CMS Issues FY 2023 Final Rule for Inpatient Prospective Payment System
On August 1, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) for fiscal year (FY) 2023. These policies cover inpatient hospital discharges on or after October 1, 2022. Highlights are described below:
- CMS is finalizing their proposal to use FY 2021 MedPAR file and the 2020 Medicare cost report data for ratesetting with modifications to account for the anticipated decline in COVID-19 IPPS hospitalizations.
- The finalized increase in payment rates for acute care hospitals under IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) and demonstrate meaningful use of Electronic Health Record (EHR) program of approximately 3.8 percent. This is based on the projected hospital market basket update of 4.1 percent, reduced by a 0.3 percentage productivity adjustment.
- Finalized code changes include 1,176 new ICD-10-CM codes and 331 new ICD-10-PCS codes. There are no new proposed MS-DRGs.
- W.L. Gore and Associates, Inc., submitted an application for new technology add-on payments (NTAP) for the GORE® TAG® Thoracic Branch Endoprosthesis (TBE) device for FY 2023. CMS approved this NTAP in the final rule. The maximum new payment for a case involving the GORE® TAG® TBE device would be $27,807 for FY 2023 (65% of the average cost of the technology).
- CMS is finalizing the unadjusted national average hourly wage at $47.79. This includes adjustment of the labor-related share for discharges occurring on or after October 1, 2022, of 67.6 percent, which was finalized for FY 2022. CMS is finalizing not to make any further changes to the labor-related share, and therefore continuing to use 67.6 percent for FY 2023.
- CMS is finalizing their proposal to continue applying a 5 percent cap policy to prevent yearly variations in the wage index as a way to reduce overall instability for hospitals. Therefore, a hospital’s wage index would not be less than 95 percent of its final wage index from the prior fiscal year. Additionally, application of this wage index cap would be done in a budget neutral manner through a national adjustment to the standardized amount.
- Finalized changes to the Hospital Readmissions Reduction Program include modification of specific measures to exclude COVID-19 patients and/or patients with a history of COVID-19.
- Finalized changes to the performance standards for the Hospital Value-Based Purchasing (VBP) program include a multiple measure suppression; baseline period updates; and scoring/payment methodology revisions.
- For hospitals excluded from IPPS payment, CMS has finalized their proposed rate-of-percentage of 4.1, which will be applied to the FY 2022 target amounts to calculate the FY 2023 target amounts.
The complete IPPS proposed rule summary can be found on the GORE Coding Resource Center website under “Education – CMS Rules Updates”: https://gore.rccsclients.com/education/rules-updates/.
