FY2023 Hospital Inpatient Prospective Payment System (IPPS) Final Rule Released

By Policy and Advocacy Brief posted 08-09-2022 14:04


The Centers for Medicare & Medicaid Services (CMS) issued the FY2023 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) Final Rule. Most notably, the rule finalizes:

  • Increase of 4.3% in operating payment rates for general acute care hospitals paid under the IPPS. This reflects a hospital market basket update of 4.1% reduced by a 0.3 percentage point productivity adjustment and increased by a 0.5 percentage point adjustment required by statute. This update is 1.1% higher than the proposed update;
  • Changes to Graduate Medical Education (GME) policies, including a policy to address situations for applying the full-time equivalent (FTE) cap when a hospital’s weighted FTE count is greater than its FTE cap, but would not reduce the weighting factor of residents that are beyond their initial residency period to an amount less than 0.5. Additionally, an urban and a rural hospital participating in the same Rural Training Program (RTP) will be able to enter into an “RTP Medicare GME affiliation agreement” effective July 1, 2023, to promote workforce development and training in rural areas;
  • CMS’ distribution of $6.8 billion in uncompensated care payments to Medicare Disproportionate Share Hospitals (DSH);
  • 5% cap on wage index decreases from its wage index in the prior year, applied in a budget neutral manner through a national adjustment to the standardized amount.

See the fact sheet.

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