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Hospitals secured significantly larger payments from Medicare for 2023, after months of lobbying centered around arguments that inflation and the pandemic have crippled hospitals’ finances.

The increase to the hospital “market basket update” — a key metric that determines the price growth of hospital goods and services — is the largest from Medicare since 1998, the Centers for Medicare & Medicaid Services said in the final rule that came out Monday evening.


Medicare officials originally proposed raising inpatient payments by 3.2% in 2023, but the total increase will now be 4.3% after factoring in more recent inflation numbers, energy costs associated with the war between Russia and Ukraine, changes to the Federal Reserve interest rates, and tighter labor markets.

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