Which of the following describes the method of calculating payments under a Prospective Fee Schedule?

The method of calculating payments under a Prospective Fee Schedule is characterized by being based on predetermined amounts established for specific services, rather than relying on historical charges, negotiated agreements, or patient outcomes.

The focus here is on fixed amounts that are determined before services are rendered. This system promotes predictability in healthcare expenses for both providers and payers. Under a Prospective Fee Schedule, each service is assigned a specific payment amount that is established by the payer, which allows for standardized reimbursement rates for particular medical services, procedures, or diagnoses.

This contrasts with other methods that might look at historical data or involve negotiation on a case-by-case basis. Since the Prospective Fee Schedule does not adjust payments based on the actual circumstances of each patient encounter, it streamlines billing and ensures that providers know what they will receive for services rendered upfront.

In essence, the prospective nature of this model emphasizes pre-defined payment rates rather than variable outcomes or negotiations, making it a critical aspect of healthcare reimbursement practices.