CMS pitches inpatient payment rule for 2023: 10 things to know

CMS released its annual Inpatient Prospective Payment System proposed rule April 18, which proposes a reimbursement boost for acute care hospitals. 

Here are 10 things to know about the 1,786-page proposed rule:

1. Payment rate update. Under the proposed rule, acute care hospitals that report quality data and are meaningful users of EHRs will see a net 3.2 percent increase in payments in fiscal year 2023, compared to 2022. CMS said the rate adjustment will mean hospitals see an increase of about $1.6 billion in fiscal 2023.

2. Payment adjustment for domestically sourced supplies. CMS is considering adding a payment adjustment for hospitals that source their N95 respirators from domestic manufacturers. "CMS recognizes that hospitals may incur additional costs when purchasing wholly domestically produced … N95 respirators and is seeking comment on the appropriateness of payment adjustments under the IPPS and OPPS that would account for any such additional costs," CMS said in a news release announcing the rule. 

3. Disproportionate share hospital payments. CMS is proposing to distribute about $6.5 billion in uncompensated care payments in fiscal 2023. This represents a decrease of about $654 million from fiscal 2022. 

4. Hospital inpatient quality-reporting program. CMS proposed several changes to the Inpatient Quality Reporting Program, which reduces payment to hospitals that fail to meet program requirements. CMS is seeking to add 10 new measures, including one that assesses a hospital's commitment to equity, one on opioid-related adverse events and one that captures screening of social determinants of health. CMS also proposed requiring a Medicare spending per beneficiary measure beginning in fiscal 2024. 

5. Hospital readmissions reduction program. CMS is proposing to resume the measure that tracks and penalizes hospitals for 30-day readmissions after pneumonia hospitalization beginning in fiscal 2024. The measure was suppressed amid the COVID-19 pandemic. 

6. New hospital designation. The CMS inpatient payment rule officially unveils the proposal to create a new designation to identify "birthing-friendly hospitals." CMS is asking providers for feedback on what to call the new designation.

7. Reporting COVID-19 and flu. The CMS rule proposed requiring hospitals to continue reporting COVID-19 and flu data until April 30, 2024. 

8. Medicare Severity Diagnosis Related Groups. CMS proposed adding zero new MS-DRGs, keeping the number of MS-DRGs at 767 for fiscal year 2023. 

9. Request for feedback. CMS is seeking provider feedback on how to adjust payments for domestically produced N95 masks, how CMS can help hospitals address climate change, what measures CMS should consider to advance health equity, and revisions to digital quality measures, among other items.

10. Comment period. CMS will accept comments on the proposed rule through June 17.

Access the full rule here

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