/ en Fri, 25 Apr 2025 16:22:14 -0500 Tue, 22 Apr 25 09:26:18 -0500 /education-events/overview-proposed-ipps-rule-fy-2026 <p><strong>Date:  </strong><br>Thursday, May 22, 2025 <br>12:00 – 1:00 PM Central Time</p><p>This webinar will provide an overview of the published CMS proposed rule for the fiscal year (FY) 2026 Inpatient Prospective Payment System (IPPS).</p><p>The FY 2026 IPPS proposed rule webinar will provide insight to the FY 2026 IPPS proposals related to coding, MS-DRGs, NTAPs and other regulatory proposal considerations.</p><ul><li>MS-DRG Classifications Review – proposed changes and updates</li><li>Severity levels for ICD-10-CM codes – proposed revisions</li><li>Comprehensive CC/MCC Analysis – status and proposals </li><li> New Technology Add-on Payments (NTAPs) – summary of proposals and importance of data capture </li><li>Hospital Inpatient Quality Reporting Program – proposals with potential coding considerations </li><li> Transforming Episode Accountability Model (TEAM) – status and proposals</li><li>Other notable coding related proposals </li><li>References and Questions</li></ul><p><strong>Speaker: </strong><br>Tammy Love, MSHI, RHIA, CCS, CDIP – Director Coding Classification and Policy, ���������� Association</p><p><strong>Webinar Cost: </strong><br>$38/person</p><p>We can only accept credit card payments and no refunds will be processed.<br>Please make sure you are registering for the correct webinar.<br>Please verify your email address before purchasing.</p><p>For group registrations of 30 or more, information can be found <a href="https://sponsors.aha.org/HFC_GEN_Coding_Group_Registration_Landing_Page.html" target="_blank">here</a>.   <br>For registration questions, please email <a href="mailto:codingwebinars@aha.org">codingwebinars@aha.org</a>.</p><p><strong>CEU Information:  </strong><br>1 hour AAPC <br>This program meets AAPC guidelines for 1.0 CEU. Can be split between Core A and all specialties except CIRCC and CPMS for continuing education units.</p><p>1 hour AHIMA <br>This program has been approved for 1 continuing education unit(s) for use in fulfilling the continuing education requirements of the American Health Information Management Association (AHIMA). Granting prior approval from AHIMA does not constitute endorsement of the program content or its program sponsor.</p><p>If you can't attend on the live date, an on-demand link will be provided post-webinar.<br> </p> Tue, 22 Apr 2025 09:26:18 -0500 Inpatient Prospective Payment Systems (IPPS) <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) April 11 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/public-inspection/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the">proposed rule</a> for fiscal year (FY) 2026. This Regulatory Advisory contains highlights of proposals related to the inpatient PPS as well as the Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model. LTCH PPS provisions are covered in a separate advisory.</p><p>The rule proposes a net 2.4% increase for inpatient PPS payments in FY 2026. This update reflects a hospital market basket increase of 3.2% and a productivity cut of 0.8%. It would increase hospital payments by $4 billion, including a proposed $1.5 billion increase in disproportionate share hospital payments and a proposed $234 million increase in new technology add-on payments. Overall, it would increase hospital payments by $4 billion in FY 2026 as compared to FY 2025.</p><p>In addition, CMS has included in the rule its previously published request for information (RFI) seeking input on opportunities to streamline regulations and reduce burdens on providers. </p><div class="panel module-typeC"><div class="panel-heading"><p><strong>Key highlights</strong></p><p>CMS’ proposed policies would:</p><ul><li>Increase inpatient PPS payment rates by a net 2.4% in FY 2026.</li><li>Make minor changes to the mandatory TEAM, including adding a new quality measure and deferring participation for new hospitals.</li><li>Seek input on a low-volume threshold policy for TEAM.</li><li>Discontinue the low-wage index hospital policy for FY 2026.</li><li>Add seven new MS-DRGs and delete six MS-DRGs.</li><li>Remove four measures from the inpatient quality reporting program focused on health equity and COVID-19 vaccination for health care personnel.</li><li>Include Medicare Advantage patients in the calculation of multiple claims-based measures across several programs.</li><li>Shorten the Hospital Readmission Reduction Program’s performance period from three to two years.</li></ul></div></div><h2>AHA Take</h2><p>The AHA welcomes CMS’ interest in regulatory relief, including its focus on streamlining quality measurement efforts. However, we are disappointed by CMS’ proposed inpatient hospital payment update of 2.4%, including 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</p><p>Additionally, we appreciate that CMS continues to gather stakeholder feedback and make modifications to the 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. We are also concerned that the lack of a low-volume threshold will put at particular risk many hospitals that are not of adequate size or in a position to support the investments necessary to succeed. </p><p><strong>See AHA’s </strong><a href="/press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule"><strong>full statement</strong></a><strong> that was shared with the media.