A nurse is reviewing cost-containment strategies with a group of nursing students. The instructor explains that the Prospective Payment System (PPS) was implemented to help control healthcare costs. Which statement by a student indicates understanding of how PPS functions?
- "Healthcare facilities receive a predetermined payment amount based on the patient's diagnosis, regardless of actual costs."
- "Reimbursement increases proportionally with the length of hospital stay to cover all expenses."
- "Hospitals are reimbursed based on the actual costs incurred for each patient's care."
- "Payment is determined after discharge by reviewing all procedures and treatments provided."