2023 IPPS UPDATE – Effective 10.1.2022

IPPS inpatient prospective payment system – or IPPS – updates are a go for October 1, 2022. Here are the most significant changes regarding payment, reporting and requested feedback that will go into effect on that date.



  1. 2% increase in payment in 2023 – $1.6B overall.
  2. $654 M decrease in DSH payments – $6.5B overall.
  3. Proposed revision to DSH calculation of inpatient days to patients eligible for Medicaid through a Section 1115 expansion waiver or patient purchased insurance with the use of premium assistance under a 1115 wavier. Charity care days at risk of being eliminated from calculation.
  4. $25M increase in LTCH PPS payments overall.
  5. Continuation of low-wage index values.
  6. Remove penalties under HAC Reduction Program to account for Covid-19.
  7. Exclude Covid-19 diagnosed patients from HRRP calculations.


  1. Continued reporting of Covid-19 and flu to CDC until April 30, 2024
  2. Hospital commitment to health equity – mandatory 2023
  3. Voluntary in 2023 screening and reporting for social drivers of health – mandatory in 2024
  4. Voluntary in 2023 screening for positive rate for social drivers of health – mandatory 2024
  5. Voluntary in 2023 C-section birth clinical quality measures electronic reporting – mandatory 2024
  6. Voluntary reporting of severe obstetric complications – mandatory 2024

Requests for Information (RFIs)

CMS’ goal is to gather and analyze data to improve patient outcomes. To achieve their objective, the federal government (Medicare/Medicaid) seeks input from healthcare providers and professional associations on the following:

  1. “Birthing Friendly” designation – CMS seeks input from the AHA and national or state subspecialty associations on how policies, programs and quality measures can improve the quality of maternity care, reduce disparities, and improve outcomes. CMS suggests establishing a national perinatal quality improvement initiative.
  2. SDoH reporting – social determinants of health reporting – In 2021, 11 new Z codes were added to provide data on SDoH. CMS seeks feedback from same orgs, etc. on how the reporting of these diagnosis codes can impact MS-DRG rates and assignment.
  3. Healthcare disparities – CMS seeks input on establishing measures to quantify healthcare disparities, identify differences in performance outcomes, and how to report on these results.
  4. Climate Change – CMS seeks input on how providers can prepare for climate change, identity its effect on patients, plan for emergencies, and track emissions and their reduction.


For more information, read the CMS fact sheet.