The American Hospital Association (AHA) is turning to lawmakers to pressure the Biden administration to change “woefully inadequate” payment rates proposed for next year.
The AHA sent a letter Friday to congressional leaders surrounding the proposed Inpatient Prospective Payment Systems (IPPS) rule, which sets inpatient rates for next year. The hospital lobbying group charged that facilities are facing major challenges not just from the pandemic.
“Historic inflation has extended and heightened the already severe economic instability brought on by the pandemic resulting in razor-thin operating margins from massive surges in input costs, including a struggling workforce, drug costs, supplies and equipment,” the letter said.
The Centers for Medicare & Medicaid Services (CMS) had proposed a market basket update of 3.2% to Medicare payments for the 2023 federal fiscal year that begins this fall. This was on top of a 2.7% payment update for 2022. The proposed rule released in April calls for a proposed 0.4 percentage point productivity adjustment.
AHA contends that the market basket and productivity update don’t reflect the major inflation jump and growth in expenses.
“More recent data shows the market basket for [fiscal year] 2022 is trending toward 4%, well above the 2.7% CMS actually implemented last year,” the group wrote. “Additionally, the latest data also indicate decreases in productivity, not gains.”