Medicare Payment Systems

Medicare Payment Systems educational tool explains how each service type payment system works. A Prospective Payment System (PPS) refers to several payment formulas when reimbursement depends on predetermined payment regardless of the intensity of services provided. Medicare bases payment on codes using the classification system for that service (such as diagnosis-related groups for hospital inpatient services and ambulatory payment classification for hospital outpatient claims).

This tool explains the inpatient hospitals, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, ambulatory surgical centers, durable medical equipment, prosthetics, orthotics, and supplies, home health, and skilled nursing facilities payment systems.