America’s hospitals and health systems — and the more than 6 million team members who go to work each day to help improve the health of their patients and communities — continue to face enormous pressures due to the ongoing effects of the COVID-19 pandemic and the current inflationary economy.
Our recent “costs of caring” report detailed some of the massive increases in input costs when it comes to supporting our workforce, as well as the rising prices for food, energy, drugs, supplies and equipment.
On top of these increased expenses, we continue to face Medicare payment cuts that further threaten our ability to care for our patients and communities. Medicare and Medicaid, which account for more than 60% of all care provided by hospitals and their caregivers, already reimburse less than the cost of providing care. And their reimbursement rates are virtually non-negotiable.
That’s why we were extremely disappointed that the Centers for Medicare & Medicaid Services in its hospital inpatient prospective payment system proposed rule for fiscal year 2023 submitted policies that would result in a net decrease in payments to hospitals compared to the previous year.
In doing so, CMS made financial projections based on historical data that do not align with what has transpired during the past few years. The economic “steady-state” assumptions of past trends have been upended by the reality of the pandemic, historic inflation levels and many other factors. As a result, CMS’ proposed market-basket and productivity update would inadequately reimburse hospitals and health systems and further exacerbate the challenges of ensuring access to care in communities.
The good news is CMS’ proposed rule does not mean those policies will be finalized. And we have an opportunity to influence the agency to make these necessary fixes.
The AHA has been making the case to CMS urging it to adjust the market-basket update to account for the unprecedented inflationary environment hospitals and health systems are experiencing, and eliminate the productivity cut. We also have asked Congress to weigh in with the agency to make these changes in its final regulation.
In addition, this week, Sens. Bob Menendez, D-N.J., and Kevin Cramer, R-N.D., began circulating a “Dear Colleague” letter that would be sent to CMS pushing for these important changes, and we hope a similar letter will start circulating soon in the House.
It’s important that we get as many legislators as possible to sign these letters to urge the agency to make the changes in the final rule to help preserve access to care in communities across the country. See this week’s AHA Action Alert for more details, as well as resources and sample messages that you can use to engage your lawmakers.
We’ll keep making the case in Washington, D.C., but we need your reinforcement back home. Your legislators listen to you because you live, you work, and most importantly, you vote in the states and districts they represent.
Please join us in urging Congress and CMS to ensure our caregivers have the resources they need so they can continue doing what they do best — taking care of patients and creating healthier communities.