Question

Prospective payment does not allow the third-party payers, including Medicare and Medicaid, to reduce costs in comparison to the former fee-for-service environment.

a. True
b. false

Answer 1

In a fee-for-service system, providers are paid based on the cost of services. Prospective payment systems used by third-party payers like Medicare and Medicaid help control costs and incentivize efficiency. Option b.

Step-by-step explanation:

In a fee-for-service health financing system, medical care providers receive reimbursement based on the cost of services they provide. Prospective payment systems, such as those used by third-party payers like Medicare and Medicaid, provide fixed payments to medical providers based on predetermined rates for specific procedures or diagnoses.

This system can help reduce costs compared to fee-for-service because it provides incentives for providers to be more efficient and avoid unnecessary services. By setting predetermined payment amounts, third-party payers can control costs and encourage the appropriate use of medical services.

Therefore, the statement in question is false (b). Prospective payment does allow third-party payers to reduce costs compared to fee-for-service.