Prospective payment system
Prospective Payment System (PPS)
Prospective Payment System (prəˈspɛktɪv ˈpeɪmənt ˈsɪstəm) is a method of reimbursement in which Medicare payment is made based on a predetermined, fixed amount. The payment amount for a particular service is derived based on the classification system of that service (for example, Diagnosis-Related Groups for inpatient hospital services).
Etymology
The term "Prospective Payment System" originates from the method's approach to payment. "Prospective" refers to the predetermined nature of the payment rates, and "Payment System" refers to the method of reimbursement.
Related Terms
- Diagnosis-Related Groups (DRGs): A system to classify hospital cases into one of approximately 500 groups, also referred to as DRGs, expected to have similar hospital resource use.
- Medicare: A national health insurance program in the United States, begun in 1966 under the Social Security Administration and now administered by the Centers for Medicare and Medicaid Services.
- Reimbursement: The act of compensating someone for an out-of-pocket expense by giving them an amount of money equal to what was spent.
- Centers for Medicare and Medicaid Services (CMS): A federal agency within the United States Department of Health and Human Services that administers the nation’s major healthcare programs.
See Also
- Fee-for-service
- Capitation (healthcare)
- Healthcare Financial Management Association
- Healthcare reimbursement
External links
- Medical encyclopedia article on Prospective payment system
- Wikipedia's article - Prospective payment system
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