FY 2023 Inpatient Prospective Payment System/LTCH Final Rule Summary

On August 1, 2022, CMS released its final rule describing federal fiscal year (FY) 2023 policies and rates for Medicare’s inpatient prospective payment system (IPPS) and the long-term care hospital (LTCH) prospective payment system (PPS). The final rule was published in the Federal Register on August 10, 2022. The payment rates and policies described in the IPPS/LTCH final rule (CMS-1771-F) affect Medicare’s operating and capital payments for short-term acute care hospital inpatient services and services provided in LTCHs. The FY 2023 IPPS final rule also updates CMS’ quality reporting, value-based purchasing and promoting electronic health record interoperability programs. The final rule also sets forth rate-of-increase limits for inpatient services provided by certain IPPS-Exempt providers, such as cancer, children’s hospitals, and religious nonmedical health care institutions which are paid based on reasonable costs. Unless otherwise specified, policies will be effective October 1, 2022.