Hospitals Get a 4.3% Increase in Inpatient Payment Rates in CMS Final Rule

Commentary by: Todd Perman, CCIM, Vice Chairman, Global Healthcare Services

In a historic move earlier this month, the Center for Medicaid Services (CMS) announced the highest market basket update in the last 25 years. Due to higher expected growth in worker compensation, the agency announced that acute care hospitals will get a 4.3% increase in inpatient payment rates. This is a welcomed increase from 3.2% that CMS proposed in April of this year.

Because of this rule, CMS projects payments for 2023 to increase by 2.4%, or $71 million, aligning with CMS’ overall two-fold goal of providing access to healthcare for all Medicare patients and maintaining incentives for effective hospital operations. Over the past two years, hospitals have faced considerable challenges related to revenue, supply chain, staffing shortages and labor expenses. Inflation, of course, has also added to soaring expenses.

While a larger increase was called for by many hospitals, we anticipate this ruling will provide a boost to hospitals to alleviate some of the concerns hospitals continue to face.

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