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The IPPS: Review where it started and what it means for FY 2021

Prior to 1983, Medicare reimbursed based on actual charges that inpatient healthcare facilities billed (often referred to as “fee-for-service” payments). The more tests, procedures, and services ordered by physicians, the more an organization was paid. This created the potential for unnecessary or excessive services, contributing to rising healthcare costs and the possibility of depleting Medicare funds.

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