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PubMed1985

Medicare; delay in implementing certain changes to the prospective payment system--HCFA. Notice.

This notice identifies provisions in Medicare prospective payment regulations that are affected by enactment of the Emergency Extension Act of 1985. That Act extended through November 14, 1985, the Federal fiscal year 1985 rules for determining amounts of Medicare payment to hospitals under the prospective payment system and the rate-of-increase limits for hospitals excluded from that system.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1991

Medicare's prospective payment system: a critical appraisal.

Implementation of the Medicare prospective payment system (PPS) for hospital payment has produced major changes in the hospital industry and in the way hospital services are used by physicians and their patients. The substantial published literature that examines these changes is reviewed in this article. This literature suggests that most of the intended effects of PPS on costs and intensity of care have been realized. But the literature fails to answer fundamental questions about the effectiveness and equity of administered pricing as a policy tool for cost containment. The literature offers some hope that the worst fears about the effects of PPS on quality of care and the health of the hospital industry have not materialized. But because of data lags, the studies done to date seem to tell us more about the effects of the early, more generous period of PPS than about the opportunity costs of reducing hospital cost inflation.

Aftercare↗
PubMed2004

Medicare program; prospective payment system for inpatient psychiatric facilities. Final rule.

This final rule establishes a prospective payment system for Medicare payment of inpatient hospital services furnished in psychiatric hospitals and psychiatric units of acute care hospitals and critical access hospitals. It implements section 124 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA). The prospective payment system described in this final rule will replace the reasonable cost-based payment system under which psychiatric hospitals and psychiatric units are paid under Medicare.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1993

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1994 rates--HCFA. Final rule with comment period.

We are revising the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement necessary changes arising from our continuing experience with the system. In addition, in the addendum to this final rule with comment period, we are describing changes in the amounts and factors necessary to determine prospective payment rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes are applicable to discharges occurring on or after October 1, 1993, unless the statute provides otherwise. We are also setting forth rate-of-increase limits for hospitals and hospital units excluded from the prospective payment systems. Finally, we are implementing certain changes in the hospital inpatient prospective payment systems resulting from the enactment of the Omnibus Budget Reconciliation Act of 1993 on August 10, 1993.

Capital Expenditures↗
PubMed1988

Medicare program; fiscal year 1988 legislative changes to the inpatient hospital prospective payment system--HCFA. Notice of legislative changes with comment period.

This notice describes those portions of sections 4002, 4005, 4008, and 4009 of the Omnibus Budget Reconciliation Act of 1987 that affect Federal fiscal year 1988 payments to prospective payment hospitals and hospitals excluded from the prospective payments system. The changes required by this law affect the prospective payment rates; the rate-of increase limits for hospitals excluded from the prospective payment system; the definition of a large urban area; the establishment of a new "regional floor;" the criteria for classification of rural referral centers; and outlier payments for burn cases.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1987

Redistribution of revenues under a prototypical prospective payment system: characteristics of winners and losers.

A variety of prospective payment programs have been implemented over the past decade in attempts to contain the rapidly escalating costs of providing hospital care. Eventually the hospital bills of most Americans are likely to be reimbursed on the basis of preset prices. In this simulation study the most important of the existing cost-containment programs, Medicare's Prospective Payment System, is extended to all hospital patients in order to estimate the revenue redistributions likely to take place as more and more comprehensive prospective rate-setting programs are enacted. After discussion of the methodology and results of the empirical section, the study considers several major policy issues facing the hospital industry and the likely responses by the industry.

Data Collection↗
PubMed1984

The Medicare prospective payment system.

In 1983 Congress adopted the most significant change in the Medicare program since its inception in 1965. Along with measures to ensure the solvency of the Social Security System into the next century, Congress approved a system of prospective payment for hospital inpatient services, whereby hospitals are paid a fixed sum per case according to a schedule of diagnosis related groups (DRGs). The program will be phased in over a four-year period that began October 1, 1983. Several types of hospitals and distinct part units of general hospitals are excluded from the system until 1985, when Congress will receive a report on a method of paying them prospectively. Information used to calculate the DRG rates was published September 1, 1983, as part of the interim final regulations. Other third party payers, such as state Medicaid systems and insurance companies, are considering converting to this method of payment, and several have adopted it. The implications for occupational therapy include a greater emphasis on reducing hospital length of stay, expanding outpatient care, increasing productivity, and a trend toward documentation and accounting consistent with computer technology.

