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Prospective Payment Systems - General Information

Guidance for the Prospective Payment System (PPS) method

Final

Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: January 31, 2018

A Prospective Payment System (PPS) is a method of reimbursement in which Medicare payment is made based on a predetermined, fixed amount. The payment amount for a particular service is derived based on the ification system of that service (for example, diagnosis-related groups for inpatient hospital services).  CMS uses separate PPSs for reimbursement to acute inpatient hospitals, home health agencies, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, and skilled nursing facilities.  See Related Links below for information about each specific PPS.

Zipcode to Carrier Locality File 

This file is primarily intended to map Zip Codes to CMS carriers and localities. This file will also map Zip Codes to their State. In addition, this file contains an urban, rural or a low density (qualified) area Zip Code indicator.

Provider Center

For a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) providers, including physicians, other practitioners and suppliers, go to the Provider Center (see under "Related Links" below).

HHS is committed to making its websites and documents accessible to the widest possible audience, including individuals with disabilities. We are in the process of retroactively making some documents accessible. If you need assistance accessing an accessible version of this document, please reach out to the guidance@hhs.gov.

DISCLAIMER: The contents of this database lack the force and effect of law, except as authorized by law (including Medicare Advantage Rate Announcements and Advance Notices) or as specifically incorporated into a contract. The Department may not cite, use, or rely on any guidance that is not posted on the guidance repository, except to establish historical facts.