Prospective Payment System (PPS) and
Health Insurance Handout
What is a PPS? - answer A system in which the amount that will be paid is determined
BEFORE services are rendered
PPS is one of the ways private sector and the government sector manage care
Explain each private sector prospective payment system
Managed care organizations (MCO):
Inpatient services:
Outpatient rehabilitation series: - answerMCOs set a rate of payment with the providers
prior to the delivery of service
For inpatient services, this rate, usually a per diem (per day), covers all services - as
such, the provider takes the risk that the agreed-upon rate of payment will be sufficient
to cover all services provided
Outpatient rehab services are usually based on a negotiated reduced fee-for-service
rate as well as the number of treatment visits allowed
Access to rehabilitation services is controlled by the client's ___. - answerPCP
T/F
MCO case managers monitor the effectiveness of rehabilitation once it begins and
make recommendations to the PCP as to whether continued rehabilitation should be
authorized. - answerTrue
In 1997, congress passed the Balanced Budget Act (BBA). What did this do? -
answerMandated the Health Care Financing Agency (HCFA) to reduce Medicare
expenditures by approximately 15 billion dollars over a five-year period
To accomplish this, HCFA determined that it must follow the path taken by the private
sector
It recognized that it must shift the method of payment from a cost-based system to a
PPS
The Medicare PPS systems were originally scheduled as:
PPS for rehabilitation services in skilled nursing facilities to be implemented:
Health Insurance Handout
What is a PPS? - answer A system in which the amount that will be paid is determined
BEFORE services are rendered
PPS is one of the ways private sector and the government sector manage care
Explain each private sector prospective payment system
Managed care organizations (MCO):
Inpatient services:
Outpatient rehabilitation series: - answerMCOs set a rate of payment with the providers
prior to the delivery of service
For inpatient services, this rate, usually a per diem (per day), covers all services - as
such, the provider takes the risk that the agreed-upon rate of payment will be sufficient
to cover all services provided
Outpatient rehab services are usually based on a negotiated reduced fee-for-service
rate as well as the number of treatment visits allowed
Access to rehabilitation services is controlled by the client's ___. - answerPCP
T/F
MCO case managers monitor the effectiveness of rehabilitation once it begins and
make recommendations to the PCP as to whether continued rehabilitation should be
authorized. - answerTrue
In 1997, congress passed the Balanced Budget Act (BBA). What did this do? -
answerMandated the Health Care Financing Agency (HCFA) to reduce Medicare
expenditures by approximately 15 billion dollars over a five-year period
To accomplish this, HCFA determined that it must follow the path taken by the private
sector
It recognized that it must shift the method of payment from a cost-based system to a
PPS
The Medicare PPS systems were originally scheduled as:
PPS for rehabilitation services in skilled nursing facilities to be implemented:
