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Out Patient Prospective Payment Essay

1417 words - 6 pages

Medicare uses the Medicare Physician Fee Schedule to pay physicians and the Outpatient Prospective Payment System to pay hospitals and other outpatient facilities. Recently, the Centers for Medicaid and Medicare Services (CMS) made changes to physician and outpatient payments. The five levels clinic visit codes or five outpatient codes were replaced with a single code. “The Chronic Care Management Fee will go into effect in January 2014 and will be the new form of physician compensation. Bundle Payment is a way for paying for high volume, high cost hospital procedures. Global payment enables providers to reduce unnecessary care and bring down spending under control but creates incentives for providers to restrain the supply of services.

PHYSICIANS AND OUTPATIENT MEDICARE METHODS OF PAYMENTS 3
Introduction
Medicare uses the Medicare Physician Fee Schedule to pay physicians and the Outpatient Prospective Payment System to pay hospitals and other outpatient facilities. Recently, the Centers for Medicaid and Medicare Services (CMS) made changes to physician and outpatient payments. The five levels clinic visit codes or five outpatient codes were replaced with a single code. The Chronic Care Management Fee will go into effect in January 2014 and will be the new form of physician compensation. “These changes are essential if we're going to create a healthcare system that delivers better care at lower cost," Blum (2013). Bundle Payment is a way for paying for high volume, high cost hospital procedures. Global payment enables providers to reduce unnecessary care and bring down spending under control but creates incentives for providers to restrain the supply of services.
Difference in Physician and Outpatient Payment System
Medicare uses the Medicare Physician Fee Schedule (MPFS) or list of prices to pay for physician services. This payment is made based on a set rate under Medicare Part B. In determining these payment rates, the Centers for Medicaid and Medicare (CMS) takes into consideration the “amount of work required to provide a service, expenses related to maintaining a practice, and liability insurance costs,” Wilensky (2009) .Medicare on the other hand uses the Outpatient Prospective System Payment (OPPS) to pay for outpatient services. Under this system, Medicare pays hospitals and outpatient facilities a set of amount known as the payment rate.
PHYSICIANS AND OUTPATIENT MEDICARE METHODS OF PAYMENTS 4
The OPPS “sets payments for individual services using a set of relative weights, a conversion factor, and adjustments for geographic differences in input prices”, Payment Basics (2012) . Under this system, hospitals can receive extra payments known as outlier payments for extra expenditures and pass-through payments for new...

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