Diagnosis-Related Groups↗
PubMed2003

The implementation of Medicare's outpatient prospective payment system and specific concerns for rural hospitals.

The transition to Medicare's new prospective payment system for hospital outpatient services has arguable been the most complex and difficult programmatic change in the history of Medicare (Federal Register, 2002). Concern about its adverse effects led to holding rural hospitals with 100 beds or fewer harmless from the financial consequences of the new payment system for the first three years. However, small rural hospitals were not held harmless from implementing the outpatient prospective payment system (OPPS). Many outside observers felt that small rural hospitals would be ill-equipped to handle the immensity of change required, and that claim denials or delays caused by inaccurate claims submissions might have a disproportionate effect on smaller hospitals. There were also reports about difficulties with the interim payment system that had been designed to ensure small hospitals did not lose money during the first three years. This policy brief describes issues that arose in implementing OPPS during the first years of the program, identifies specific implementation concerns for small rural hospitals, and raises issues that may warrant further research or policy action.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1990

Prospective payment system and other effects on post-hospital services.

The effects of the prospective payment system and other factors on the use of post-hospital services were investigated for four groups of diagnostically related Medicare discharges. Effects on specific services and total Medicare payments were analyzed at the beneficiary level using a Tobit regression technique. The utilization data base consisted of more than 30,000 discharge episode records for the years 1981-86. The post-hospital period for each Medicare beneficiary encompassed the 60 days following discharge from the hospital. Influences on both the level and timing of health care services during this period were appraised. The influence of the prospective payment system was measured through the financial impact and risk that it imposed on the discharging hospital.

Aftercare↗
PubMed2001

Medicare program; changes to the hospital outpatient prospective payment system for calendar year 2002. Final rule.

This final rule revises the Medicare hospital outpatient prospective payment system to implement applicable statutory requirements, including relevant provisions of the Medicare, Medicaid,and SCHIP Benefits Improvement and Protection Act of 2000, 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. This final rule also announces a uniform reduction of 68.9 percent to be applied to each of the transitional pass-through payments.These changes are applicable to services furnished on or after January 1, 2002.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1989

Medicare program; changes to the inpatient hospital prospective payment system and fiscal year 1990 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 describe 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, 1989. 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.↗
PubMed2005

Influence of the prospective payment system on speech-language pathology services.

OBJECTIVE: The present study was performed to determine the clinical effects of the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) on speech and language intervention services and to examine the feasibility of using the federally mandated FIM instrument to establish resource allocation to patients with cognitive, communication, and swallowing disorders. DESIGN: A pre-IRF PPS and post-IRF PPS comparative study was conducted over a 1-yr time interval using data from the American Speech-Language-Hearing Association's National Outcomes Measurement System. Toward this end, the National Outcomes Measurement System's Functional Communication Measures were used to obtain data from 2,631 patients residing in 96 freestanding rehabilitation hospitals or hospitals with rehabilitation units implementing the prospective payment system on or after January 1, 2002. To ensure reliable retrospective and prospective data comparisons, all sites were active participants within the National Outcomes Measurement System program before the introduction of IRF PPS within their facilities. RESULTS: Findings revealed changes in both the utilization of speech-language pathologists and patient outcomes. Under the IRF PPS, there was a clear decline in speech- and language-related lengths of stay. However, clinicians attempted to compensate for these decrements in lengths of stay by increasing the intensity and frequency of their speech and language services. Despite these compensatory efforts, further analyses of the data revealed that under the IRF PPS, fewer patients achieved multiple levels of functional progress in speech and language abilities than before this payment system was implemented. This trend was most noteworthy in the treatment areas of swallowing, motor speech, and memory. In addition, this study revealed that, compared with the National Outcomes Measurement System's Functional Communication Measures, the FIM instrument significantly under-represented and undervalued the extent of a patient's overall progress in recovering from their cognitive, communication, or swallowing disabilities. CONCLUSION: These findings support the notion that the introduction of the IRF PPS has, perhaps unintentionally, caused more patients with cognitive, communication, and swallowing disorders to be discharged from inpatient rehabilitative care with less than adequate functional skill levels. The discouraging results in speech-language pathology utilization and patient outcomes will be useful for clinicians in the future when facing the ongoing challenges of maintaining quality care while streamlining services under the prospective payment system.

