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PubMed1998

Medicare program; changes to the hospital inpatient prospective payment systems and fiscal year 1999 rates--HCFA. Proposed rule.

We are proposing to revise the Medicare hospital inpatient prospective payment systems for operating costs and capital-related costs to implement applicable statutory requirements, including section 4407 of the Balanced Budget Act of 1997, as well as changes arising from our continuing experience with the systems. In addition, in the addendum to this proposed rule, we are describing proposed changes in the amounts and factors necessary to determine rates for Medicare hospital inpatient services for operating costs and capital-related costs. These changes would be applicable to discharges occurring on or after October 1, 1998. We are also setting forth proposed rate-of-increase limits as well as proposing changes for hospitals and hospital units excluded from the prospective payment systems.

Capital Expenditures↗
PubMed1996

Achieving short-term Medicare savings through the expansion of the prospective payment system.

This article addresses the introduction of competition into the Medicare prospective payment system (PPS), the application of aa expanded PPS to ensure that Medicare is not paying more than the market price for comparable services, the expansion of the Medicare PPS to outpatient services, and the expansion of the Medicare PPS to physician fees for inpatient care.

Ambulatory Care↗
PubMed1987

Effect of the Medicare prospective payment system on the utilization of physical therapy.

The purpose of this study was to examine the effect of the Medicare prospective payment system on the utilization of physical therapy for patients served by Medicare. The total number of inpatient and outpatient physical therapy referrals and the percentage of physical therapy Medicare referrals from January 1981 through May 1985 for the 336 acute care beds in the county selected for this study were analyzed. The results indicated that acute care inpatient and outpatient physical therapy Medicare referrals have increased significantly since the implementation of the diagnostic related group system. The results indicate that physical therapy is being used increasingly to rehabilitate patients within the time and economic constraints established by the Medicare prospective payment system.

Aged↗
PubMed1989

Occupational adjustment of the prospective payment system wage index.

In this article, the bias in the Medicare prospective payment system (PPS) hospital wage index that results from its failure to hold hospital occupation mix constant is examined. On average, the difference between the current PPS wage index and a fixed-occupation-mix Laspeyres index is small, approximately 2 percent. However, occupation-mix distortions are substantially larger for a small proportion of labor market areas, especially some in the South. Biases in the wage index resulting from its failure to appropriately account for labor substitution and intra-occupational worker characteristics are also analyzed but are not found to be significant.

Abstracting and Indexing↗
PubMed1986

Medicare program; fiscal year 1986 changes to the inpatient hospital prospective payment system--HCFA. Interim final rule comment period.

This interim final rule sets forth revisions to the Medicare inpatient hospital prospective payment system. This rule is needed to implement those portions of sections 9101 through 9105 and 9112 of the Consolidated Omnibus Budget Reconciliation Act of 1985 having an effective date of May 1, 1986 or earlier. The changes required by this legislation affect the fiscal year 1986 prospective payment rates; the rate-of-increase limits (target amounts) for hospitals excluded from the prospective payment system; the length of the transition period and the method of payment; application of the hospital wage index; payment for the indirect costs of medical education; and payments for hospitals that serve a disproportionate share of low-income patients.

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

Changing patterns of hip fracture care before and after implementation of the prospective payment system.

We tested the hypothesis that since the implementation of the prospective payment system (PPS), elderly patients hospitalized for hip fractures receive shorter, less care-intensive hospitalizations and are more frequently institutionalized. In blinded fashion, we reviewed the charts of elderly patients with hip fractures admitted to a municipal hospital from 1981 through 1985. Demographic and clinical characteristics of patients treated before implementation of the PPS were similar to patients treated thereafter. After implementation of the PPS, the mean length of hospitalization fell from 16.6 to 10.3 days, and the mean number of physical therapy sessions received decreased from 9.7 to 4.9. Concomitantly, the proportion of patients discharged to a nursing home increased (21% to 48%), as did the proportion receiving nursing home care at six months after discharge (13% to 39%). This increase in long-term nursing home placement suggests that the quality of care for elderly patients with hip fractures may have deteriorated.

Aged↗
PubMed2005

Rehabilitation services after the implementation of the nursing home prospective payment system: differences related to patient and nursing home characteristics.

