospective payment system. The addendum also sets forth the rate-of-increase limits (target amounts) for hospitals excluded from the prospective payment system.

Hospitals↗

PubMedDate not supplied

The effect of Medicare's prospective payment system on discharge outcomes of skilled nursing facility residents.

In July 1998, the Centers for Medicare and Medicaid Services (CMS) changed the payment method for Medicare (Part A) skilled nursing facility (SNF) care from a cost-based system to a prospective payment system (PPS). Unlike the previous cost-based payment system, PPS restricts skilled nursing facility payment to pre-determined levels. CMS also reduced the total payments to SNFs coincident with PPS implementation. These changes might reduce quality of care at skilled nursing facilities and could be reflected in resident discharge patterns. The present study examines the effect of the 1998 policy change on resident discharge outcomes. The results indicate that PPS reduced the relative risk of discharge to home and to death for Medicare residents (compared to non-Medicare residents) and had no significant effect on hospitalizations or transfers.

Aged↗

PubMed1991

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1992 rates--HCFA. Final rule.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed2002

Medicare program; changes to the hospital outpatient prospective payment system and calendar year 2003 payment rates; and changes to payment suspension for unfiled cost reports. Final rule with comment period.

This final rule with comment period revises the Medicare hospital outpatient prospective payment system to implement applicable statutory requirements and changes arising from our continuing experience with this system. In addition, it describes changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. These changes are applicable to services furnished on or after January 1, 2003. This rule also allows the Secretary to suspend Medicare payments "in whole or in part" if a provider fails to file a timely and acceptable cost report. In addition, this rule responds to public comments received on the November 2, 2001 interim final rule with comment period (66 FR 55850) that set forth the criteria the Secretary will use to establish new categories of medical devices eligible for transitional pass-through payment under the Medicare's hospital outpatient prospective payment system. Finally, this rule responds to public comments received on the August 9, 2002 proposed rule for revisions to the hospital outpatient prospective payment system and payment rates (67 FR 52092). CMS finds good cause to waive proposed rulemaking for the assignment of new codes to Ambulatory Payment Classifications and for the payment of influenza and pneumococcal vaccines under reasonable cost; justification for the waiver will follow in a subsequent Federal Register notice.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed2005

Challenges in the new prospective payment system: action steps for social work in home health care.

The Balanced Budget Act of 1997 changed the reimbursement rules for Medicare home health benefits from a fee-for-service system to a prospective payment system (PPS). As with Medicare's hospital reimbursement system, home health agencies have to provide appropriate and adequate care for a flat rate reimbursement for each patient. As a result coordination and collaboration among all members of the home health care team (that is, nurses, social workers, physical therapist, occupational therapist, speech therapist, and home health aides) is critical to provide home care for frail and chronically ill populations. The authors provide background on the PPS, home health care, and social work roles in home health care and propose policy and research action steps for the social work profession.

Aged↗