Aged↗
PubMedDate not supplied

Impact of Medicare's prospective payment system on hospitals, skilled nursing facilities, and home health agencies: how the Balanced Budget Act of 1997 may have altered service patterns for Medicare providers.

The prospective payment system is one of many changes in reimbursement that has affected the delivery of health care. Originally developed for the payment of inpatient hospital services, it has become a major factor in how all health insurance is reimbursed. The policy implications extend beyond the Medicare program and affect the entire health care delivery system. Initially implemented in 1982 for payments to hospitals, prospective payment system was extended to payments for skilled nursing facility and home health agency services by the Balanced Budget Act of 1997. The intent of the Balanced Budget Act was to bring into balance the federal budget through reductions in spending. The decisions that providers have made to mitigate the impact are a function of ownership type, organizational mission, and current level of Medicare participation. This article summarizes the findings of several initial studies on the Balanced Budget Act's impact and discusses how changes in Medicare reimbursement policy have influenced the delivery of health care for the general public and for Medicare beneficiaries.

Budgets↗
PubMed1986

Controller's role in monitoring prospective payment system.

The challenge for hospital controllers in overseeing the prospective payment system (PPS) lies not in acquiring technical expertise but in working with the chief executive officer to coordinate organizational change. Specifically, the controller should assist in creating a prospective payment committee (PPC)--an interdisciplinary group of executives, middle managers, and medical staff. The PPC's duties, among others, include educating staff about the PPS, development of a productivity reporting system, and review of the responsibility accounting structure.

Financial Management↗
PubMed1988

Accuracy of diagnostic coding for Medicare patients under the prospective-payment system.

Reimbursement of hospitals by Medicare under the prospective-payment system is based on patients' diagnoses as coded at discharge. During the period October 1984 through March 1985, we studied the accuracy of the coding for diagnosis-related groups (DRGs) in hospitals receiving Medicare reimbursement. We used a two-stage cluster method to sample 7050 medical records from 239 hospitals that were stratified according to size. Using blinded techniques with reliability checks, medical-record specialists reabstracted the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) codes to assign correct DRGs to discharged patients. The correct DRGs were then compared with those originally assigned by the physician and the hospital administration. The study revealed an error rate of 20.8 percent in DRG coding. Errors were distributed equally between physicians and hospitals. Small hospitals had significantly higher error rates. Previous studies had found that errors occurred randomly, so that half the errors benefited the hospital financially and half penalized the hospital. The present study found that a statistically significant 61.7 percent of coding errors favored the hospital. These errors caused the average hospital's case-mix index--a measure of the complexity of illness of the hospital's patients--to increase by 1.9 percent. As a result, hospitals received higher net reimbursement from Medicare than was supportable by the medical records. We conclude that "creep" does occur in the coding of DRGs, resulting in overpayment to hospitals for patients covered by Medicare.

Abstracting and Indexing↗
PubMed1985

Challenges in bringing exempt psychiatric services under a prospective payment system.

By December 31, 1985, the Secretary of the Department of Health and Human Services must report to Congress on whether psychiatric programs now exempt from Medicare's prospective payment system can be brought under that system, and if so, how. The underlying issue is determining how funds for psychiatric treatment should be divided up between psychiatric facilities. After discussing the advantages of incorporating psychiatric services into the prospective payment system, the authors review the criteria and methods for evaluating a psychiatric prospective payment system and suggest ways that the current classification and payment systems can be improved. Steps to ease the transition to prospective payment are reviewed, as are issues requiring further research.

Costs and Cost Analysis↗
PubMed2000

Medicare program; prospective payment system for home health agencies. Health Care Financing Administration (HCFA), HHS. Final rule.

This final rule establishes requirements for the new prospective payment system for home health agencies as required by section 4603 of the Balanced Budget Act of 1997, as amended by section 5101 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year 1999 and by sections 302, 305, and 306 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999. The requirements include the implementation of a prospective payment system for home health agencies, consolidated billing requirements, and a number of other related changes. The prospective payment system described in this rule replaces the retrospective reasonable-cost-based system currently used by Medicare for the payment of home health services under Part A and Part B.

Budgets↗