Medicare 2024 hospital inpatient PPS rule gives 2.8% raise


Hospitals complying with quality reporting rules and the electronic health records meaningful-use policy would get a 2.8% net increase in Medicare reimbursements in fiscal 2024 under the hospital inpatient prospective payment system proposed rule published Monday by the Centers for Medicare and Medicaid Services.

Hospital inpatient rates for the coming fiscal year are the result of a 3% market basket increase minus a 0.2 percentage point reduction based on projected productivity improvements. Facilities penalized for excess readmissions or hospital-acquired conditions would receive lower reimbursements, while participants in the value-based purchasing program would see their rates adjusted upward or downward based on performance.

Under the proposed rule, CMS would maintain the low-wage hospital policy that caps wage index decreases at 5%. CMS is using fiscal 2019 data to calculate the fiscal 2024 wage index until more data becomes available.

Hospital groups protested that CMS’ proposals are unrealistic amid a challenging economic environment.

“The [American Hospital Association] is deeply concerned with CMS’ woefully inadequate proposed inpatient hospital payment update of 2.8% given the near decades-high inflation and increased costs for labor, equipment, drugs and supplies. Moreover, long-term care hospitals would see a staggering negative 2.5% payment update under this proposal. These insufficient adjustments are simply unsustainable,” Ashley Thompson, senior vice president for public policy analysis and development, said in a news release.

“This IPPS proposed inflationary payment update is disappointing,” Federation of American Hospitals President and CEO Chip Kahn said in a news release. “It fails to recognize today’s headwinds that will strain the health safety net in 2024, which will further threaten patients’ access to care as hospitals are forced to reduce services or in some cases, especially rural areas, close completely.”

Likewise, America’s Essential Hospitals said it was concerned about the 2.8% payment rate as well as by the proposal to cut Medicare disproportionate share hospital payments by more than $200 million. “Ongoing pressures, such as inflation and high labor and supply costs, demand a stronger investment by Medicare, a critical source of support for essential hospitals and the communities they serve,” Beth Feldpush, the group’s senior vice president of policy and advocacy, said in a news release.

Safety and equity

The draft regulation also seeks to further CMS’ efforts to address patient safety and health equity through the payment system. “This proposed rule reflects our person-centric approach to better measure healthcare quality and safety in hospitals to reduce preventable harm and our commitment to ensure that people with Medicare in rural and underserved areas have improved access to high-quality healthcare,” CMS Administrator Chiquita Brooks-LaSure said in a news release.

CMS proposes three new quality reporting measures: pressure injuries; acute kidney injuries; and excessive radiation exposure. The agency also intends to modify three quality measures: hybrid all-cause risk standardized mortality; hybrid hospital-wide all-cause readmission; and COVID-19 vaccinations of healthcare personnel. And CMS proposes scrapping three measures: hospital-level risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty; Medicare spending per beneficiary; and elective delivery prior to 39 completed weeks’ gestation.

The inpatient prospective payment system proposed rule for fiscal 2024 also seeks to advance CMS’ health equity agenda. The agency proposes adding 15 equity-related measures on which to collect data. The draft regulation also would increase the severity measures for homelessness as a complication or comorbidity.

Long-term care hospitals

The same draft regulation includes proposed prospective payment system updates for long-term care hospitals. The standard payment would rise 2.9% in fiscal 2024, while dual-rate payments would decrease 0.9%.

Alex Kacik and Lauren Berryman contributed to this story.


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