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Original Question

How does Medicare determine reimbursement for most hospital encounters and outpatient visits? The time spent treating the patient is logged by providers, nurses, and therapists and reimbursement is provided on a sliding scale. It uses a prospective payment system in which payment is made on a predetermined, fixed amount based on resources required to treat the condition. Each healthcare entity contacts reimbursement rates with Medicare individually depending on the average number of Medicare patients treated annually. It is based on an average of private insurance reimbursement for each condition from the previous year.

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