Hospitals get 4.3% increase in inpatient payment rates in CMS final rule
Agency says its highest market basket update in last 25 years is due to higher expected growth in worker compensation.
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The Inpatient Prospective Payment System final rule released late today increases hospital operating payment rates by 4.3%.
As in other final payment rules recently released, the Centers for Medicare and Medicaid Services upped the proposed payment rate. In April CMS proposed hospitals receive a 3.2% payment increase for 2023.
The rate reflects a FY 2023 projected hospital market basket update of 4.1%, reduced by a statutorily required productivity adjustment of a 0.3 percentage point and plus a 0.5 percentage point adjustment required by statute.
"This is the highest market basket update in the last 25 years and is primarily due to higher expected growth in compensation prices for hospital workers," CMS said.
"CMS is taking action to support hospitals, including updating payments to hospitals by a significantly higher rate than in the proposed IPPS rule. This final rule aligns hospital payments with CMS' vision of ensuring access to healthcare for all people with Medicare and maintaining incentives for our hospital partners to operate efficiently," said CMS Administrator Chiquita Brooks-LaSure. "It also takes important steps to advance health equity by encouraging hospitals to implement practices that reduce maternal morbidity and mortality."
The rule includes three health equity-focused measures in hospital quality programs and establishes a "Birthing-Friendly" hospital designation. CMS will award this new designation to hospitals that participate in a statewide or national perinatal quality improvement collaborative program and have implemented the recommended quality interventions. CMS is finalizing this designation following the release of the comprehensive CMS Maternity Care Action Plan.
In the near future, CMS is also interested in using measures focused on connecting patients with identified social needs to community resources or services. CMS sought comment on the proposed rule.
WHY THIS MATTERS
The payments go to acute care hospitals paid under the 2023 Inpatient Prospective Payment System that successfully participate in the Hospital Inpatient Quality Reporting Program and are meaningful electronic health record users.
Under the Long-Term Care Hospital Prospective Payment System, CMS expects payments in FY 2023 to increase by approximately 2.4% or $71 million.
CMS is discontinuing the use of proxy data for uncompensated care costs in determining uncompensated care payments for Indian Health Service and Tribal hospitals, and hospitals in Puerto Rico, and is establishing a new supplemental payment to prevent undue long-term financial disruption for these hospitals and to promote long-term payment stability.
CMS is also finalizing new flexibilities for graduate medical education for rural hospitals participating in rural track programs, which will help promote workforce development in rural areas.
THE LARGER TREND
CMS's final rule for inpatient and long-term care hospitals that builds on the Biden-Harris Administration's key priorities to advance health equity and improve maternal health outcomes, CMS said.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
