Research Paper on:
Legislative Issues and Medicare's Prospective Payment System

Unformatted Sample Text from the Research Paper:
with Medicare. One attempt at reform has been implementation of the prospective payment system (PPS) designed to replace the fee-for-service approach to payment under Medicare coverage. PPS addresses  cost containment, though it is lacking in prescription assistance. It also raises questions regarding patients rights to continued coverage. Effects of PPS and Cost Containment  Cost containment is the greatest single focus of Medicare activity in the current environment. There are concerns about Medicares ability to survive as the baby boomers  begin to reach retirement age: current payments are funded by current collections in the form of payroll taxes. As baby boomers begin to retire and as businesses continue  to downsize their workforces, the federal government can expect reduced revenues from payroll taxes. Direct capital infusion to Medicare in that form already has been reduced and is expected  to be diminished still further in the future. As if the above situation were not enough to threaten Medicares ability to keep up  with the health care needs of our elderly, the overall cost of health care continues to rise at rates that were thought to have been put in the past only  a few years ago. Managed care was quite effective in cost containment until the mid-1990s, when health care costs began to rise again despite managed cares attempts to hold  costs in line. Section 5101 of Public Law 105-277 stands as an example of legislative influences designed to limit cost increases. Section  5101 directly addresses home health agencies and the manner in which Medicare will pay for their services after October 1, 1998. The law limited acceptable charges to 105 percent