Outpatient Prospective Payment System
Section 4523 of the Balanced Budget Act of 1997 (BBA) provides authority for CMS to implement a prospective payment system (PPS) under Medicare for hospital outpatient services, certain Part B services furnished to hospital inpatients who have no Part A coverage, and partial hospitalization services furnished by hospitals and community mental health centers. The provisions of this section were further modified by sections 201 and 202 of the Balanced Budget Refinement Act of 1999 (BBRA) and subsequent legislation.
The outpatient prospective payment system (OPPS) significantly changes how hospitals are reimbursed for outpatient services under Medicare - affecting communications, coding procedures, patient records, billing, and reimbursement. Hospitals require new strategies for the effective management of outpatient information, resources, and services.