'Fails to meet the moment': Hospital groups react to proposed inpatient payment rule

CMS released its annual Inpatient Prospective Payment System proposed rule April 10. Here is how three hospital groups responded to the proposal, via statements:

America's Essential Hospitals: We appreciate the ongoing interest of the Centers for Medicare & Medicaid Services in improving healthcare quality and lowering costs, including through the Inpatient Prospective Payment System.

A key ingredient in efforts to improve healthcare quality, access and equity is creating a common language to guide sound policymaking — including for how we define hospitals that provide safety net care for disadvantaged people and communities.

While CMS recognizes the need to define these providers, the approach it takes in today's IPPS proposed rule would not fully capture hospitals at the core of the nation’s safety net. These hospitals would be best defined by measures that capture the extent to which a hospital disproportionately serves low-income and uninsured patients and the amount of uncompensated care it provides — measures such as those in recently introduced legislation, the Reinforcing Essential Health Systems for Communities Act.

We look forward to working with CMS to establish a more robust definition for safety net providers to ensure the best outcomes for, and participation in, care improvement initiatives, such as the Transforming Episode Accountability Model.

American Hospital Association: CMS' proposed inpatient hospital payment update of 2.6% is woefully inadequate, especially following years of high inflation and rising costs for labor, drugs and equipment. Many hospitals across the country, especially those in rural and underserved communities, continue to operate under unsustainable negative or break-even margins. We urge CMS to reconsider their policy in the final rule so that all hospitals can provide high-quality, around the clock, essential care to their communities. 

The AHA has long supported flexible and widespread adoption of value-based and alternative payment models to deliver high quality care at lower costs. That said, we are very concerned that the agency has proposed a mandatory model for five clinical episodes which expands substantially on the current Comprehensive Care for Joint Replacement model and Bundled Payment for Care Improvement model — neither of which have yielded significant net savings. We continue to encourage CMS to ensure that episode-based payment models are voluntary. Many organizations are not of an adequate size or in a financial position to support the investments necessary to transition to mandatory bundled payment models. Requiring them to take on risk for large, diverse bundles may require more financial risk than they can bear. 

In addition, we are disappointed that CMS has proposed to increase the long-term care hospital outlier threshold, once again, by an extraordinary amount. Expecting LTCHs to absorb an additional $31,048 loss per patient would greatly exacerbate the resource challenges these hospitals face. Long-term care hospitals care for complex patients who require extended hospitalization — a population they provide care for already at a considerable financial loss. As such, we continue to call on CMS to modernize its high-cost outlier policy to ensure access to these essential services for some of Medicare’s most severely ill beneficiaries. Any loss of access would affect not only long-term care hospitals and patients, but also would have ripple effects across the care continuum, such as placing additional burdens on short-term acute care hospitals and their intensive care units.

Federation of American Hospitals: Just like last year, with inflation still stubbornly high, CMS fails to meet the moment by once again proposing an inadequate payment update that will leave hospitals struggling to meet the needs of patients.  

We need Congress to examine the inability of current payments to keep up with rising costs outside hospitals' control, which ultimately jeopardizes patient care at a time when hospitals are being threatened with Medicare cuts. These cuts could lead to closures in rural and underserved areas.

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