Inpatient Prospective Payment Systems (IPPS)

More than three-quarters of the nation's inpatient acute-care hospitals are paid under the inpatient prospective payment system, while nearly a quarter are paid based on costs and are called Critical Access Hospitals. The IPPS pays a flat rate based on the average charges across all hospitals for a specific diagnosis, regardless of whether that particular patient costs more or less. Everything from an aspirin to an artificial hip is included in the package price to the hospital.

Late April 17, CMS issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS proposed rule for fiscal year 2016.
AHA Regulatory Advisory regarding Medicare Inpatient PPS: The Final Rule for Fiscal Year 2014
AHA's comment on the Centers for Medicare & Medicaid Services’ hospital inpatient prospective payment system (PPS) proposed rule for fiscal year (FY) 2014.
CMS published its fiscal year (FY) 2014 proposed rule for the hospital inpatient and long-term care prospective payment systems (PPS) in the May 10 Federal Register.