Press Release

Statement on Final FY 2017 Inpatient and LTCH Rule

Tom Nickels

Executive Vice President
American Hospital Association

August 2, 2016

Today, CMS finalized a rule that is a mixed bag for hospitals and the patients they serve. On the one hand, we are pleased CMS reversed the effects of the 0.2 percent payment reduction that was part of the original “two-midnight” policy, and restored the resources that hospitals are lawfully due. 

In addition, we commend the agency for pausing the incorporation of “Worksheet S-10” data in order to improve its accuracy and consistency in determining the cost of treating uninsured patients. We will continue to advocate that CMS adopt a broad definition of uncompensated care that includes Medicaid shortfalls and discounts to the uninsured, and fully accounts for graduate medical education expenditures.

However, we are disappointed that CMS finalized an unjustified cut to reimbursement rates for hospital services. While a reduction to the hospital update factor was mandated by law in 2012, CMS is undermining Congress’ intent by imposing a cut that is nearly two times what Congress specified. And while CMS reduced its proposed requirements on reporting electronic clinical quality measures, much more work needs to be done to ensure that the measures are valid and reliable before broad-scale implementation. 

Lastly, we are deeply disappointed that CMS is implementing the long-term care hospital (LTCH) 25% Rule. This arbitrary decision discounts the transformation that the LTCH field is undergoing and has the potential to negatively affect patient access to care.

About the AHA

The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the health improvement of their communities. The AHA is the national advocate for its members, which include nearly 5,000 hospitals, health care systems, networks, other providers of care and 43,000 individual members. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends. For more information, visit the AHA website at

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