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AHA Jan. 5 thanked the Medicare Payment Advisory Commission for its draft recommendation to provide a current-law market basket update plus 1.5% for the hospital inpatient and outpatient prospective payment systems in 2025, but urged the commission to recommend a higher update to account for the sustained and substantial financial pressures hospitals face.

“According to MedPAC, Medicare margins hit a record low in 2022 at negative 12.7% when excluding COVID-19 pandemic relief funds and negative 11.6% when including COVID-19 pandemic relief funds,” the letter notes. “Furthermore, MedPAC projects 2024 Medicare margins to remain depressed at negative 13%.”

Among other comments, AHA urged the commission to recommend current law updates for inpatient rehabilitation facilities, hospital-based skilled nursing facilities and home health agencies; and a higher update for physicians to more fully account for the impact of inflation.