Medicare Finalizes Inpatient Hospital Payment Rules

CMS released the (FY) 2023 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule on August 1, 2022. The rule establishes fee-for-service payment rates and policies for inpatient hospitals and LTCHs. For FY 2023, the hospital payment rate will increase by 4.3% resulting in a $2.6 billion hospital payment increase for FY 2023. CMS finalized graduate medical education policies to increase flexibilities for rural hospitals participating in residency training through rural track programs. Finally, the rule also builds on key CMS priorities to advance health equity. Policy efforts include three new health equity-focused measures in the Inpatient Quality Reporting program and a focus on improving maternal health outcomes with the establishment of a “Birthing-Friendly” hospital designation. The final rule will be effective on January 1, 2023.