AHA Statement on FY 2023 IPPS Final Rule

Stacey Hughes
Executive Vice President
American Hospital Association

August 1, 2022

We are pleased that CMS will provide hospitals and health systems with increased inpatient payments next year, rather than a cut as proposed, allowing them to better provide care for their patients and communities. As we urged, CMS will use more recent data to calculate the market basket and disproportionate share hospital (DSH) payments, which yields far more accurate figures that better reflect the historic inflation and tremendous labor and supply cost pressures hospitals and health systems face. The AHA greatly appreciates the bipartisan groups of senators and representatives who expressed their support for hospitals and health systems by weighing in with CMS on their proposed policy.

That said, this update still falls short of what hospitals and health systems need to continue to overcome the many challenges that threaten their ability to care for patients and provide essential services for their communities. This includes the extraordinary inflationary expenses in the cost of caring hospitals are being forced to absorb, particularly related to supporting their workforce while experiencing severe staff shortages. We will continue to urge Congress to take action to support the hospital field, including by extending the low-volume adjustment and Medicare-dependent hospital programs.

We applaud the agency’s decision not to penalize hospitals under the Hospital Acquired Condition (HAC) Reduction and Value-Based Purchasing Programs next year, recognizing how quality performance has been affected by the COVID-19 pandemic. However, we are concerned that CMS’ decision to publicly report pandemic-distorted data from the HAC Reduction Program’s patient safety indicator could mislead the public and fail to advance patient safety. In addition, while the AHA supports the inclusion of health equity measures in the inpatient quality reporting program, we believe the measures still need further improvements and clarifications to optimize their feasibility, accuracy and meaningfulness. We look forward to continuing to work with CMS to advance health equity.

Finally, we welcome CMS’ decision to not finalize as proposed a policy that would change how 1115 waiver days are counted for purposes of determining Medicare supplemental payments that aid hospitals that serve a large share of low-income and uninsured patients. If finalized, this misguided policy would have put at risk hundreds of millions of dollars for patient care, and potentially jeopardize the eligibility of some hospitals for the 340B drug pricing program, which requires drug companies to provide discounts to hospitals serving low-income patients and vulnerable communities.


Contact:    Colin Milligan, cmilligan@aha.org
                  Sean Barry, sbarry@aha.org