Medicare Payment Systems: A Look Back and a Look Forward

Medicare is the major payer for patients with chronic wounds. Over the past 50 years, the Medicare payment systems have undergone numerous changes. At the beginning of the Medicare program, providers were paid based on fee-for- service. In 1997, many of the Medicare payment systems were converted to prospective payment systems (PPSs). Currently, Medicare is conducting many demonstration payment programs to provide the best quality outcomes, at the lowest total cost of care (not necessarily the lowest cost product or procedure), and with patient satisfaction. While the demonstration payment programs are being tested, providers may receive parallel Medicare payments: payment through current PPS and through the demonstration payment program. Wound care providers and manufacturers need to prepare now for the future payment systems.