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April 19, 2022

CMS issues FY 2023 proposed medicare inpatient payment rule

On April 18, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2023 proposed rule for the Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospitals (LTCH) Prospective Payment System. In a press release, CMS Administrator Chiquita Brooks-LaSure said, "This rule … is crucial to the foundation of CMS' vision, ensuring access for all people with Medicare and maintaining incentives for our hospital partners to operate efficiently. This year — through a health equity lens — we are also re-envisioning the next chapter of health care quality and patient safety."

The rule proposes to increase FY 2023 acute care hospital operating payments by about 3.2%, or $1.6 billion, compared with FY 2022, however CMS estimates the overall impact of rule would result in a decrease of approximately $0.3 billion in FY 2023. Throughout the rule, CMS proposes several ways to increase health equity, a major priority for the Biden administration, including proposing new health equity measures and issuing requests for feedback on ways to better incorporate health equity data into hospital quality programs and understand how hospitals think about social determinants of health and climate change. The rule also proposes three new quality measures aimed at improving maternal health along with a new "Birthing-Friendly" hospital designation based on the proposed maternal morbidity measure.

CMS also proposes to continue suppressing certain hospital measures to account for the COVID-19 pandemic's impact, along with a handful of policies related to the COVID-19 public health emergency (PHE), including proposals to require hospitals to continue reporting on COVID-19 cases. CMS is accepting public comment until June 17.

Press Release, Fact Sheet, Proposed Rule, Health Equity and Maternal Health Press Release, Maternal Health Fact Sheet

Additional information is also available in the attached Tax Alert.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Heather Meade (
   • Heather Bell (


FY 2023 proposed medicare inpatient payment rule