BACKGROUND: The prospective payment system (PPS) for nursing homes was designed to curtail the rapid expansion of Medicare costs for skilled nursing care. This study examines the changes that occurred in nursing home patients and rehabilitation services following the PPS. SETTING: Free-standing Medicare and/or Medicaid certified nursing homes in Ohio. PRIMARY OUTCOMES: The percent of new admissions receiving therapy and the amount of rehabilitation therapy provided. SAMPLE: A total of 7006 first admissions in 1994-6 (pre-PPS) and 61,569 first admissions in 2000-1 (post-PPS). METHODS: A logistic model predicting likelihood of rehabilitation was developed and validated in pre-PPS admissions and applied to the post-PPS patients. Rehabilitation services were compared in the pre-PPS and post-PPS cohorts overall, stratified by quintile of predicted score, diagnosis group, and by nursing home profit status. RESULTS: Post-PPS patients had less cognitive impairment, more depression, and more family support. The amount of rehabilitation services declined the most in the higher quintiles of predicted likelihood of rehabilitation and among patients with stroke. The percent of patients receiving rehabilitation services increased the most in the lowest quintile and among patients with medical conditions. These changes were greater in for-profit nursing homes. CONCLUSIONS: The implementation of the PPS in nursing homes has been associated with a decrease in the amount of rehabilitation services, targeted at those predicted to receive higher amounts and an increased frequency of providing services targeted at those predicted to be less likely to receive them. The outcomes of the changes deserve further study.

Aged↗
PubMed2000

Medicare program; prospective payment system for hospital outpatient services. Health Care Financing Administration (HCFA), HHS. Interim final rule with comment period.

This interim final rule with comment period provides for the annual update to the Medicare hospital outpatient prospective payment system conversion factor that is used to calculate the payment amount for each payment group, effective January 1, 2001. It also updates the wage index values and incorporates the year 2001 changes in the procedure codes that are used to make payments under this system. In this rule, we are also responding to public comments received on those portions of the April 7, 2000 final rule with comment period (which established the hospital outpatient prospective payment system) that implemented related provisions of the Balanced Budget Refinement Act (BBRA) of 1999. In addition, we are responding to public comments on the August 3, 2000 interim final rule with comment period that modified the April 7, 2000 final rule with comment period by revising the criteria used to define new or innovative medical devices, drugs, and biologicals eligible for transitional pass-through payments and correcting the criteria for grandfathering provider-based Federally Qualified Health Centers (FQHC) into the prospective payment system.

Ambulatory Care↗
PubMed1990

Measuring quality of care with explicit process criteria before and after implementation of the DRG-based prospective payment system.

We developed explicit process criteria and scales for Medicare patients hospitalized with congestive heart failure, myocardial infarction, pneumonia, cerebrovascular accident, and hip fracture. We applied the process scales to a nationally representative sample of 14,012 patients hospitalized before and after the implementation of the diagnosis related group-based prospective payment system. For the four medical diseases, a better process of care resulted in lower mortality rates 30 days after admission. Patients in the upper quartile of process scores had a 30-day mortality rate 5% lower than that of patients in the lower quartile. The process of care improved after the introduction of the prospective payment system; eg, better nursing care after the introduction of the prospective payment system was associated with an expected decrease in 30-day mortality rates in pneumonia patients of 0.8 percentage points, and better physician cognitive performance was associated with an expected decrease in 30-day mortality rates of 0.4 percentage points. Overall, process improvements across all four medical conditions were associated with a 1 percentage point reduction in 30-day mortality rates after the introduction of the prospective payment system.

Aged↗
PubMed1998

Medicare program; prospective payment system and consolidated billing for skilled nursing facilities--HCFA. Interim final rule with comment period.

This interim final rule implements provisions in section 4432 of the Balanced Budget Act of 1997 related to Medicare payment for skilled nursing facility services. These include the implementation of a Medicare prospective payment system for skilled nursing facilities, consolidated billing, and a number of related changes. The prospective payment system described in this rule replaces the retrospective reasonable cost-based system currently utilized by Medicare for payment of skilled nursing facility services under Part A of the program.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed2006

The origins, development, and passage of Medicare's revolutionary prospective payment system.

