Under retrospective payment systems, how are payments calculated?

Under retrospective payment systems, payments are calculated after services are provided and billed. This means that healthcare providers deliver the services and then submit claims to the payer for reimbursement based on the actual services rendered. The key feature of this payment approach is that it evaluates the costs and services following their completion, which allows for a detailed review of the claims submitted by providers based on the services that were actually delivered to patients.

This system contrasts with prospective payment methods, where payments are predetermined based on expected costs or fixed rates regardless of actual services rendered. In retrospective systems, payers can assess the claims against the services and outcomes observed, providing room for adjustments based on the actual costs incurred. This system can also lead to variations in payment depending on the specific circumstances of the services provided rather than relying on a set amount predetermined before care is delivered.