Skip to main content

Search from vocabulary

Content language

Concept information

social science subjects > business and management > finance > prospective payment system

Preferred term

prospective payment system  

Definition

  • In 1983, the U.S. federal government initiated a new method of payment for Medicare hospital services. The prospective payment system (PPS) created a reimbursement mechanism in which scientifically clustered diagnoses known as diagnosis-related groups (DRGs) would have predetermined compensation amounts, regardless of the hospitals' actual costs. [Source: Encyclopedia of Health Care Management; Prospective Payment System]

Belongs to group

URI

https://concepts.sagepub.com/social-science/concept/prospective_payment_system

Download this concept: