Prospective Payment System

Publication Title: 
Health Services Research

OBJECTIVE: This research addresses the following types of responses by hospitals to increased financial risk: (a) increases in prices to privately insured patients (testing separately the effects of risk from the effects of "cost-shifting" that depends on level of Medicare payment in relation to case mix-adjusted cost); (b) changes in service mix offered and selectivity in acceptance of patients to reduce risk; and (c) efforts to reduce variation in resource use for those patients admitted.

Author(s): 
Friedman, B.
Farley, D.
Publication Title: 
Health Services Research

BACKGROUND: Fiscal constraints faced by Medicare are leading to policies designed to reduce expenditures. Evidence of the effect of reduced reimbursement on the mortality of Medicare patients discharged from all major hospital service lines is limited. METHODS: We modeled risk-adjusted 30-day mortality of patients discharged from 21 hospital service lines as a function of service line profitability, service line time trends, and hospital service line and year-fixed effects. We simulated the effect of alternative revenue-neutral reimbursement policies on mortality.

Author(s): 
Lindrooth, Richard C.
Konetzka, R. Tamara
Navathe, Amol S.
Zhu, Jingsan
Chen, Wei
Volpp, Kevin
Publication Title: 
Health Economics

Post-acute care provided by skilled nursing facilities (SNFs) is reimbursed by Medicare under a prospective payment system using resource utilization groups (RUGs) that adjust payment intensity on the basis of predefined ranges of weekly therapy minutes provided and the functionality of the patient. Individual RUGs account for differences in the intensity of care provided, but there exists significant regional variation in the payments SNFs receive from Medicare due to the use of geographic adjustment factors.

Author(s): 
Bowblis, John R.
Brunt, Christopher S.
Publication Title: 
Federal Register

This final rule with comment period addresses certain provisions of the Tax Relief and Health Care Act of 2006, as well as making other proposed changes to Medicare Part B payment policy. We are making these changes to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services.

Author(s): 
Centers for Medicare & Medicaid Services (CMS), HHS
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