Statement on Medicare Proposed Inpatient Prospective Payment System Rule

Rich Umbdenstock
President and CEO
American Hospital Association

April 19, 2010

America's hospitals are deeply disappointed with today's proposal. Plain and simple:  this policy will undermine hospitals' ability to care for patients and communities across the country. 

Should this rule take effect, billions of dollars would be taken out of the system just as hospitals are grappling with sweeping changes and payment reductions contained in the new health reform legislation.  Not only do we believe CMS' analysis is incomplete, we disagree with any further reductions to a system in which, according to independent analyses conducted by MedPAC, hospitals already are being paid less than the cost of providing vital services.
We take issue with the coding offset that assumes inpatient payments have increased solely due to changes in coding - ignoring that hospital patients are getting sicker. Hospitals supported the move toward a more refined payment system that would better characterize patient severity, yet CMS' coding offset distorts any improvements to payment accuracy.

We strongly urge CMS to rethink their analysis regarding the coding offset and hope to work with the agency to eliminate these cuts and protect health care that patients and communities need and deserve. 

About AHA

The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the improvement of health in their communities. The AHA is the national advocate for its members, which includes more than 5,000 member hospitals, health systems and other health care organizations, and 38,000 individual members. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends.