2023 Inpatient Prospective Payment System Proposed Rule Released

On April 18, 2022, CMS released a proposed rule for the Inpatient Prospective Payment System (IPPS). In addition to annual policies that promote Medicare payment accuracy and hospital stability, the fiscal year (FY) 2023 IPPS rule includes measures related to payment stability for hospitals, a policy that smooths out significant year-to-year changes in hospitals’ wage indexes, and a solicitation for comments on payment adjustments for purchasing domestically made surgical N95 respirators. As noted in a CMS newsletter, “Specifically, CMS is proposing to apply a 5% cap on any decrease to a hospital’s wage index from its wage index in the prior FY.” In addition, it is also “considering the appropriateness of payment adjustments accounting for additional costs of purchasing surgical N95 respirators made in the U.S.”

Other items from the rule include:

-MS-DRG (Medicare Severity-Diagnosis Related Group) coding adjustment of +0.5% to the standardized amount

-Using FY2021 data in IPPS rate-setting with some methodology modifications to allow for fewer COVID-19 cases in FY2023 (seeking comment on use of methodology modifications)

-Continuing the policy to increase the wage index values for hospitals with low wage index values AND making the wage index decrease cap permanent at 5%.

-Suppressing some factors of the value-based purchasing program and adding an incentive multiplier of 2% for all hospitals.

-Suppressing and changing measures in the Hospital-Acquired Condition program

-Adding additional reporting requirements to the National Healthcare Safety Network (CDC database) for hospital-acquired conditions.

More Information:

• Complete press release
• Proposed payment rule fact sheet
• Proposed rule: Comment by June 17