Statement on the FY 2025 Hospital Inpatient Prospective Payment System Proposed Rule

By Soumi Saha, Senior Vice President of Government Affairs, Premier

Premier is profoundly disappointed that the Centers for Medicare & Medicaid Services (CMS) is once again proposing an update for hospital inpatient services that is dismally deficient given the current fiscal challenges hospitals continue to face. With a mere 2.6 percent payment increase that fails to align with the stark realities of inflation and operational costs, persistent labor shortages and an aging demographic, the sustainability of our healthcare system is jeopardized.

Payment policies should empower hospitals to deliver exceptional, patient-centric care, but the proposed update falls short on this objective. CMS can course correct by implementing more robust methodologies and incorporating new data sources to accurately gauge hospitals' true costs, including comprehensive labor expenses.

New Mandatory Bundled Payment Model

While Premier believes that voluntary models with the appropriate incentives are ideal as they allow providers to select participation based on their mission, abilities and market realities, Premier values CMS’ efforts in seeking stakeholder input last year to help inform the design of its proposed mandatory bundled payment model. As CMS evaluates the design of the new mandatory Transforming Episode Accountability Model (TEAM), Premier strongly urges the agency to incorporate key design principles to help ensure the model achieves its intended purpose of improving beneficiary care, lowering Medicare expenditures and increasing care coordination across healthcare settings. Premier also urges CMS to continue to monitor the model for implementation challenges and to actively engage with stakeholders to ensure that the model offers meaningful opportunities for care transformation.