On August 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2023 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long‑Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule. In addition to updating Medicare payment rates and policies for inpatient hospital services in FY 2023, the final rule aims to improve beneficiary access, improve the quality of maternity care, and advance health equity.
Final Payment Rate
The payment update for IPPS hospitals who met quality reporting and Electronic Health Record (EHR) meaningful use requirements is 4.3%, compared to 3.2% in the proposed rule. The 4.3% payment rate reflects a hospital market basket update of 4.1% reduced by a projected 0.3% productivity adjustment and increased by a 0.5% documentation and coding adjustment.
In 2021, CMS established Medicare Severity Diagnosis Related Group (MS-DRG) 018 for Chimeric Antigen Receptor T-cell (CAR-T) services. In the FY 2022 IPPS final rule, CMS finalized its proposal and added procedure codes describing CAR-T services, non-CAR-T services, and other immunotherapies to MS-DRG 018 and updated the title for MS-DRG 018 to “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies” to reflect the additions. In its 2023 final rule, CMS has not made any changes to the processes or methodologies for assigning new procedure codes. CMS continues to assess the appropriateness of the therapies assigned to MS-DRG 018 and will continue to analyze stakeholder feedback, while aiming for transparency in the process.
Improving Maternal Health Outcomes
CMS is establishing a “Birthing-Friendly” hospital designation to be publicly reported on a CMS website. The agency will initially give this designation to hospitals that report “Yes” to the Maternal Morbidity Structural Measure finalized in the FY 2022 IPPS/LTCH PPS final rule for adoption in the Hospital Inpatient Quality Reporting (IQR) Program. CMS will award this designation to hospitals that report “Yes” to both questions in the Maternal Morbidity Structural Measure, indicating that the hospital participated in a national or statewide quality collaborative and implemented all recommended interventions.
Graduate Medical Education Changes
The final rule includes changes to graduate medical education (GME) policies, including increasing flexibility for rural hospitals that participate in a rural track program. CMS is hoping to promote workforce development and training in rural areas, where there are known challenges with access to care.
Improving Health Equity and Advancing Digital Quality
CMS included several Requests for Information (RFIs) in the 2023 proposed rule to gather stakeholder feedback on the impact of climate change and health equity, continuing to advance digital quality measurement, principles for measuring health care quality disparities, and reporting social determinants of health diagnosis codes. CMS summarizes the comments received in the final rule and thanks stakeholders for their feedback. CMS is not proposing any related policy updates in this final rule but will consider stakeholder comments for potential policy updates in future rulemaking.
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