Which payment system pays skilled nursing facilities an all-inclusive rate for Medicare Part A beneficiary services?

The Prospective Payment System (PPS) is designed to manage payments for various healthcare services, including those provided by skilled nursing facilities under Medicare Part A. This system operates by setting a predetermined rate for a patient’s care based on specific criteria, such as the patient's diagnosis and the expected resource use during their stay. Essentially, PPS allows facilities to receive a fixed amount for care, which encourages efficiency and cost management while still maintaining the quality of care provided to patients.

In the context of skilled nursing facilities, this all-inclusive rate is determined prior to the provision of services, enabling these facilities to budget and allocate resources more effectively. The PPS structure contrasts with other models, like Medicare Fee-for-Service, which pays providers separately for each service rendered, or other systems that may not encapsulate the full range of services or vary significantly based on case specifics. Hence, the Prospective Payment System stands out as the correct choice for its alignment with the nature of reimbursement for skilled nursing facilities under Medicare Part A.