On August 2, 2021, the Centers for Medicare and Medicaid Services (CMS) published the fiscal year 2022 Inpatient Prospective Payment System (IPPS) final rule that includes annual updates to operating rates and payments for acute care hospitals, including uncompensated care and wage index updates. The 2022 IPPS rule also updates requirements for the Inpatient Quality Reporting program, inpatient pay-for-performance programs, and Medicare hospital Promoting Interoperability (PI) program.
CMS uses the inpatient prospective payment system (IPPS) to pay acute care hospitals for inpatient stays under Medicare Part A. The payment system categorizes each case into a Medicare severity-diagnosis related group (MS-DRG) to determine payment rates. Hospitals may receive additional payments based on certain factors, such as the proportion of low-income patients, outlier cases, or whether the hospital is a teaching hospital.
Payments under IPPS also are impacted by a hospital’s participation in the Hospital Inpatient Quality Reporting, Promoting Interoperability, Hospital Readmissions Reduction, Hospital-Acquired Condition Reduction, and the Hospital Value-based Purchasing programs.