Senators, AHA call on CMS to reevaluate FY 2024 IPPS proposed rule

Wednesday, June 14, 2023

A bipartisan group of over 30 senators recently wrote a letter to CMS to ask the agency to reevaluate the fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) proposed rule. Led by Sens. Robert Menendez (D-N.J.) and Kevin Cramer (R-N.D.), the letter informs CMS of concerns that the proposed payment updates will result in an overall payment reduction for hospitals in FY 2024.

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, according to the letter. 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.

The American Health Association (AHA) expressed similar concerns in a recent comment letter on the proposed rule.

“We are deeply concerned about the inadequacy of the proposed market basket update given the changing healthcare system dynamics and its workforce challenges,” wrote Stacey Hughes, executive vice president of the AHA.

In addition to echoing the senators’ opinion on the market basket and productivity updates, Hughes also detailed the AHA’s concerns about CMS’ disproportionate share hospital payment adjustments and quality-related proposals.

Revenue integrity professionals should review the FY 2024 IPPS proposed rule to determine what changes are relevant to their organization. Reach out to colleagues in other departments to discuss any changes that could have a cross-functional impact. The comment period for this proposed rule ended on June 9, but keep an eye out for further comment by CMS ahead of the final rule’s publication in August.

Editor’s note: Find more NAHRI coverage on IPPS rules here.