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In an effort to reduce the rapidly escalating costs of providing healthcare in the U.S., Congress implemented the new inpatient PPS in the mid-1980s. This system reduced the amount of Medicare reimbursement that hospitals would receive and incentivized facilities to become more efficient by decreasing their costs for inpatient care. Certain specialty hospitals that met a number of requirements were exempted from PPS, and this group included hospitals that focused solely on the treatment of cancer. These exempted facilities would continue to be reimbursed based on the cost-plus method and would not shift to the new PPS reimbursement method. There are currently eleven PPS-Exempt Cancer Hospitals operating in the U.S., ten of which are NCI-designated comprehensive cancer centers. While advocates for these facilities claim that the cost-based reimbursement method allows them to provide superior care and improve patient outcomes, there are also detractors who feel that PCHs should be under the same reimbursement system as all other hospitals . Read more.

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