CMS Gives Pay Increase in Final Inpatient Payment Rule

05 Aug, 2022 F.J. Thomas


Sarasota, FL ( – On August 1st, CMS released its Inpatient Prospective Payment System final rule in a move that increases Medicare rates for at least some acute care hospitals.

For those acute care hospitals utilizing electronic medical records that have met thresholds while participating in the Hospital Inpatient Quality Reporting (IQR) Program, an increase of 4.3 percent in operating payment rates will be given. CMS stated that this represents a projected hospital market basket update of 4.1 percent reduced by a required productivity adjustment of a 0.3 percent point plus a 0.5 percentage point adjustment required by law. The increase is a result of higher than expected compensation for hospital workers, and represents the highest market basket update in 25 years. CMS expects payments for next year to increase by 2.4 percent, equivalent to $71 million.

CMS Administrator Chiquita Brooks-LaSure believes the rule will help to ensure access stating, “This final rule aligns hospital payments with CMS’ vision of ensuring access to health care for all people with Medicare and maintaining incentives for our hospital partners to operate efficiently.”

While CMS has increased rates, they have also added three new health equity-focused measures to the Hospital Inpatient Quality Reporting Program.

The first measure will track five areas including data collection and analysis, quality improvement, and leadership engagement to gage a hospital’s level of commitment to establishing a health equity culture. The second and third tracking measures involve patient demographics. Some of the elements to be captured include screening and identification of such health-related social needs such as housing instability, transportation needs, utility difficulties, interpersonal safety, and food insecurity. CMS reasons that tracking these measures will help facilities to holistically treat patients, and address issues that are often contributors to poor outcomes for physical and mental health.

On this same note, CMS stated that in the future they have an interest in connecting patients with tracked social needs to resources in the community.

While CMS is continuing the COVID-19 reporting for hospitals and has reduced the number of data categories, they originally proposed to pause the Hospital-Acquired Condition (HAC) Reduction Program, meaning that they will not calculate or publically release reporting related to pressure sores, falls, and sepsis. The reason cited for the pause was a concern that COVID-19 data would have an impact on the ability to interpret the data accurately, resulting in a negative financial impact for hospitals. After much feedback, CMS has decided they will include the quality measure in the hospital Star Ratings for patient and healthcare availability, however the information will not be used in payment calculations due variances of episodes of COVID-19 across the country.

Medical billing and payment information, along with forms, email updates, legal, regulatory, and compliance information from 53 jurisdictions across the U.S. can be found on

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    About The Author

    • F.J. Thomas

      F.J. Thomas has worked in healthcare business for more than fifteen years in Tennessee. Her experience as a contract appeals analyst has given her an intimate grasp of the inner workings of both the provider and insurance world. Knowing first hand that the industry is constantly changing, she strives to find resources and information you can use.

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