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The effect of TEFRA and BBA 1997-2001 on Hospital Performance - Research Paper Example

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The affects of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the Balanced Budget Amendment (BBA 1997-2001) on Hospital Performance TEFRA (Tax Equality and Fiscal Responsibility Act 1982): TEFRA, The tax Equality and Fiscal Responsibility Act of Federal government was implemented in 1982, due to the increase in the financial fee of services provided by the health care sector…
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The effect of TEFRA and BBA 1997-2001 on Hospital Performance
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Download file to see previous pages The reimbursement due to retrospective payment method which led astounding increase in Medicare expenses for government, TEFRA was approved by congress to apply the new prospective payment method to change the Medicare’s repayment plan. The two major characteristics of TEFRA were; the theory of case-mixed was made a part of repayment system and a maximum value was fixed on the permissible rate of increase in the fee per hospital discharge. The hospitals under the Medicare program followed (PPS) after the establishment of Social Security Reform Act which was passed by Congress to facilitate PPS features. Payment system was activated according to the category defined by the government as DRG, Diagnose Related Group patient categorization method. Hospitals would receive a probable payment against per DRG and they were aimed to cover all the operating cost of the patient. ( Lave, 1989) The addition of Medicaid patients were later made on the basis of State to State provision. Prospective Payment System (PPS) was a profitable method for both parties. The hospitals gained a profit if the amount of money spent on the patient services was less than the PPS payment, set according to the preset fee limit of diagnose and service by the government. ...
Some of the hospitals preferred to stick with TEFRA policy as PPS was considered as a weak analyst of the essential requirements of specific units in the hospitals throughout the country. In the acute care (PPS) the average cost payment weren’t contemplated to be suitable due to the low number of Medicare patients, especially in children’s hospitals. (Medicare Payment Advisory Commission, 1999) Acute care prospective payment system was mainly dependent upon (DRGs), thus the success and savings extracted from it encouraged the government to implement it for upcoming years and expand it to non acute health care setting. However, it had the negative impacts on hospitals as some of them faced closure and bankruptcy as well. The decrease in the amount of Medicare and Medicare program due to (DRGs) and the increases in medical inflation, hospitals faced serious quandary with the provided fixed amount of budget. Government reinforced the same strategy of TEFRA with the help of skilled nurses to gain or lose the amount of money produced while categorizing data of patients with the help of Resource Utilization Group (RUG-III) payment method. Outpatient prospective payment method was introduced in 2001 by the government to categorize radiology and surgical services on fractional medical visits. Thus, APCs Ambulatory Payment Classification verifies the fixed payment rates, which enabled the government to monitor the expenses closely and to refrain from extra expenses. TEFRA facilities programs like rehabilitation, psychiatric care, and alcoholic and drug treatment along with it children’s cancer and long term care with the exemption of PPS. The rate for rehabilitation and psychiatric facilities weren’t fixed due to the fact that they both require ...Download file to see next pagesRead More
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