The Inpatient Prospective Payment System (IPPS) is primarily designed for which type of healthcare service?

The Inpatient Prospective Payment System (IPPS) is designed specifically for inpatient hospital services. This system is used to classify and reimburse hospitals for inpatient care based on predetermined rates for diagnoses and procedures. Each patient admitted to the hospital is assigned a Diagnosis-Related Group (DRG), which determines the payment amount the hospital will receive for the entire stay.

This structure encourages hospitals to provide care efficiently since they receive a fixed payment based on the DRG regardless of the length of stay or the resources utilized. By focusing on inpatient services, the IPPS ensures that hospitals can deliver necessary care while maintaining fiscal accountability. This is distinct from outpatient services, emergency care, or preventive health examinations, which do not operate under the IPPS framework and instead may be reimbursed through different models, such as Outpatient Prospective Payment System (OPPS) or fee-for-service arrangements.