Hospitals to receive a proposed 3.2% payment increase in 2023

The Hospital Inpatient Prospective Payment System proposed rule is expected to increase hospital payments by $1.6B.

April 19, 2022, Susan Morse, Executive Editor

General acute care hospitals are projected to get a 3.2% increase in operating payment rates under the Hospital Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System proposed rule released Monday by the Centers for Medicare and Medicaid Services.

CMS estimates that payments to hospitals will increase in 2023 by $1.6 billion. The proposed increase applies to acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting Program and are meaningful electronic health record users.

The 3.2% increase reflects a market basket update of 3.1% reduced by a projected 0.4 percentage point productivity adjustment and an increase of 0.5% required by statute. In addition, CMS projects Medicare disproportionate share hospital payments and Medicare uncompensated care payments combined will decrease by approximately $0.8 billion. 

Under current law, additional payments for Medicare Dependent Hospitals and the temporary change in payments for low‑volume hospitals are set to expire in 2023. In the past, these payments have been extended by legislation, but if they do expire CMS estimates that payments to these hospitals would decrease by $0.6 billion.  

Long-term care hospitals’ payments are projected to increase by about $25 million. Payments are expected to increase by approximately 0.7% due primarily to the annual standard federal rate update for 2023 of 2.7% and a projected decrease in high cost outlier payments.


Chris J. Stewart

Chris currently serves as President and CEO of Surgio Health. Chris has close to 20 years of healthcare management experience, with an infinity to improve healthcare delivery through the development and implementation of innovative solutions that result in improved efficiencies, reduction of unnecessary financial & clinical variation, and help achieve better patient outcomes. Previously, Chris was assistant vice president and business unit leader for HPG/HCA. He has presented at numerous healthcare forums on topics that include disruptive innovation, physician engagement, shifting reimbursement models, cost per clinical episode and the future of supply chain delivery.

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