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August 18, 2021

Prospective payment system

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Prospective payment system rates are based on national “average” cost figures. Taking the national average cost into consideration, CMS sets base rates for each PPS. The PPSs then add provisions or adjustments to their system to account for situations where the cost of an individual episode of care or service may be greater or lower than the national average.

Pick three provisions or adjustments from PPSs discussed in Chapter 7. Discuss why that provision or adjustment is needed. What would happen if that provision or adjustment were discontinued? How would this impact facilities or providers? How would this impact the Medicare beneficiary?

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