Tuesday, December 24, 2024

AHA states that proposed inpatient payment rates are significantly insufficient

CMS Proposed Rule: 2.6% Payment Increase for Acute Care Hospitals in 2025

CMS Proposes 2.6% Payment Increase for Acute Care Hospitals in 2025

Last week, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that includes a 2.6% payment increase for acute care hospitals in 2025. This increase is based on a projected 2025 hospital market-basket-percentage increase of 3%, reduced by a 0.4 percentage-point productivity adjustment.

Overall, CMS expects that the proposed changes in operating and capital inpatient payment rates, along with other changes, will result in a $3.2 billion increase in hospital payments in 2025. Additionally, CMS estimates that payments for inpatient cases involving new medical technologies will increase by approximately $94 million in 2025.

However, the American Hospital Association (AHA) has expressed concerns about the proposed payment increase. According to Ashley Thompson, senior vice president of Public Policy Analysis and Development for the AHA, the 2.6% increase is “woefully inadequate” given the high inflation and rising costs hospitals are facing. The AHA is urging CMS to reconsider their policy to ensure that all hospitals can continue to provide high-quality care to their communities.

The AHA is also wary of a proposed mandatory model for five clinical episodes, which expands on existing payment models that have not yielded significant savings. The AHA is advocating for voluntary participation in episode-based payment models to avoid placing undue financial risk on hospitals.

In addition to the payment increase for acute care hospitals, CMS has proposed a 2.8% payment rate increase for long-term care hospitals in 2025. The AHA has raised concerns about the financial challenges faced by long-term care hospitals, particularly with the proposed increase in the outlier threshold.

Overall, CMS’s proposed rule for 2025 includes various payment adjustments for hospitals, including reductions for excess readmissions and hospital-acquired conditions, as well as adjustments under the Hospital Value-Based Purchasing Program.

The proposed rule is open for public comment, and more information can be found on the CMS website.

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