Jane Dotson
PPS, or Prospective Payment System, is a payment model for hospitals implemented by Medicare. It has significantly impacted the hospital industry and how hospital services are used by physicians and patients. PPS aims to control the growth of inpatient benefit costs without increasing costs for beneficiaries. PPS has been successful in reducing the rate of growth in total Medicare spending. Outside of Medicare, PPS has been associated with cost-shifting, resulting in higher prices for some payers. PPS Mutual, an Australian company, offers commercial insurance products such as life insurance and income protection insurance exclusively for professionals. These insurance plans offer benefits such as the ability to increase cover without providing additional medical evidence and flexible premium structures.
| Characteristics | Values |
|---|---|
| Purpose | Control the growth of inpatient benefit costs without increasing costs to beneficiaries |
| Availability | Hospitals, Outpatient, Skilled Nursing, Home Health, Physician services |
| Benefits | Reduced growth rate for total Medicare spending, Reduced hospital insurance expenditures, Reduced utilization for other payers |
| Features | Future Increases Benefit, Business Increases Option, Parental Leave options, Flexible premium structure, Ownership transferability |
| Target | Professionals, Graduate professionals with honours-level qualifications |
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What You'll Learn
Medicare's prospective payment system (PPS)
The implementation of Medicare PPS for hospital payment has led to significant changes in the hospital industry and how hospital services are used by physicians and patients. During the first three years of PPS, inflation in hospital expenses per adjusted discharge was reduced by about 5-7 percentage points from pre-PPS levels.
Medicare uses PPS to pay for covered psychiatric services in inpatient psychiatric facilities (IPFs). It also pays inpatient rehabilitation hospitals and units, known as inpatient rehabilitation facilities (IRFs), on a per-discharge PPS basis. The Home Health PPS allows continuous 60-day patient recertification when the patient remains eligible.
A Rural Health Clinic (RHC) or Federally Qualified Health Center (FQHC) can bill and get paid under the RHC All-Inclusive Rate (AIR) or FQHC PPS, respectively.
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Income protection insurance
It is important to note that income protection insurance is different from critical illness insurance, which pays out a one-off lump sum for specific serious illnesses. Additionally, it differs from disability insurance, which is more common in the US and provides short-term and long-term coverage for disabilities resulting from injuries or illnesses.
When considering income protection insurance, it is advisable to seek guidance from an independent financial adviser or specialist broker. They can help you navigate the different policies, premiums, and coverage options available to ensure you select the most suitable plan for your needs.
PPS Mutual, for example, offers income protection insurance exclusively for professionals. Their plan includes benefits that increase with salary raises, inflation, or career advancements. It also allows for flexible premium structures and provides the option to take time off to care for a sick child while still receiving income protection benefits for up to six months.
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Life insurance
PPS offers life insurance to qualifying members. This life insurance cover also creates wealth through the Profit-Share model. PPS Life Cover is a lump-sum benefit that pays out to the cessionary, nominated beneficiaries or estate, in the event of the policyholder's death. The payout can be used to settle debts, provide for dependants and ensure liquidity in the estate. The amount covered is based on the individual's needs and remains in place even if the policyholder changes occupation.
Immediate accidental death cover is provided while the application is being assessed. Up to R100,000 is payable to nominated beneficiaries within 48 hours of the submission of a valid death certificate. If the policyholder is diagnosed with a terminal illness and is likely to die within the next 12 months, 50% of the life cover is paid out. A portion of the life cover is also paid out if the policyholder becomes unable to carry out their profession, based on the selected disability cover amount.
PPS Mutual exclusively offers professional life insurance for its members, who are owners of the business and benefit from its success. PPS Mutual's income protection insurance for professionals allows members to have security when they are unable to work due to illness or injury. The plan ownership may be transferred at any time with no underwriting.
Members of PPS Mutual are entitled to a share in the profits of the Professionals Choice product. This is the only product to offer this feature in the Australian insurance market. Benefits can increase in line with the policyholder's salary, based on increases in the Professional Earnings Index or inflation, whichever is greater. Cover can also be purchased through a Super Fund, including through the PPS Mutual Super Fund, which provides a 15% Rollover Rebate.
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Health professions indemnity
The Health Professions Indemnity insurance provides security to health professionals, allowing them to focus on their clinical practice with the assurance that their indemnity needs are adequately covered. It offers comprehensive cover against liability arising from clinical practice and provides access to professional medico-legal advice. An important feature of this insurance is that it covers incidents that occurred prior to the inception of the policy, provided there was uninterrupted indemnity cover beforehand. Additionally, policyholders are entitled to an extension period after their cover expires or is cancelled, during which they can still make claims.
The ProAssurance Corporation, PPS's partner in developing this product, is one of America's leading experts in medical professions indemnity. The product leverages the intellectual property of this global business partner to offer innovative features that cater to the specific needs of South African health professionals.
While the insurance primarily provides indemnity for incidents occurring during the policy period, it also offers contract certainty regarding run-off cover after policy termination. This added security enables professionals to navigate South African legal and regulatory structures in the event of non-performance.
PPS Mutual, another offering by PPS, provides income protection insurance exclusively for professionals. This insurance ensures that members can maintain their lifestyle and meet financial commitments even when they are unable to work due to illness or injury. It offers benefits such as the ability to increase cover in line with salary increments and the flexibility to reduce or stop cover during parental leave.
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Business insurance
General liability insurance, often purchased as the first policy by business owners, provides protection in the event of claims related to negligence, bodily injury, property damage, libel, and slander. It is particularly relevant for businesses that work directly with customers, handle customer property, or engage in advertising. This type of insurance helps cover legal expenses and compensate employees for work-related injuries or illnesses. Most states require businesses to carry this type of insurance to comply with workers' compensation laws.
Commercial property insurance focuses on protecting the physical assets of a business, including buildings, tools, and equipment. It provides financial assistance in the event of damages caused by water, fire, wind, or vandalism. This type of insurance is crucial for businesses with owned or rented properties and valuable equipment necessary for their operations.
Another important aspect of business insurance is commercial auto insurance. This type of policy is designed for businesses that use company-owned, leased, or personal vehicles for work-related purposes. It helps cover the costs associated with auto accidents, ensuring that businesses are not burdened by unexpected financial liabilities.
In today's digital age, data breach insurance, also known as cyber insurance, has become essential for businesses that collect, store, send, or receive sensitive customer data. This type of insurance provides protection against technology-related risks, including data breaches and cyberattacks, which can have significant financial and operational impacts.
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Frequently asked questions
PPS, or Prospective Payment System, is a payment system implemented by Medicare.
The main purpose of PPS is to control the growth of inpatient benefit costs without increasing costs to beneficiaries.
PPS Mutual offers professional life insurance and income protection insurance.
PPS Mutual's income protection insurance is for professionals who want security when they are unable to work due to illness or injury.
PPS Mutual's income protection insurance offers a range of benefits and optional extras designed to meet lifestyle needs and financial commitments. This includes the ability to increase cover after certain life events without providing additional health information, as well as flexible premium structures.
