A Prospective Payment System (PPS) 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). CMS uses separate PPSs for reimbursement to acute inpatient hospitals, home health agencies, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, and skilled nursing facilities. See Related Links below for information about each specific PPS. Show
Zipcode to Carrier Locality FileThis file is primarily intended to map Zip Codes to CMS carriers and localities. This file will also map Zip Codes to their State. In addition, this file contains an urban, rural or a low density (qualified) area Zip Code indicator. Provider CenterFor a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) providers, including physicians, other practitioners and suppliers, go to the Provider Center (see under "Related Links" below). Updated 1/20/2018
The following original NCSL Issue brief has been distributed to legislators and legislative staff across the country. Episode-of-Care Payments - PDF File |Colorado Supplement: Episode-of-Care Payments - PDF File To read portable document format (.PDF) files, use Adobe Acrobat Reader. Cost Containment Strategy and LogicEpisode-based payments are at an early stage of development and use, but interest in them is growing. In contrast to
traditional fee-for-service reimbursement where providers are paid separately for each service, an episode-of care payment covers all the care a patient receives in the course of treatment for a specific illness, condition or medical event. Examples of episodes of care for which a single, bundled payment can be made include all physician, inpatient and outpatient care for a knee or hip replacement, pregnancy and delivery, or heart attack. Savings
can be realized in three ways: 1) by negotiating a payment so the total cost will be less than fee-for-service; 2) by agreeing with providers that any savings that arise because total expenditures under episode-of-care payment are less than they would have been under fee-for-service will be shared between the payer and providers; and/or 3) from savings that arise because no additional payments will be made for the cost of treating complications of care, as
would normally be the case under fee-for-service. Summary of Health Cost Containment and Efficiency Strategies- Brief #3- Episode-of-Care Payments
Bundled Payments Recent Updates & Publications - 2012-2017 (Use as a supplement to the PDF above)
The Department of Health and Human Services (HHS) has proposed eliminating mandatory bundled payment in several areas of healthcare including cardiac care and joint replacement, according to a rule title posted Aug. 10, 2017. Few details were known initially about the proposed rule as the only information publicly available is the title, “Cancellation of Advancing Care Coordination through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model.” 8/14/2017
New Affordable Care Act initiative, designed to improve quality and cost, gives doctors and patients more control over health care delivery The Centers for Medicare & Medicaid Services (CMS), on April 11, 2016 "announced its largest-ever initiative to transform and improve how primary care is delivered and paid for in America. The effort, the Comprehensive Primary Care Plus (CPC+) model, will be implemented in up to 20 regions and can accommodate up to 5,000 practices, which would encompass more than 20,000 doctors and clinicians and the 25 million people they serve. The initiative is designed to provide doctors the freedom to care for their patients the way they think will deliver the best outcomes and to pay them for achieving results and improving care." It builds on the Comprehensive Primary Care initiative launched in late 2012. For more information about the CPC+ model, see a fact sheet from CMS. 4/11/2016.
The federal BPCI program is summarized by CMS as follows:
About this NCSL project NCSL’s Health Cost Containment and Efficiency Series describes two dozen alternative policy approaches, with an emphasis on documented and fiscally calculated results. The project is housed at the NCSL Health Program in Denver, Colorado. It is led by Richard Cauchi (Program Director) and Martha King (Group Director) with Ashley Noble providing updated research (2013-present). Barbara Yondorf was lead researcher (2009-2012). NCSL gratefully acknowledges the financial support for this publication series from 2010-2012 by The Colorado Health Foundation and Rose Community Foundation of Denver, Colorado What's one type of episode of care reimbursement?One strategy, called bundled payment, assigns a fixed payment to cover a set of services, such as a surgery or a patient's diabetes care, over a defined time period. Bundled payments encourage providers to manage costs, while meeting standards of high-quality care.
What is episodeEpisode-based payments are structured to provide a discounted payment or set a pre-determined price against which actual payments are retrospectively reconciled, that is specific to conditions for a discrete timeframe (referred to as a target price).
What are the different types of payment systems in healthcare?Four payment methods (fee-for-service, discounted fee-for-service, capitation, and salary) and three payment adjustments (withholds, bonuses, and retrospective utilization targets) are the basis for nearly all contracts between health plans and your physicians, and they are described below.
Which is a predetermined payment amount for all service provided during an episode of care?A Prospective Payment System (PPS) 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).
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