AHA calls 2.8% inpatient payment increase 'woefully inadequate'
The proposed rule would recognize homelessness as an indicator of increased acute resources, which may result in higher hospital payment.
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Acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting program and are meaningful electronic health record users will get a proposed payment rate increase of 2.8% in 2024, under a proposed rule released Monday.
This reflects a projected hospital market basket update of 3%, reduced by a projected 0.2 percentage point productivity adjustment.
For 2024, the Centers for Medicare and Medicaid Services expects the proposed increase in payment rates would generally increase hospital payments by $3.3 billion.
For Long-Term Care Hospitals, CMS proposes to increase the payment rate by 2.9%. Overall, CMS expects LTCH payments under the dual-rate payment system to decrease by 0.9%, or $24 million, primarily due to a projected decrease in high-cost outlier payments in 2024 compared to 2023.
The American Hospital Association and other stakeholders protested what they called a low rate, with the AHA calling the 2.8% inpatient increase "woefully inadequate. " The AHA called this and the long-term care hospital decrease "unsustainable."
The FY 2024 Inpatient Prospective Payment System/Long-Term Care Hospital Prospective Payment System Proposed Rule has a 60-day comment period.
WHY THIS MATTERS
CMS also released priorities to advance health equity. The proposed rule would recognize homelessness as an indicator of increased resource utilization in the acute inpatient hospital setting, which may result in higher payment for certain hospital stays.
These costs would be recognized through hospitals reporting social determinants of health codes on claims. In addition, CMS is requesting comment on how to further support safety-net hospitals.
It would adopt hospital quality measures to foster safety and equity, and reduce preventable harm in the hospital setting.
CMS is proposing to make health equity adjustments in the Hospital Value-Based Purchasing Program by providing incentives to hospitals to perform well on existing measures. There are also incentives for providers who care for high proportions of underserved individuals, as defined by dual eligibility status.
CMS is also proposing that rural emergency hospitals could be designated as graduate medical education training sites. As a result, more medical residents would be able to train in rural settings, which could help address workforce shortages.
CMS includes a proposal to measure the rate of patients and residents in long-term care hospitals who are up to date on their COVID-19 vaccinations and have new, additional measures for screenings for cancer and social drivers of health.
REACTION
Ashley Thompson, senior vice president for public policy analysis and development at the American Hospital Association said, "The AHA is deeply concerned with CMS' woefully inadequate proposed inpatient hospital payment update of 2.8% given the near decades-high inflation and increased costs for labor, equipment, drugs and supplies. Moreover, long-term care hospitals would see a staggering negative 2.5% payment update under this proposal. These insufficient adjustments are simply unsustainable."
Beth Feldpush, senior vice president of policy and advocacy for America's Essential Hospitals said, "We appreciate the administration's ongoing interest in advancing health equity, as seen in today's fiscal year 2024 Inpatient Prospective Payment System (IPPS) proposed rule, and its desire to define safety net hospitals. … We are concerned other provisions in the proposed rule would undermine the safety net, including those to decrease Medicare disproportionate share hospital payments by more than $200 million and to update the IPPS base payment rate by a lackluster 2.8%. Ongoing pressures, such as inflation and high labor and supply costs, demand a stronger investment by Medicare, a critical source of support for essential hospitals and the communities they serve."
Soumi Saha, senior vice president of Government Affairs for Premier said, "The Centers for Medicare & Medicaid Services (CMS) continues to use data sources for calculating labor costs that fail to capture the stratospheric rise in the cost of labor that have plagued hospitals since the pandemic started. This chasm between the 2.8% payment update and reality, coupled with uncomfortably high inflation, delivers a one-two punch to hospitals that must be addressed."
ON THE RECORD
"CMS is helping to build a resilient healthcare system that promotes good outcomes, patient safety, equity, and accessibility for everyone," said CMS Administrator Chiquita Brooks-LaSure. "This proposed rule reflects our person-centric approach to better measure healthcare quality and safety in hospitals to reduce preventable harm and our commitment to ensure that people with Medicare in rural and underserved areas have improved access to high-quality healthcare."
"With this proposed rule, CMS is more accurately paying hospitals and recognizing for the first time that homelessness, as a social determinant of health, also impacts resource utilization," said CMS Deputy Administrator Dr. Meena Seshamani. "Creating incentives for hospitals to provide excellent care for underserved populations lays the foundation for a health system that delivers higher-quality, more equitable, and safer care for everyone."
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
Tina Manoharan will offer more detail in the HIMSS23 session "AI and Data Interoperability: A Symbiotic Relationship for Healthcare." It is scheduled for Tuesday, April 18 at 4:15 p.m. - 5:15 p.m. CT at South Building, Level 4, room S401.
