Question

D Question 13 2 pts Which of the following statements about prospective payments is false? Prospective payment: Is determined at the end of the treatment. Is a fixed amount determined beforehand. May be bundled, based on per episode of care. May be per diagnosis May be per diem (day).

Answer 1

A Prospective Payment System is referred to different methodologies of payment for which their remains a predetermined payment which is to be reimbursed regardless of intensity and cost of the actual service.

It includes a system of payment to the hospitals on the basis of a predetermined price from Medicare. The payments are normally based on different codes created and imposed by the health care organisations. Some of the codes are as follows: Diagnosis, Ambulatory payment Classification etc.

This payment system was established by Centers for Medicare and Medicaid services (CMS), by Social Security Amendment Act 1983 made specially for hospital care.

The fixed payment system regardless of intensity services was made specially to encourage hospitals to reduce their expense of treatment.

In the year 2000 CMS changed reimbursement policy for outpatient care at Federally Qualified Health centers (FQHCS) for Medicaid and Medicare. In this system health centers and hospitals receive a fixed payment [per visit from any patient registered under Medicaid regardless of severity and expense of treatment. The per visit rate is fixed for Medicaid to individual hospital and health center location. It is determined by a financial accounting process made by State Medicaid Agencies. On the contrary the rate of FQHCS PPS for medicare is fixed at the same level in different hospitals and healthcare centers.

The methodology of payment includes:

• Health organisations that do not receive federal grant by Public Health Service Act under section 330.
• Indian Health Service and health centers.
• Rural Health Organisations.

Hence the false statement is the first statement which states that "It is determined at the end of treatment" Prospective Payment system is such a system in which the payment is fixed and it is determined before the start of the treatment which means it is a predetermined payment system based on some codes.