Which of the following, established by Congress in 1983, eliminated cost-based reimbursement for patients who received Medicare benefits?
a. Prospective payment system (PPS)
b. Professional standards review organizations (PSROs)
c. Utilization review (UR) committees
d. Capitation
ANS: A
Established by Congress in 1983, the PPS eliminated cost-based reimbursement. The federal government, the biggest consumer of health care, which pays for Medicare and Medicaid, has created professional standards review organizations (PSROs) to review the quality, quantity, and costs of hospital care. Medicare-qualified hospitals had physician-supervised utilization review (UR) committees to review the admissions and to identify and eliminate overuse of diagnostic and treatment services ordered by physicians caring for patients on Medicare. Capitation aims to build a payment plan for select diagnoses or surgical procedures that consists of the best standards of care at the lowest cost.
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