AHA Statement on FY 2024 Final IPPS & LTCH Payment Rule

Ashley Thompson
Senior Vice President, Public Policy Analysis and Development
American Hospital Association
 

August 1, 2023

The AHA is deeply concerned with CMS’ woefully inadequate inpatient and long-term care hospital payment updates. The agency continues to finalize rate increases that are not commensurate with the near decades-high inflation and increased costs for labor, equipment, drugs and supplies that hospitals across the country are experiencing.

Moreover, CMS finalized a cut in inpatient hospital disproportionate share hospital (DSH) payments for hospitals that treat many of the most vulnerable patients of almost $1 billion. This staggering amount is based on CMS’ Office of the Actuary’s estimate that the rate of uninsured will decline from 9.2% in FY 2023 to 8.3% in FY 2024. This is an inexplicable assumption given that the Department of Health and Human Services itself estimates that 15 million individuals will leave Medicaid once the continuous enrollment provision comes to an end, only one-third of whom will be eligible for Marketplace subsidies.

We are also disappointed that CMS finalized its proposal to limit the inclusion of patient days for patients who are regarded as eligible for Medicaid benefits under a Section 1115 demonstration project for purposes of the Medicare DSH calculation. This policy could have a devastating impact on access to care for lower-income patients by curtailing much needed resources used to finance health care in historically marginalized communities.
 

In addition, while we appreciate CMS adopting some of our suggested improvements in its long-term care hospital outlier threshold calculation, it still finalized a figure that is 55% higher than it is currently. Most long-term care hospitals cannot afford to absorb such financial losses. We are concerned it will harm their ability to care for the sickest patients – a population they provide care for already at a considerable financial loss.