Exceptions process becoming the norm for PPS-excluded providers.

The worsening financial condition of providers exempt from Medicare's prospective pricing system (PPS) is driving more of those hospitals to seek exceptions from their payment limits. A major problem inherent in the current pricing system for PPS-excluded providers is its original intent as a temporary solution, policy experts say. The AHA has warned HCFA that "major structural changes in the health care delivery system" are imperiling the survival of a good number of PPS-exempt hospitals. Or, in the words of the CEO of a PPS-exempt Philadelphia rehabilitation hospital, "We are all on a collision course with disaster, and some of us have already arrived."