Diagnosis Related Groups

Before then, reimbursement had been paid on fee-for-service basis (Skinner, 1997). Enforcement procedures included denial of payment for unnecessary armorial bearing, an step up review for those providers not meeting a threshold of compliance, and extrusion from Medi like and monetary penalties for drop deadure to meet professionally recognized standards of c are quality (Gosfield, 1994).

DRG procedures, with respect to provider reimbursement, were introduced by the federal government activity along with a general prospective payment agreement (PPS), and a system for the selection of providers to deliver health care services funded by the federal government, which is known as the best-loved provider organization (PPO) system. DRG is a procedure used in the classification of patient groups. DRG classifications are used in PPS reimbursement determinations. These procedures (DRG) are also used in decision-making related to (1) service access, and (2) in the designation of PPOs, and thus are of great relevance to the coating of the managed care concept. The intent of DRG implementation, with respect to provider reimbursement, was to limit the flick of the federal government for health care funding costs, and restraint health care delivery costs (Rovner, 1991).

Retrospective reimbursement is the traditionalistic method of settling hospital charges in the United States.

The retroactive technique provides for the reimbursement of health care providers on the basis of

The introduction of DRG procedures for use in provider reimbursement created severe budgetary problems for hospitals, regardless of the type of budgeting process employed. With a prospective reimbursement system, hospital administrators must somehow be fitting to forecast maximum expenditures with a high degree of precision. If they fail to make such precise estimates, the solvency of the organization will nonplus jeopardized. The introduction of DRG procedures for provider reimbursement also restricted the flexibility of some(prenominal) the hospital organization and its administrators (Moble & Magnussen, 1998).

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