Essay on Medicare Part A Payment System

Essay on Medicare Part A Payment System

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Medicare part A payment reimbursement is done through a Prospective payment system (PPS). Under the PPS Medicare payment is based on a predetermined, fixed amount. In order to determine the payment amount for a particular service different classification systems are used based on setting type 6. In fact, Centers for Medicare & Medicaid services (CMS) use separate PPSs all together for reimbursement to acute inpatient hospitals, home health agencies, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, and skilled nursing facilities 6. Since implementation of the PPS to each of these settings, healthcare providers (i.e. Physical Therapists) have faced many challenges. This paper will compare the PPS for the inpatient acute care setting, with that of home health care, as well as discuss some of the challenges the PPS has created for Physical Therapists.
The Medicare Part A payment system for acute care is referred to as the Inpatient Prospective Payment System (IPPS) 1. The IPPS covers patients for 90 days of care per episode of illness, with a 60-day lifetime reserve 2. Episodes begin once the patient is admitted and ends after they have been out of the hospital for 60 days straight 2. During the first 60 days of hospital stay, patients are responsible for a deductible of $1,216 2 while Medicare covers the rest. After day 60, patients must begin copayments, starting at $304, through day 90. After 150 days od care patients are responsible for 100% of costs 2. Comparatively, under the Home Health Prospective payment system (HH PPS), patients are not required to make any copayments for the services provided 4. Home Health care is covered for beneficiaries restr...


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...l therapists need to go to greater lengths in order to justify that the treatments they are implementing are appropriate for the patient instead of overutilization of resources. In fact, the HH PPS included a lengthy requirement on therapy coverage criteria to insure that therapy services provided in the home are appropriate 7. As a result, therapists deal with increased documentation demands under time restraints.

Despite the differences between the IPPS and HH PPS, both systems share the same goal of limiting overutilization of services and ultimately delivering appropriate and quality care to the patients. Medicare continues to focus on improving the quality of patient care. Through the implementation of the Prospective Payment System, Medicare has attempted to create incentive for healthcare providers to not only share but also practice this very same mission.

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