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Pushing Against the Pillars of Power: AHA Makes Its Case to CMS

June 12, 2024

An ancient account tells of a single man who was pitted against an entire community, including its rulers and a throng of thousands. But when push came to shove, it was the solitary underdog who prevailed. How did he accomplish such a feat? He undermined the pillars on which the entire edifice was built.

Pushing back, speaking truth to power, is an American tradition. Recently, the American Hospital Association (AHA) engaged in this time-honored tradition by sending an open letter to one of the federal government’s top healthcare-related agencies.

Back in April of this year, the Centers for Medicare and Medicaid Services (CMS) released its Inpatient Prospective Payment System (IPPS) proposed rule for fiscal year (FY) 2025. Like many of the government’s proposals concerning healthcare, there were controversial components. That is, there were proposals that caused some consternation in certain quarters.

Knowing that such reactions will inevitably ensue whenever it discloses its plans for an upcoming year, the government provides for a period of time during which individuals or organizations can post their responses, complaints, questions and counter-recommendations. The deadline for posting such comments in response to the FY 2025 IPPS proposed rule was June 10. On June 5, the ASA’s senior vice president for public policy analysis and development, Ashley Thompson, issued her thoughts directly to CMS Administrator Chiquita Brooks-Lasure. With only five days to spare, the AHA made the most of its opportunity to provide a little pushback.

Areas of Agreement

The letter began by signaling support for “several of the inpatient PPS proposed rule provisions.” The AHA approved of those proposals designed to aid and stabilize low-volume and Medicare-dependent hospitals. As you may recall, the proposed rule would extend a temporary policy that addresses wage index disparities affecting low-wage index hospitals.

On behalf of the AHA, Ms. Thompson also acknowledged the organization’s appreciation over CMS’ revision of its previous drug buffer stock proposal, which was purportedly in response to AHA feedback. Additionally, the letter expressed support for several of CMS’ quality-related proposals, including most of the updates to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey and the removal of five redundant quality measures from the Inpatient Quality Reporting (IQR) program.

Areas of Concern

Despite the areas of agreement, the AHA—through its vice president—expressed a number of concerns with the proposed IPPS rule for FY 2025. For example, the net payment update of 2.6 percent, as recommended by CMS, was seen by the AHA as entirely inadequate “given the unrelenting financial challenges faced by hospitals and health systems.” The AHA went on in its letter to urge the federal agency to “make a one-time retrospective adjustment to account for what [CMS] missed in the FY 2022 market basket forecast.”

The AHA also expressed their concerns about CMS’s lack of transparency in the underlying calculations for disproportionate share hospital (DSH) payments, disagreeing with the agency’s estimates of the number of uninsured for FY 2025. Ms. Thompson went on to urge CMS to consider additional data by researchers and policy stakeholders to reach a more reasonable estimate of the percent of uninsured.

Finally, a few of the quality-related changes within the proposed rule were taken to task by the AHA, with Ms. Thompson stating:

We urge CMS not to adopt its two proposed new structural measures and not to increase the number of required electronic clinical quality measures. CMS’ proposal to use conditions of participation (CoPs) to compel hospitals to share data with the federal government is both needlessly heavy-handed and inconsistent with the intent of CoPs. Rather than jeopardizing hospitals’ Medicare participation status, the AHA urges CMS to take a more collaborative approach and to invest in the infrastructure needed to make the voluntary sharing of important data on infectious diseases less burdensome and more meaningful.

Hospital executives will have to wait and see if the AHA letter to the CMS administrator will have its intended effect. We will, of course, bring you further details involving the IPPS rule for FY 2025 once it has been finalized by CMS in the next several weeks.

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