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IPPS, OPPS, MPFS and DMEPOS

Research and discuss the differences and importance of : IPPS, OPPS, MPFS and DMEPOS. Which provider type is paid by which method? What are the payment expectations for each type? What is the potential implication of a case mix involving IPPS, OPPS and DMEPOS for a small hospital?

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The Influence and Importance of a Diversified Case Mix in Small Hospitals

The Centers for Medicare and Medicaid Services (CMS) have several different categories of reimbursement. These groupings are based upon the setting where the services are rendered (AHIMA, 2013). Medicare Part A services are paid through a PPS reimbursement method. The acronym PPS stands for prospective payment system (AHIMA, 2013). Prior to PPS, Medicare services were reimbursed using a retrospective Fee-For-Service. According to Cohen and Hanft (2004), this method allowed hospitals to charge for an unlimited amount of technology with no concern of cost. In 1983, The Social Security Reform Act was passed which implemented the use of a case mix, DRG's through the Prospective Payment System (Lave, 1989).

The PPS method uses Diagnosis-Related Groups (DRG's) to assess a base payment scale of reimbursement (CMS, 2013). Reimbursement is based on the "average resources used to treat Medicare patients in that DRG" (CMS, 2013, para 1). This system discourages hospitals from running unnecessary tests due to the limited amount of reimbursement being received (Luft, 1998). This system was put into place as a reimbursement methodology based on a "case mix adjusted, flat-rate basis" (US Department of Health and Human Services, 1988, para 2). PPS is focused on providing quality care with a focus on reducing patient's length of stay within the acute care setting (US Department of Health and Human Services, 1998). IPPS is the portion of care that is delivered in the acute setting on an inpatient basis (AHIMA, 2013). OPPS is that portion of acute hospital services that are provided on an outpatient basis (AHIMA, 2013).

Medicare Part B services are paid through a MPFS system. This acronym stands for Medicare Physician Fee Schedule (Department of Health and Human Services, 2013).

The following formula illustrates the components that determine ...

Solution Summary

The difference and importance of IPPS, OPPS, MPFS and DMEPOS are discussed. The payment expectations for each type are given.

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