A bipartisan group of over 30 senators penned a letter to CMS asking the agency to reevaluate the 2024 inpatient payment rate.
The recent letter sent to CMS, led by Sens. Robert Menendez (D-N.J.) and Kevin Cramer (R-N.D.), informs the agency of concerns that the payment rate increase put forward in the fiscal year (FY) 2024 inpatient prospective payment system (IPPS) proposed rule will actually result in an overall payment reduction for hospitals.
According to the letter, in the FY 2024 IPPS proposed rule CMS relies heavily on data that does not account for the impact of the current elevated costs and expenses in providing healthcare. The senators also pointed out that the productivity update in this proposed rule assumes that healthcare facilities can replicate the general economy’s productivity gains.
“However, the critical financial pressures that hospitals and health systems continue to face have resulted in productivity declines, not gains,” according to the letter.
Each year, CMS is required to update payment rates for IPPS hospitals using the hospital market basket index to account for price changes in goods and services. To ensure Medicare payments more accurately reflect the cost of providing healthcare today, the senators asked CMS to use its special exceptions and adjustments authority to make a retrospective adjustment to the FY 2022 market basket update.
Unsurprisingly, the American Health Association (AHA) is backing the Senators’ letter.
“The AHA thanks Senators Menendez and Cramer for leading this important bipartisan effort urging CMS to ensure hospitals and health systems have the resources they need to continue delivering high-quality care to their patients and communities,” Lisa Kidder Hrobsky, AHA’s senior vice president for advocacy and political affairs said in a statement.
“This support is more needed than ever as the hospital field continues to confront rising inflation, workforce shortages and surging costs for supplies and drugs,” Kidder Hrobsky said.
Earlier this year, the AHA penned its own statement to CMS saying the association was “deeply concerned with CMS’ woefully inadequate proposed inpatient hospital payment update.”
According to CMS, under the FY 2024 IPPS proposed rule, acute care hospitals that report quality data and are meaningful users of EHRs will see a net 2.8% increase in payments in FY 2024 (compared to 2023). However, disproportionate share hospitals could be facing a payment cut of $115 million.
“The critical financial pressures that hospitals and health systems continue to face have resulted in productivity declines, not gains.”
Amanda Norris is the Director of Content for HealthLeaders.
KEY TAKEAWAYS
The payment rate increase in the FY 2024 IPPS proposed rule will actually result in an overall payment reduction for hospitals, a new letter says.