Prospective Payment System Assignment

Running head: PROSPECTIVE PAYMENT SYSTEM
Prospective Payment System
Name of the student
Name of the university
Author’s name

PROSPECTIVE PAYMENT SYSTEM1
Question 1
A Prospective Payment System (PPS) is an approach of reimbursement used in the
healthcare settings which is done according to the fixed amount, predetermined. The payment
paid for any specific service depends on that service’s classification system. The principle behind
the Retrospective payment system was that the amount that had to be paid was depended on what
the healthcare professional charged or the amount charged for using any service or services
(Medicare & Medicaid Services (CMS), 2017).
Question 2
The IPPS system charges based on the inpatient case or per inpatient discharge basis. It
ensures that the patients receive proper care based on the right price. There are three factors that
enabled the prospective payment in Medicare inpatient payment –
 Standardized payable amount
 Wage Index
 Weighting factor for each DRG
Question 3
The centers for Medicare and Medicaid services (CMS) allots discharges to DRGs. DGR
assignment is determined by the primary diagnosis of the patient and till 24 secondary diagnosis
that includes any other complications or comorbidities. A total of 25 procedures supplied during
hospital stay impacts DRG including patient’s gender, age and the status of discharge. CMS
evaluates the DRG definition annually for ensuring that every groups continue including
clinically similar cases and similar conditions that require considerable rate of inpatient resources
Centers for (Medicare & Medicaid Services (CMS), 2017).