2023 IPPS final rule: CMS finalizes 4.3% payment bump for hospitals

Wednesday, August 10, 2022

On August 1, CMS issued its fiscal year (FY) 2023 Inpatient Prospective Payment System (IPPS) final rule, applying to discharges occurring on or after October 1, 2022.

“The increase in operating payment rates for general acute care hospitals paid under the IPPS, that successfully participate in the Hospital IQR Program and are meaningful electronic health record (EHR) users, is 4.3%,” CMS said in the rule’s fact sheet. This update is a 1.1% increase compared to the 3.2% originally proposed in April, reflecting the most recent data available of the FY 2023 hospital market basket update and a revised outlook of the United States economy. According to the announcement, hospitals may be subject to other payment adjustments under the IPPS, including:

Payment reductions for excess readmissions under the Hospital Readmissions Reduction Program (HRRP)
Payment reduction (1%) for the worst-performing quartile under the Hospital-Acquired Condition (HAC) Reduction Program
Upward and downward adjustments under the Hospital Value-Based Purchasing (VBP) Program

Among other changes, CMS has added three health equity-focused measures.

In line with the proposed rule, CMS did not add any MS-DRGs for FY 2023, maintaining the total number at 767 for the coming year. Additionally, despite soliciting comments, no changes were made to the social determinants of health code designations, though CMS stated in the fact sheet that they received many comments saying that codes describing homelessness should be given CC status. CMS said that they would take these comments under consideration.

In addition to the final rule, the Official Guidelines for Coding and Reporting for FY 2023 have also been issued. Notably, the update includes a new line under the “guideline 19” under Section I.A.19 that directs that “if there is conflicting medical record documentation, query the provider.”

Editor's note: A version of this article originally appeared in CDI Strategies.