Which of the following reimbursement methodologies determines payment before services are received?
A.prospective payment system
b. retrospective payment system
c. fee-for-service payment system
d. capitation system
The correct option is A. Prospective Payment System.
To determine the answer, we need to understand the various reimbursement methodologies used in healthcare. Let's break down each option and see how they work:
A. Prospective Payment System (PPS): In this system, payment is determined in advance based on a predetermined rate for a particular service or procedure. The reimbursement amount is fixed and does not depend on the actual cost of providing the service. It is commonly used in settings like hospitals, where payment rates are set based on the diagnosis-related group (DRG) or other classification systems.
B. Retrospective Payment System: This method determines payment after services have been provided. Providers submit claims to the payer, who then evaluates the claims and reimburses based on a predetermined fee schedule. The payment is made based on the actual costs incurred, including any agreed-upon discounts or negotiated rates.
C. Fee-for-Service Payment System: In this traditional reimbursement model, payment is made for each service delivered. Providers bill for individual services rendered, and reimbursement is based on the fee schedule negotiated with the payer or the Medicare/Medicaid fee schedule. The payment is made after services have been provided and documented.
D. Capitation System: Under a capitation system, healthcare providers are paid a fixed amount per patient per month or per year regardless of the services provided. The payer pays a predetermined rate regardless of the actual cost or utilization of services.
Based on these definitions, the option that determines payment before services are received is the Prospective Payment System (PPS) - option A.
To arrive at this answer, you would have needed to understand the definitions of each reimbursement methodology and compare them to determine which one fits the criteria given in the question.