(May 1, 2024) - On April 10, 2024, the Centers for Medicare & Medicaid Services released the federal fiscal year 2025 proposed rule for the Medicare Inpatient Prospective Payment System. The proposed rule reflects the annual updates to the Medicare fee-for-service inpatient payment rates and policies. In addition to the regular updates to wage indexes and market basket, key highlights include:
- IPPS overall rate change: +2.59 percent
- Uncompensated care payments to disproportionate share hospitals will increase by approximately $56 million.
- Proposed changes to core based statistical area delineations
- 54 counties would change from urban to rural areas and 54 would change from rural to urban areas.
- Proposal to continue the low Wage Index bottom quartile policy for at least three more years, beginning FFY 2025
- Allows the wage data to stabilize following significant wage changes coming out of the pandemic. This will prevent the low wage index effects from being skewed.
- Separate IPPS payment for small, independent hospitals to maintain a buffer stock of essential medicines.
- Graduate Medical Education proposal to increase 200 new physician residency positions, half of those being in psychiatric beginning FFY 2026
- Request For Information – IPPS payment rates for maternity care by other payers.
- Changes to Hospital Consumer Assessment of Healthcare Providers and Systems measure for Inpatient Quality Reporting and Value-Based Purchasing programs.
- Transforming Episode Accountability Model proposed new mandatory model 2026-2030.
- Would support patients with Medicare undergoing certain surgical procedures by promoting better care coordination, seamless transitions between providers and successful recovery.
- Included procedures: lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft and major bowel procedures.
- 200 CBSAs will be selected nationwide.
- Three tracks of financial risk
Program changes will be effective for discharges on or after Oct. 1, 2024, unless otherwise noted. CMS estimates the overall impact of this proposed rule update to be an increase of approximately $3.2 billion in aggregate payments for acute care hospitals in FFY 2025.
Comments on the proposed rule are due to CMS by June 10, 2024 and can be submitted electronically at http://www.regulations.gov by using the website’s search feature to search for file code “CMS-1808-P.”