When Did Medicare PPS Start? 
Medicare PPS -LRB- Prospective Payment System -RRB- started in 1983 . It was established by the Centers for Medicare and Medicaid Services -LRB- CMS -RRB- as a way of curbing expensive hospital care . PPS is a means of reimbursing hospitals on a casemix adjusted , flat-rate basis . It is used by acute inpatient hospitals , home health agencies , and hospices who participate with Medicare . 