What is prospective payment system? - Payment for all care delivered during an episode of care based
on pre-determined fixed amount (DRGs). Influenced by care setting.
What are the 4 types of Prospective Payment Systems? - Capitation, global payment method, case-rate
methodology, and bundled payment.
Capitation - System of payment used by managed care plans in which physicians and hospitals are paid a
fixed, per capita amount for each patient enrolled over a stated period regardless of the type and
number of services provided; reimbursement to the hospital on a per-member/per-month basis to cover
costs for the members of the plan. (PMPM)
Global Payment Method - Third-party payer makes one combined payment to cover the services of
multiple providers who are treating a single episode of care.
Case-Rate Method - Reimburses provider for all services provided during entire encounter or visit,
regardless of length of stay. Based on typical costs of condition, and is usually used in inpatient
admissions.
Bundled Payment - Reimbursement methodology where a predetermined payment amount is provided
for all services required for a single predefined episode-of-care.
Retrospective payment system - Type of fee-for-service reimbursement in which providers receive
recompense after health services have been rendered
fee-for-service - a system under which doctors and hospitals receive a payment for each service they
provide
Risk-adjusted payment - introduced under ACA, shifts burden of risk for treating high-risk patients to be
shared by all insurers. Meant to make premiums the same.
ACA - Affordable Care Act
Risk score - indicates how costly an individual may be relative to the average beneficiary
CMS-HCC - Centers for Medicare & Medicaid Services-Hierarchical Condition Category
CMS-HCC payment - uses patient demographic and medical info to predict cost
HCC - Hierarchical Condition Categories
, Hierarchical Condition Categories - Since 2004, HCCs have been used by the Centers for Medicare and
Medicaid Services (CMS) as part of a risk-adjustment model that identifies individuals with serious acute
or chronic conditions.
CMS - Centers for Medicare and Medicaid Services
What are the current valid code sets? - ICD-10 CM and PCS, CPT, HCPCS, and NDC
!CD-10-CM is maintained by - NCHSq
NCHS - National Center for Health Statistics
ICD-10-PCS is maintained by - CMS
CMS - Centers for Medicare and Medicaid Services
Official coding guidelines are promulgated by the following 4 parties - AHA, AHIMA, NCHS, and CMS.
AHA - American Hospital Association
AHIMA - American Health Information Management Association
who maintains CPT - American Medical Association (AMA)
What are HCPCS Level 1 codes? - CPT codes
What are HCPCS Level II codes used for? - They were established to report services, supplies, and
procedures not represented in CPT.
PDPM - patient driven payment model
What is PDPM and where is it used? - Patient driven payment model is used in SNF(skilled nursing
facilities) and uses case-mix variables. It focuses more on the patient.
Minimum Data Set (MDS) - a report that focuses on the degree of assistance or skilled care that each
resident of a long-term care facility needs, required reporting
PDGM - patient driven groupings model
What is PDGM and where is it used? - Patient Driven Groupings Model is used in HHAs(Home Health
Agencies) and utilizes case-mix groupings and patient driven models similar to PDPM.
Payment unit for PDGM is how many days - 30, but days to recertify is 60.
APC - Ambulatory Payment Classification
RBRVS - Resource Based Relative Value Scale
RVU - Relative Value Unit
What are the two types of outpatient PPS? - OPPS and ASC(Ambulatory Service Center, outside of the
hospital)
Each CPT and HCPCS code is assigned to what? - An APC and corresponding payment status indicator
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