This article explains the origins, development, and passage of the single most influential postwar innovation in medical financing: Medicare's prospective payment system (PPS). Inexorably rising medical inflation and deep economic deterioration forced policymakers in the late 1970s to pursue radical reform of Medicare to keep the program from insolvency. Congress and the Reagan administration eventually turned to the one alternative reimbursement system that analysts and academics had studied more than any other and had even tested with apparent success in New Jersey: prospective payment with diagnosis-related groups (DRGs). Rather than simply reimbursing hospitals whatever costs they charged to treat Medicare patients, the new model paid hospitals a predetermined, set rate based on the patient's diagnosis. The most significant change in health policy since Medicare and Medicaid's passage in 1965 went virtually unnoticed by the general public. Nevertheless, the change was nothing short of revolutionary. For the first time, the federal government gained the upper hand in its financial relationship with the hospital industry. Medicare's new prospective payment system with DRGs triggered a shift in the balance of political and economic power between the providers of medical care (hospitals and physicians) and those who paid for it--power that providers had successfully accumulated for more than half a century.

Blue Cross Blue Shield Insurance Plans↗
PubMed1987

Medicare discharges by facility status under the prospective payment system, 1984-86.

When the Health Care Financing Administration implemented the Medicare prospective payment system (PPS), several types of hospitals and hospital units were excluded from the new reimbursement system, and they remained under the reasonable cost reimbursement system, subject to the target rate of increase limits. The implementation of PPS has been accompanied by several changes in hospital classification and in utilization patterns. This article examines some of these changes based on excluded facility counts and discharges by facility status under the PPS for fiscal years 1984-86.

Data Collection↗
PubMed2005

Medicare program; inpatient rehabilitation facility prospective payment system for FY 2006. Final rule.

This final rule will update the prospective payment rates for inpatient rehabilitation facilities for Federal fiscal year 2006 as required under section 1886(j)(3)(C) of the Social Security Act (the Act). Section 1886(j)(5) of the Act requires the Secretary to publish the classification and weighting factors for the inpatient rehabilitation facilities case-mix groups and a description of the methodology and data used in computing the prospective payment rates for that fiscal year. In addition, we are implementing new policies and are changing existing policies regarding the prospective payment system within the authority granted under section 1886(j) of the Act.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed2004

Association of hospital ownership with patient transfers to outpatient care under a prospective payment system in Taiwan.

Case payment, a prospective payment system akin to diagnosis-related groups (DRGs) has in-built incentives for hospitals to transfer inpatients to their own ambulatory care units following early discharge. This study used nation-wide inpatient claims data on a total of 100,730 patients treated in 2000 in (Taiwan): cesarean section (59,364 cases), femoral/inguinal hernia operation (18,675 cases), and hemorrhoidectomy (22,691 cases), all reimbursed by case payment, to explore the relationship between hospital ownership and patient transfers to outpatient treatment. For all three diagnoses, for-profit (FP) hospitals not only had lower lengths of stay (LOS) compared to public hospitals, but also showed very high odds of patient transfer to their own outpatient units, after controlling for institutional variables, (hospital level, teaching status, and geographic location), hospital competitive environment (the Herfindal-Hirschman index), and patient variables (gender, age, length of stay, and number of secondary diagnoses, a proxy for severity of illness). Similar, though slightly lower odds were observed with not-for-profit (NFP) hospitals relative to public hospitals. The findings support the property rights theory, suggesting that in Taiwan, institutional profit maximization motives may be driving patient transfers under the case payment diagnoses, rather than medical care needs. In NFP hospitals, their physician compensation mechanism, driven largely by care volumes provided by each physician, appears to be driving the disproportionately greater likelihood of patient transfer to outpatient care.

Adult↗
PubMed1987

Prospective payment system and quality: early results and research strategy.

The implementation of the prospective payment system (PPS) in Medicare has raised concerns in both the public and private health sectors about the potential for compromised quality of care resulting from the financial incentives inherent in the system. As part of this concern, Congress has mandated annual reports from the Health Care Financing Administration (HCFA) on the impact of PPS, including the impact on Medicare beneficiaries. In order to meet this mandate, HCFA has initiated several studies concerning quality of care issues. Those activities and selected results from the 1985 PPS impact report are presented in this article.

Data Collection↗
PubMed1989

Profits and fiscal pressure in the prospective payment system: their impacts on hospitals.

For hospitals that were under Medicare's Prospective Payment System (PPS) for one and two years in their 1985 fiscal year, this paper examines how variation in the fiscal pressure PPS imposed affected expenditures and other aspects of behavior. The analysis shows that in hospitals' second as well as first year on PPS, hospitals under greater pressure experienced greater behavioral change. However, second year changes were far smaller than changes in the system's first year. Evidence that variation in pressure reflects factors in addition to hospitals' relative efficiency and may undermine rather than promote appropriate cost containment leads the authors to propose modifications in PPS methods.

Costs and Cost Analysis↗