Pps-Exempt Cancer Hospitals: How Are They Funded?

PPS-Exempt Cancer Hospitals (PCHs) are specialized cancer centers that have been exempted by Congress from the Prospective Payment System (PPS) and the associated reporting requirements to the Centers for Medicare & Medicaid Services. There are currently 11 PCHs in the United States, and they receive payment through alternative methods, such as Medicare PPS exclusion. These hospitals have similar characteristics to other cancer centers, including patient comorbidity burden and cancer surgery outcomes, but differ in their exemption from certain reporting standards.

Medicare PPS-Excluded Cancer Hospitals

To be classified as a PPS-exempt cancer hospital, certain criteria must be met. Firstly, the hospital must be recognised as a comprehensive cancer centre or clinical cancer research centre by the National Cancer Institute of the National Institutes of Health. Secondly, it must be classified by a specific date, either on or before December 31, 1990, or by December 31, 1991, if the hospital was located in a state operating a relevant demonstration project as of December 19, 1989. Additionally, the facility must be organised primarily for the treatment of and research on cancer, meaning it cannot be a subunit of an acute general hospital or university-based medical centre. Furthermore, the hospital must demonstrate that at least 50% of its total discharges have a principal diagnosis reflecting a finding of neoplastic disease.

The PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program was developed as mandated by Section 3005 of the Affordable Care Act. The program aims to provide consumers with quality-of-care information to make informed decisions about their healthcare options. Participating hospitals must submit all quality measures to the CMS and comply with public reporting requirements. The PCHQR Program has adopted various measures over the years, including health equity measures, COVID-19 vaccination reporting, and the public display of surgical treatment complications for specific conditions.

It is important to note that hospitals that applied for and were denied classification as cancer hospitals before December 31, 1990, may still be classified as cancer hospitals under specific conditions. If they meet certain criteria, such as having fewer than 50 acute care beds and demonstrating a focus on treating and researching cancer, they can be excluded from the prospective payment systems. Additionally, hospitals seeking exclusion from the inpatient prospective payment system as long-term care hospitals may be excluded if they meet certain length-of-stay and operational requirements and have continuously participated in Medicare.

Hospitals exempt from reporting cancer-specific quality metrics

In the United States, most hospital inpatient care for Medicare beneficiaries is paid based on a Diagnosis Related Group–based Prospective Payment System (PPS). Under this system, the Centers for Medicare and Medicaid Services (CMS) pay hospitals a flat rate per case for inpatient hospital care based on facility averages. Many National Cancer Institute (NCI) -designated cancer centers were and remain exempt from the PPS. Facilities excluded from PPS receive payment based on a cost (rather than diagnosis) “allowable” methodology, which is meant to reflect actual operating costs.

The Affordable Care Act mandates the Prospective Payment System (PPS)-Exempt Cancer Hospitals Quality Reporting program. These hospitals are paid fee-for-service rather than on a DRG system. However, despite mandatory reporting of quality measures for PPS-exempt cancer hospitals, little consensus exists regarding specific gynecologic cancer measures. Documentation of debulking status, cancer survival rates, and offering minimally invasive surgery (for endometrial cancer) and intraperitoneal chemotherapy (for ovarian cancer) are important.

The expansion of required measures in the PCHQR program is significant because CMS is thought to be using the PPS-exempt cancer hospital cohort as a pilot group. The expectation is that these measures will eventually be rolled out to all cancer centers and tied to payment using PPS methodology. The PQRS requirements also represent a substantial shift in incentives for oncologists. Failure to meet the reporting requirements or minimum performance criteria entails 1.5% to 2% penalties on outpatient physician reimbursement.

There is a wide variation in ranking quality measures, which may relate to provider or institutional factors. Despite the mandatory reporting in PPS-exempt cancer hospitals, work remains to define gynecologic cancer quality measures. For example, although a high number of proposed prostate cancer quality measures are reported in the literature, few were assessed, and the majority of these were non-endorsed process measures. Process measures were most commonly assessed; outcome measures were rarely evaluated. In a step to close the quality chasm, a “top 5” core set of quality measures for prostate cancer care, including structure, process, and outcomes measures, is suggested.

NCI-designated cancer centers vs. other hospitals

NCI-designated cancer centers are a group of 73 cancer research institutions in the United States supported by the National Cancer Institute (NCI). These institutions are funded by the NCI to deliver cutting-edge cancer treatments to patients. NCI-designated cancer centers are recognised for their scientific leadership in laboratory and clinical research. They are also known for serving their communities and the broader public by integrating training and education for biomedical researchers and healthcare professionals.

