The Medicare Payment Advisory Commission on Jan. 12 recommended that Congress provide hospitals with a 1 percent increase over current Medicare rates in 2024 to offset inflationary pressures and maintain access to care for Medicare beneficiaries, Axios reported.
In a December letter to MedPAC, the American Hospital Association said recent inflationary pressures were not reflected in Medicare's 2023 payment update for hospitals. Last year, while inflation ranged from 6.2 percent to 9.1 percent, CMS only provided a 2.6 percent payment increase for hospitals.
Inflation has dropped slightly to 6.5 percent, according to the latest data.
In addition to requesting $2 billion more in funding for the Medicare Safety Net Index, the commission also voted for a new strategy to change how they target funds for safety net hospitals by redistributing disproportionate share hospital and uncompensated care payments through the index.
The AHA said in a statement provided to Becker's Hospital Review that it appreciates MedPAC's recommendation to provide hospitals with an additional 1 percent increase over current law Medicare market basket rates, but believes more support is needed to help hospitals tackle macroeconomic and labor challenges.
"We believe an update above and beyond current law is absolutely necessary given the current inflationary environment, ongoing workforce challenges and Medicare's chronic underpayments to hospitals and health systems as detailed in our comments to MedPAC," Ashley Thompson, senior vice president of policy at AHA, said in a statement. "In fact, Medicare only pays 84 cents for every dollar hospitals spend providing care to Medicare patients. We continue to urge the commission to bring Medicare payments back to the level where they cover the cost of providing care to ensure patients have adequate access to care."