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Ashley Thompson
Senior Vice President, Public Policy Analysis and Development
ºÚÁÏÕýÄÜÁ¿ Association

April 11, 2025

America’s hospitals and health systems spend too many resources each year on regulatory requirements, forcing many of our clinicians to focus more time completing paperwork than treating patients. The AHA appreciates the Administration’s request for information on approaches and opportunities to streamline regulations and reduce burdens in the Medicare program. We particularly welcome the agency’s emphasis on ways to streamline and focus quality measurement efforts, including by proposing to eliminate the outdated reporting related to staff vaccination rates. We look forward to sharing our ideas and working closely with CMS to further cut down on excessive administrative red tape.

However, we are disappointed to see that the agency proposed an inadequate inpatient hospital payment update of 2.4%, including of particular concern an extremely high proposed productivity cut of 0.8%. We are very concerned that this update will hurt our ability to care for our communities. Indeed, many hospitals across the country, especially those in rural and underserved communities, already operate under unsustainable financial situations, including negative margins. We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high-quality, around-the-clock, essential care for their patients and communities.

Additionally, we appreciate that CMS continues to gather stakeholder feedback and make modifications to the Transforming Episode Accountability Model (TEAM). The AHA has long supported the adoption of value-based and alternative payment models to deliver high-quality care at lower costs; however, we are concerned that TEAM, even with the proposed changes, may force some hospitals to assume more risk than they can manage, threatening their ability to maintain access to quality care. Thus, we continue to urge the agency to make TEAM voluntary.

Finally, the AHA is concerned that the proposed payment updates for long-term care hospitals (LTCHs) would lead to continued strain on these providers as they care for some of Medicare’s sickest patients. In recent years, the outlier threshold has skyrocketed, forcing LTCHs to absorb tens of thousands of additional dollars in losses before Medicare will help cover some costs of extremely ill beneficiaries. CMS’ proposal this year to increase this threshold even more — by an additional $14,199 — coupled with its minimal proposed market basket update, would make it increasingly difficult for LTCHs to care for these patients and alleviate pressure on their acute-care hospital partners. The AHA looks forward to working with CMS to ensure continued access for these patients.

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