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What are the Budgeting Challenges for Hospitals With the Recent Implementationof the Medicare Outpatient Prospective Payment System?

Since the inception of the Medicare Outpatient Prospective Payment System (OPPS) three years ago, hospitals have been eligible to receive transitional corridor payments if their OPPS payments were less than the payments they would have received under the prior payment system. However, according to physician and member of Association of American Medical Colleges Thomas Scully, author of a 2003 article on the financial changes to this aspect of the Medicare Program, although the financial structure of the program may strive to thus reduce the gap between OPPS and prior payments, they do not eliminate the gap.


the exception of children's and designated cancer hospitals, transitional corridor payments, a critical source of financial support for many major teaching hospitals, still are not fully compensated for by the OPPS program. Major teaching hospitals in particular receive payments that are substantially below their outpatient outpatient corresponding costs. True, "as with the inpatient PPS, the OPPS makes additional payments for outpatient services that are extremely costly ("outliers")." (Scully, 2003, p.4) But the disproportionate reliance on transitional corridor payments by major teaching hospitals demonstrates that the ambulato

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Approximate Word count = 426
Approximate Pages = 2 (250 words per page double spaced)


  

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