AHA says 3.1% hospital outpatient payment increase is not enough

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The American Hospital Association has criticized the "inadequate update" to outpatient hospital payments in the 2024 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule.

Outpatient hospital payment is increasing by 3.1%, reflecting a market basket percentage increase of 3.3%, reduced by a 0.2 percentage point for the productivity adjustment.

"The AHA is concerned that CMS has again finalized an inadequate update to hospital payments," said Stacey Hughes, executive vice president of the American Hospital Association. "Today's increase for outpatient hospitals of only 3.1% comes in spite of persistent financial headwinds facing the field. Most hospitals across the country continue to operate on negative or very thin margins that make providing care and investing in their workforce very challenging day to day."

The AHA is urging Congress for additional support by the end of the year, Hughes said.

WHY THIS MATTERS

Physician payment has also been criticized as organizations such as the American Medical Association have spoken out against the recent 2024 Medicare Physician Fee Schedule Final Rule.

In the hospital outpatient and ASC final rule, the Centers for Medicare and Medicaid Services acknowledged the impact of the COVID-19 public health emergency on healthcare utilization, particularly in 2020.

In the 2019 final rule, CMS finalized a policy to apply the productivity-adjusted hospital market basket update to ASC payment rates for an interim period of five years – from 2019 through 2023. CMS said it would use this time to assess whether there was a migration of the performance of procedures from the hospital setting to the ASC setting as a result of the use of a productivity‑adjusted hospital market basket update.

Therefore, in the 2024 outpatient OPPS/ASC final rule with comment period, CMS said it is finalizing extending the five-year interim period an additional two years – through 2025. 

"This will enable CMS to gather additional claims data further removed from the COVID-19 PHE to more accurately analyze whether the application of the hospital market basket update to the ASC payment system affects the migration of services from the hospital setting to the ASC setting," CMS said.

These payment policies will affect approximately 3,500 hospitals and approximately 6,000 ASCs. 

THE LARGER TREND

CMS also released hospital price transparency changes in the final rule.

To strengthen compliance and improve the public's understanding and automated use of hospital information, CMS is finalizing modifications to the standard charge display requirements. Additionally, CMS is finalizing updates to the enforcement provisions to streamline and improve the transparency of the enforcement process.

The finalized policies will further advance the agency's commitment to increasing price transparency and enforcing hospital compliance with these requirements, CMS said. 

The Hospital Price Transparency machine-readable file (MRF) is a single digital file intended to be read by machines able to process hospital standard charge information. CMS is finalizing new changes to increase standardization of this MRF to help deliver on the promise of hospital price transparency. 

Standardization will improve hospitals' ability to comply, enhance the public's ability to aggregate information (for example, for use in consumer-friendly displays), and streamline CMS's ability to enforce the requirements, CMS said. 
 
CMS finalized a requirement for hospitals to display their standard charge information by conforming to a CMS template layout, data specifications, and data dictionary. The CMS templates will be offered in a comma-separated values (CSV) "wide" format, a CSV "tall" format, and a JSON schema, similar to the sample templates that are currently available on the CMS hospital price transparency website for voluntary use since November 2022. 

Hospitals will be required to encode their standard charge information in the CMS templates and conform with other specified technical instructions that will be made available in a data dictionary.
 
The hospital price transparency policies impact more than 7,000 institutions licensed as hospitals, CMS said. 

In addition to finalizing payment rates, this year's rule includes policies on promoting health equity, expanding access to behavioral healthcare, improving transparency in the health system, and promoting safe, effective, and patient-centered care. 

ON THE RECORD

"The AHA will be carefully reviewing the changes to the Hospital Price Transparency Rule to ensure they continue to advance our shared objective with CMS of making it easier for patients to access pricing and cost information while reducing unnecessary administrative burden and costs on hospitals and health systems," the AHA said.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org