Hospital Outpatient Prospective Payment System: A Maturing Prospective Payment System

The Hospital Outpatient Prospective Payment System has matured into a complex diagnosis-related group-like payment system over the past 18 years and has continued to become more prospective in paying for services that are bundled, packaged, and grouped into episodes of care. This payment system has become the basis by which payments for services in other payment systems, such as the ambulatory surgery centers and the Medicare Physician Fee Schedule, are made. The quality of hospital data has a greater effect on reimbursement of services than ever anticipated when this payment system was developed. Also, CMS methodological changes further distort reported hospital data, which often results in lowered payment levels for diagnostic imaging.