WASHINGTON, D.C. — Congresswoman Carol Miller (R-WV) sent a bipartisan letter with Congressman Brad Schneider (D-IL) and 110 of their colleagues to Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure urging the agency to make payment updates to the hospital inpatient prospective payment system (IPPS) proposed rule for fiscal year (FY) 2023 to better account for the economic impacts hospitals are facing due to COVID-19 and inflation.
The lawmakers said in part, “The historical data CMS referenced to forecast the expected health care cost could neither predict the effect of economy-wide inflation nor the increased supply chain demand and labor cost associated with COVID-19. We are concerned that the payment update hospitals received in FY 2022 and the proposed FY 2023 market basket update does not sufficiently account for these critical financial pressures. This could result in a regrettably inadequate payment update that would not provide IPPS hospitals with resources needed to provide care to the patients and communities they serve. “
Jim Kaufman, West Virginia Hospital Association President and CEO, said, “The 49,000 employees of West Virginia hospitals thank Rep. Miller for her leadership in coordinating a Congressional letter to the Centers for Medicare and Medicaid Services (CMS). The current economic conditions, workforce shortages, combined with the continued challenges of COVID-19 has put West Virginia hospitals under severe financial pressure and the CMS proposal to update hospitals payments less than inflation is woefully inadequate. We appreciate Rep. Miller and the 111 members of the House for expressing this concern to CMS and ensuring hospitals have the resources they need to serve their communities.”
Under the Medicare program, CMS pays hospitals for inpatient stays under the IPPS. CMS sets these base payment rates prospectively based on a patient’s diagnoses and services performed.
CMS is required to update payment rates for IPPS hospitals each year. A market basket update accounts for the changes in prices of goods and services used by hospitals treating Medicare patients, as well as other factors. In April, CMS released their FY 2023 IPPS Proposed Rule. Under this rule, CMS proposed an increase in operating payment rates under IPPS to be 3.2%, with a hospital market basket update of 3.1%. Unfortunately, the proposed market basket does not accurately reflect the costs hospitals are facing.