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Medicare reimbursement to health care providers

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Explain how Medicare reimburses health care providers.

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The solution provides an explanation of how health care providers are reimbursed by Medicare. It includes several references.

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TOPIC 2
Explain how Medicare reimburses health care providers.

Medicare reimbursement is about repayment or compensation made to the health care provider for services provided to eligible clients. Just as the term indicates - reimbursement claims can only be made for services already provided by the health care provider - there is no payment made in advance of service provision (Casto 2006).

Prospective payment system (PPS): The PPS is a method employed to reimburse health care providers such as hospitals with a payment that is based on a predetermined cost for individual diagnosis-related groups (DRGs) (DHHS 2011). The DRG is a classification system categorizing all human illnesses taking according to the affected organ system, surgical procedures, the morbidity and the gender of the patient (Janeba, 2008). Separate prospective payment systems are used for the different types of hospitals, e.g. acute inpatient hospitals, home health agencies, hospital outpatient and so on, and the ...

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