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April 12, 2023

CMS issues FY 2024 proposed Medicare inpatient and long-term care hospital payment rule

On April 10, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2024 proposed rule for the Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System. In a press release, CMS Administrator Chiquita Brooks-LaSure said, "This proposed rule reflects our person-centric approach to better measure health care quality and safety in hospitals to reduce preventable harm and our commitment to ensure that people with Medicare in rural and underserved areas have improved access to high-quality health care."

The rule proposes to increase FY 2024 acute care hospital operating payments by about 2.8%, compared with FY 2022. CMS estimates the overall impact of the rule would result in an increase of about $2.7 billion in payments to acute care hospitals paid under the IPPS in FY 2024.

CMS expects the LTCH standard payment rate to increase by 2.9% and LTCH PPS payments for discharges paid the LTCH standard payment rate to decrease by approximately 2.5% or $59 million. Medicare disproportionate share hospital payments and Medicare uncompensated care payments under the proposal would decrease next year by about $115 million, and additional payments for inpatient cases involving new medical technologies would be reduced by $460 million.

Throughout the rule, CMS proposes several ways to increase health equity, an ongoing priority for the Biden administration. CMS also proposes updates to hospital quality and value-based payment programs, among other changes. CMS will accept public comments on the proposed rule through June 9.

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 2024 proposed Medicare inpatient and long-term care hospital payment rule