To control costs and reward efficiency, Medicare pays the majority of hospitals under PPSs, which make payments on the basis of the clinical classification of each service. In response to concerns that cancer hospitals would experience payment reductions under a PPS, beginning in 1983, Congress required the establishment of criteria under which 11 PCHs are currently exempted from the inpatient PPS and are receiving payment adjustments under the outpatient PPS. As such, PCHs are paid largely on the basis of their reported costs. GAO was asked to examine PCHs in terms of their characteristics and Medicare payments.
Read full document: Payment Methods for Certain Cancer Hospitals Should Be Revised to Promote Efficiency