CMS Finalizes FY 2024 Medicare Inpatient Hospital Payment Rule

August 16, 2023

On August 1, the Centers for Medicare and Medicare Services (CMS) published its final inpatient prospective payment system hospital rule for federal fiscal year 2024. The provisions of the rule are effective October 1, 2023. WSHA is preparing detailed hospital-specific analyses of the rule which will be sent to designated financial staff for each hospital today (Wednesday, August 16).

CMS finalized a net marketbasket increase of 3.1 percent, (3.3 percent marketbasket minus a .2 percent productivity adjustment). WSHA earlier commented that CMS should provide a larger marketbasket increase and reduce or eliminate the productivity adjustment. The final net increase is more than the 2.8 percent increase that was in the proposed rule, but far less than increases to the cost of providing care due to rising costs for drugs, supplies, and labor. The final rule also includes a significant increase to the outlier threshold.

CMS also finalized a reduction to Medicaid disproportional share hospital funding of about $950 million nationwide, a reduction of about 14 percent, much bigger than was in the proposed rule.  (Andrew Busz,


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