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CMS Final IPPS Rule Improves After Intense Advocacy Efforts

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Earlier this week, the Centers for Medicare & Medicaid Services (CMS) issued its 2023 inpatient prospective payment system final rule — a rule that includes several positive changes compared to CMS’ initial proposal. 

The changes, which bring additional revenue for hospitals that continue to reel from the financial effects of the pandemic, are the direct result of a nationwide push by hospitals and the associations representing them. The final rule includes: 

  • An increase of inpatient payment rates for most hospitals paid under the IPPS by 4.3% (up from 3.2% in the proposed rule) in 2023. This change will increase Medicare payments to hospitals by $1.4 billion. 
  • Distribution of $6.8 billion (up from $6.5 billion as proposed) in uncompensated care payments for 2023. Unfortunately, despite the increase compared to the proposed rule, this is still a decrease of approximately $318 million from federal fiscal year 2022. As recommended by CHA, CMS will use two years of audited data to distribute uncompensated care payments in 2023.  
  • A net market basket update of 3.8% for long-term care hospitals, with payments projected to increase by approximately $71 million  
  • Modifications to graduate medical education policies that help ensure hospitals are paid appropriately for training certain residents and that promote training opportunities in rural areas 
  • Streamlining of some COVID-19 data reporting requirements and delaying additional public health reporting measures to provide hospitals time to prepare for implementation  

While the changes do not represent everything that hospitals pressed for this year, the final rule is a marked improvement from where CMS started. More importantly, the changes demonstrate the power of the collective hospital voice and are proof positive that when we act together, the people and communities served by hospitals are supported and protected.