- The CMS is planning to hike inpatient hospital payments by 3.2% for fiscal year 2023, an increase of $1.6 billion, according to the Inpatient Prospective Payment System proposed rule released Monday.
- The American Hospital Association decried that increase as too low and "simply unacceptable" considering inflation and rising hospital labor costs. The group said its members "continue to face a range of challenges that threaten their ability to continue caring for patients and providing essential services for their communities."
- In a continued effort not to penalize hospitals for unavoidable effects of COVID-19, the CMS put forward tweaks to its program that adjusts payments based on hospital-acquired conditions as well as the effort to incentivize hospitals to promote value-based care.
The AHA noted in its statement that net payments to hospitals may decrease despite the 3.2% bump because of cuts in other areas, including uncompensated care payments. The CMS said it plans to distribute about $6.5 billion in the 2023 fiscal year, a drop of more than $650 million from this year.
The group, however, said it appreciates that the CMS will use two years of data to calculate the payments as opposed to the one that regulators have used previously. AHA also applauded the proposed 5% cap on decreases in the wage index.
The Federation of American Hospitals also blasted the rate, saying the update is "woefully inadequate." The rate "does not reckon for the hyper-inflation, staffing crisis, and the continuing pandemic, which will impact resources necessary for patient care well into the future," the group said.
Group purchasing organization Premier concurred, pointing to its analysis that labor rates for hospitals have increased more than 16% since the fourth quarter of 2020.
Analysts were split on the update. SVB Leerink analysts said the rate change was "largely in line with expectations." Cowen analysts, however, said it was "far weaker than market and management expectations" and predicted there will be an additional bump of about 1% for the final rule in August, as more wage inflation data can be included.
The proposed rule includes updates aimed at improving health equity, including a request for information on how to measure social determinants of health and what data the CMS should collect and analyze.
In that same vein, the agency is planning to roll out a designation for the safety and quality of maternity care. It would be public-facing and based on maternal measures in the Inpatient Quality Reporting program. The CMS is also asking for ideas on more potential reporting measurements to use in the designation.
The agency is also releasing a request for information on how hospitals and other providers can better prepare for the effects of climate change, and how the HHS can help them in that effort.
After hospitals faced great difficulty in acquiring enough personal protective equipment in the early months of the pandemic as COVID-19 strained the global supply chain, the CMS proposed a payment adjustment to help hospitals buy approved, domestically made N95 respirators.
Premier lauded this plan. In May 2020, the company joined with 15 health systems to acquire a minority stake in the largest domestic producer of face masks, Prestige Ameritech. Premier said its members would commit to buying a certain amount of their masks annually from Prestige for at least six years.