Which payment system sets a fixed amount for a patient’s treatment based on historical costs?

The Inpatient Prospective Payment System (IPPS) is the correct choice as it is designed specifically to set a fixed payment amount for inpatient hospital services based on the diagnosis-related group (DRG) that a patient falls into. Under this system, the payment amount is determined by historical data, which includes the average costs associated with treatment for various conditions. This means that hospitals receive a predetermined, fixed payment for hospital stays, regardless of the actual costs incurred.

This approach incentivizes hospitals to provide care more efficiently while maintaining quality, as they benefit financially by keeping costs below the set payment rate. Since payments are established based on historical costs associated with particular diagnoses, it creates a standardized and predictable model for reimbursement.

The other options, although also related to payment systems, do not specifically embody the concept of fixing payment amounts based solely on historical costs of treatments for inpatient services in the same way the IPPS does.