NCI-designated cancer centers are further categorised into Comprehensive Cancer Centers, Clinical Cancer Centers, and Basic Laboratory Cancer Centers. Comprehensive Cancer Centers, the most restrictive of the three, must demonstrate expertise in laboratory, clinical, and behavioural and population-based research. They are expected to initiate and conduct early-phase, innovative clinical trials and to participate in the NCI's cooperative groups by providing leadership and recruitment. Clinical Cancer Centers are recognised for their scientific leadership, resources, and the depth and breadth of their research in basic, clinical, and/or prevention, cancer control, and population science. Basic Laboratory Cancer Centers are primarily focused on laboratory research and often conduct preclinical translation while working collaboratively with other institutions to apply laboratory findings to new and better treatments.

The NCI also supports Consortium Centres, wherein scientists and clinicians from multiple institutions enter into formal agreements to expand cancer research programs. However, Consortium Partners are not themselves considered NCI-designated. The NCI has strict guidelines on how Consortium Partners can refer to their relationship with their parent Consortium Center. These grants fund shared resources to further the goals of the National Cancer Institute, including the administration of cancer research programs, training activities, and clinical trial management services.

NCI-designated cancer centers are among the top 4% of the approximately 1,500 cancer centers in the United States. They develop and translate scientific knowledge from promising laboratory discoveries into new treatments for cancer patients. Each year, approximately 400,000 patients receive their cancer diagnoses at an NCI-designated cancer center, and an even larger number are treated and enrolled in cancer clinical trials. These centers serve their local communities with programs and services tailored to their unique needs and populations, disseminating evidence-based findings that can be translated to benefit similar populations around the country.

Prospective Payment System (PPS)

The Prospective Payment System (PPS) is a reimbursement system for outpatient care at Federally Qualified Health Centers (FQHCs). Under PPS, health centers receive a fixed, per-visit payment for any patient with Medicaid. The per-visit rate is specific to each health center location and is determined and updated by a financial accounting process conducted by state Medicaid agencies. The PPS rate for Medicare, on the other hand, is fixed across different health centers.

The PPS system was implemented by CMS in 2000 for Medicaid and Medicare. This system covers defined periods, such as per diem, per stay, or 60-day episodes, and the payment amount is based on a unique assessment classification of each patient. The Medicare inpatient PPS systems are still in their infancy and are gradually being revised.

The Medicare Hospital Outpatient PPS (OPPS) differs from the traditional PPS methodology because payment is made for individual evaluation and treatment visits. Part B payments for evaluation and treatment visits are determined by the Medicare Physician Fee Schedule.

It is important to note that PPS does not apply to acute care hospital settings or HMOs and home health agencies. In cases where a patient exhausts the Part A benefit and becomes a Part B case, they are no longer paid under PPS.

Quality measures in gynecologic oncology programs

Quality improvement is an important and growing field in medicine, with a significant role in the future of gynecologic oncology. The Affordable Care Act mandates the Prospective Payment System (PPS)-Exempt Cancer Hospitals Quality Reporting program. These hospitals are paid a fee-for-service rather than on a DRG system. Despite this mandatory reporting in PPS-exempt cancer hospitals, there is a lack of consensus on specific gynecologic cancer measures, and work remains to be done to define these measures.

There are already many successful examples of quality improvement initiatives in gynecologic oncology that have improved patient care. These include enhanced recovery after surgery programs, reduced blood transfusions, and increased adherence to guideline-based cancer care. The DMAIC framework, which stands for Define, Measure, Analyze, Improve, and Control, can help increase the likelihood of project success by providing a structured format for teams to follow. This framework can be used with any quality improvement methodology.

The Measure phase, for example, is beneficial to a team before, during, and after a project. Measures are selected to establish a baseline and track progress toward the desired outcome. The Control phase is also critical, as it helps maintain the improvements achieved during the project and prevents backsliding.

Gynecologic oncology practitioners should continue to engage in quality improvement work to enhance patient outcomes, comply with federal regulations, and meet the required educational standards of training programs. By adopting quality improvement methodologies and utilizing frameworks such as Six Sigma and Lean, healthcare settings can achieve the desired outcomes of safe, effective, patient-centered, timely, efficient, and equitable care.

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