The Centers for Medicare & Medicaid Services (CMS) on Tuesday released the fiscal year 2024 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) rule.
The CMS final rule increases payment rates in fiscal year 2024 for acute care hospitals paid under IPPS that successfully participate in the quality reporting program and are meaningful users of electronic health records. CMS increased rates by 3.1 percent, which reflects a hospital market basket update of 3.3 percent, as well as a productivity adjustment cut of 0.2 percent. This will increase hospital payments by $2.2 billion.
The agency also projects Medicare disproportionate share hospitals payments and Medicare uncompensated care payments will decrease by approximately $957 million in 2024. CMS also estimates that additional payments for inpatient cases involving new medical technologies will decrease by $364 million because of new technology add-on payments for several technologies set to expire.
For long-term care hospitals, CMS expects the standard payment rate to increase by 3.3 percent and for payments for discharges to increase by approximately 0.2 percent, or $6 million.
“As part of CMS’ health equity goals, we are rewarding hospitals that deliver high-quality care to underserved populations and, for the first time, also recognizing the higher costs that hospitals incur when treating people experiencing homelessness,” said CMS Administrator Chiquita Brooks-LaSure, in an announcement. “With these changes, CMS is laying the foundation for a health system that delivers higher quality, more equitable, and safer care for everyone.”
But the American Hospital Association (AHA) said the payments updates are inadequate. In a statement, Ashley Thompson, senior vice president, public policy analysis and development, AHA, said the increases don’t keep up with the “near decades-high inflation and increased costs for labor, equipment, drugs, and supplies that hospitals across the country are experiencing.”
Thompson also pointed out that CMS finalized a cut in inpatient hospital disproportionate share hospital (DSH) payments for hospitals that treat many of the most vulnerable patients of almost $1 billion. “This staggering amount is based on CMS’ Office of the Actuary’s estimate that the rate of uninsured will decline from 9.2 percent in FY 2023 to 8.3 percent in FY 2024. This is an inexplicable assumption given that the Department of Health and Human Services itself estimates that 15 million individuals will leave Medicaid once the continuous enrollment provision comes to an end, only one-third of whom will be eligible for Marketplace subsidies.”
Other key changes in the final rule:
- Finalizes a health equity adjustment in the scoring methodology for the Hospital Value-Based Purchasing Program that rewards hospitals that serve higher proportions of dual-eligible patients for providing excellent care. Hospitals will have the opportunity to earn up to 10 bonus points depending on their performance on existing quality measures and the proportion of dually eligible patients they treat.
- Provides higher payment to hospitals that treat people experiencing homelessness when hospitals report social determinants of health codes on claims.
- Adopts three electronic clinical quality measures within the Hospital Inpatient Quality Reportingand Medicare Promoting Interoperability Programs beginning with the CY 2025 reporting period to foster safety and reduce preventable harm in the hospital setting.