Commercial PPS Methodology Overview

Reduce Risk

With PPS, health plans retain only retain the risk of underwriting health care utilization for the population of enrollees. By sharing the risk, each group is accountable for that portion of risk that they can effectively manage.

Highlights

• Shift appropriate levels of risk back to providers
• Reward the providers delivering effective care
• Control utilization

Provider Contracting

OptumInsight customers are using PPS data to reduce costs by negotiating more favorable provider contracts. Medicare inpatient (DRG-based) payment rates are typically 30 to 35 percent of charges, which gives payers the data needed to negotiate greater discounts.

An Established Methodology

Perhaps the biggest benefit is that PPS is an established methodology. Providers are familiar with using it for billing and reimbursement under DRGs for inpatient care, and APCs for outpatient care. PPS is used by many regulatory bodies, making it widely understood and accepted in the hospital community.

Sub-Acute Payment Systems

In addition to DRGs for inpatient care, and APCs for outpatient care, OptumInsight offers the following sub acute payment methodologies to accurately group and price specialty claims.

• Inpatient Psychiatric (IPF)
• Inpatient Rehabilitation (IRF)
• Long Term Care (LTC)
• Skilled Nursing Facility (SNF)
• Home Health Agency (HHA)
• End Stage Renal Disease (ESRD)