Statement on Biden Administration FY 2023 Inpatient Prospective Payment System Proposed Rule

By Blair Childs, Senior Vice President, Public Affairs

Premier is concerned that the payment update of 3.2 percent does not adequately account for the increased labor costs hospitals are currently experiencing. As we detail in a recent PINC AI™ analysis, hospitals’ labor rates alone jumped 16.6 percent on a per-paid-hour basis since Q4 2020 and do not show signs of slowing. Considering that labor accounts for nearly 68 percent of the CMS market basket calculation, the proposed payment update fails to cover the actual costs.

We applaud CMS for creating a “Birthing Friendly” hospital designation. The structural measure that hospitals are required to report is an important first step. Premier looks forward to continuing to work with HHS to drive improvements in maternal-infant health outcomes through HHS’s Perinatal Improvement Collaborative (HHS PIC). The data collected under this project will help us define new measures of maternal healthcare, including considerations for social determinants of health.

We further appreciate CMS’ consideration of incentives for healthcare providers to purchase domestic manufactured N95 respirators. Premier has long advocated that the creation of a resilient and sustainable domestic manufacturing base for critical medical supplies requires incentives to offset higher acquisition costs.