This paper explains that the
prospective payment system has been used to offset the cost of care and to alleviate the complications
faced by those who enter the nursing homes. The author points out that the
prospective payment system has undergone
criticism and scrutiny since its inception, but is still considered the most viable plan for the financial responsibility of those entering nursing homes. The paper states that the foundational objective of the prospective payment system is to reduce the rates of increase when it comes to Medicare inpatient payments.