Jasmyne Ray | August 06, 2024
Despite the slight bump, rural and underserved facilities may see significant decreases in their reimbursement payments.
KEY TAKEAWAYS
The finalized rate is 0.3% higher than the previously proposed 2.6% increase.
Payments are expected to increase by $2.9 billion.
Rural hospitals may see a $400 million decrease in payments.
The Centers for Medicare & Medicaid Services (CMS) has issued a final rule increasing Medicare inpatient prospective payment system rates by 2.9% for FY2025.
According to the agency, the update reflects a hospital market basket increase of 3.4%, and a productivity cut of 0.5%. Payments are expected to increase by $2.9 billion and new medical technology payments to increase by $300 million.
However, rural health payments could decrease by $400 million, should legislators decide not to extend the Medicare-dependent hospital and enhanced low-volume adjustment programs. Disproportionate share hospital payments are expected to decrease by $200 million, which is attributed to a decrease in the uninsured rate.
The finalized rate is 0.3% higher than the previously proposed 2.6% increase, which providers have criticized for being too low. Despite the slight bump, their feelings remain unchanged.
The situation is particularly concerning for rural and underserved communities. A statement from the American Hospital Association says the update will “exacerbate” the difficulties hospitals are experiencing as they seek to stabilize their operating margins.
“We are troubled that the final long-term care hospital outlier threshold is nearly 30% higher than it is currently,” Molly Smith, group vice president for public policy, said in a statement.
“Since FY 2021, this figure has increased by more than 180%, which forces these hospitals to absorb hundreds of thousands of dollars in additional losses when caring for the sickest patients.”
Smith added that the increase will negatively impact healthcare access, putting more pressure on acute-care hospitals and other providers who don’t usually care for rural and underserved groups.
Providers and professional groups alike have long been vocal in their criticism of CMS’ low payment rates. Reimbursement payments not covering the cost of care is a continual issue.
In addition to the rates not keeping pace with inflation and rising labor costs, the payments themselves don’t cover the cost of care.
Source: Healthleaders