FAH looks forward to reviewing in detail the Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long‑Term Care Hospital (LTCH) Prospective Payment System (PPS) proposed rule for FY 2023.

From our initial read, we must conclude the CMS net 3.2% market basket update is woefully inadequate. It does not reckon for the hyper-inflation, staffing crisis, and the continuing pandemic, which will impact resources necessary for patient care well into the future.

To add insult to injury, the policies proposed combined with certain payment policies set to expire would, according to the proposed rule, result in an actual decrease in payments from FY 2022 to FY 2023.

CMS must use the full extent of its authorities to ensure hospitals have the financial wherewithal to ensure seniors retain the access to hospital care that they expect and deserve.

Further misplaced is the drop in uncompensated care DSH payments that hospitals rely on to serve the uninsured. While it would be an achievement for the number of uninsured to go down in the upcoming year as CMS assumes, the retreat of COVID-19-related policies to extend coverage is more likely to send the uninsured numbers in the opposite direction. This is the wrong time to assume the challenge of funding care for uninsured Americans will decline.

On the positive side, we commend CMS for extending its measure suppression policies under its value-based payment programs. It is particularly important that CMS finalize its proposal to eliminate penalties under both the VBP and HAC programs. Hopefully, these programs can get back on course when it is practicable. 

The devil is always in the details, and we will have much more to say about the FY2023 proposed regulation in our comments after we have time to analyze the CMS effort for the coming fiscal year.