</strong></p><p>Highlights of the rule follow.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-releases-hospital-inpatient-pps-proposed-rule-for-fiscal-year-2026-advisory-4-14-2026-r2.pdf" target="_blank" title="CMS Releases Hospital Inpatient PPS Proposed Rule for Fiscal ear 2026"><img src="/sites/default/files/2025-04/cover-cms-releases-hospital-inpatient-pps-proposed-rule-for-fiscal-year-2026-advisory-4-14-2025-r2.png" data-entity-uuid data-entity-type="file" alt="Cover Image of Hospital Inpatient PPS Advisory" width="640" height="828"></a></div></div></div> Mon, 14 Apr 2025 16:17:14 -0500 Inpatient Prospective Payment Systems (IPPS) /press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule <p class="text-align-center"><strong>Ashley Thompson</strong><br><strong>Senior Vice President, Public Policy Analysis and Development</strong><br><strong>���������� Association</strong></p><p class="text-align-center"><strong>April 11, 2025</strong></p><p>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.</p><p>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.</p><p>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.</p><p>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.</p><p class="text-align-center">###</p> Mon, 14 Apr 2025 08:41:37 -0500 Inpatient Prospective Payment Systems (IPPS) /news/headline/2025-04-11-cms-issues-hospital-ipps-proposed-rule-fy-2026 <p>The Centers for Medicare & Medicaid Services April 11 issued a <a href="https://www.federalregister.gov/public-inspection/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the">proposed rule</a> that would increase Medicare inpatient prospective payment system rates by a net 2.4% in fiscal year 2026, compared with FY 2025, for hospitals that are meaningful users of electronic health records and submit quality measure data. <br><br>This 2.4% payment update reflects a hospital market basket increase of 3.2% as well as a productivity cut of 0.8%. This update also reflects CMS’ proposal to rebase and revise the market basket to a 2023 base year. In addition, the rule includes a proposed $1.5 billion increase in disproportionate share hospital payments and a proposed $234 million increase in new medical technology payments. Overall, it would increase hospital payments by $4 billion in FY 2026 as compared to FY 2025.  <br><br>In addition, CMS has included in the rule its previously published request for information seeking input on opportunities to streamline regulations and reduce burdens on providers. <br><br>In a statement shared with the media today, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “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 focus 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. <br><br>“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. <br><br>“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.”  <br><br>Among other provisions, the proposed rule would continue the mandatory TEAM payment model that would provide bundled payment for certain surgical procedures, with limited deferment for certain hospitals. In addition, it would make modifications to the quality measure aspect of the model and remove health equity plans from the model, among other changes. CMS is seeking comments but did not provide proposals on certain issues like low-volume thresholds. Furthermore, CMS would discontinue the low-wage index hospital policy for FY 2026 and establish a transitional exception policy for hospitals significantly impacted by the discontinuation. <br><br>Finally, CMS proposes a number of changes to its quality reporting and value programs. Among other updates, CMS would remove four measures from the inpatient quality reporting program and modify several others. The agency also proposes to include Medicare Advantage patients in calculating hospital performance in the Hospital Readmission Reduction Program. Lastly, CMS proposes to update its extraordinary circumstances exception policy to allow for reporting extensions in addition to outright exemptions. <br><br>CMS will accept comments on the proposed rule through June 10. AHA members will receive a Regulatory Advisory with further details on the rule. </p> Fri, 11 Apr 2025 18:01:46 -0500 Inpatient Prospective Payment Systems (IPPS) /lettercomment/2024-11-26-aha-comments-cms-fy-2025-wage-index-values <div class="container"><div class="row"><div class="col-md-8"><p>November 26, 2024</p><p>The Honorable Chiquita Brooks-LaSure<br>Administrator<br>Centers for Medicare & Medicaid Services<br>Hubert H. Humphrey Building<br>200 Independence Avenue, S.W.<br>Room 445-G<br>Washington, DC 20201</p><p><em><strong>RE: CMS-1808-IFC, Changes to the Fiscal Year 2025 Hospital Inpatient Prospective Payment System (IPPS) Rates Due to Court Decision, (Vol. 89, No. 192), Oct. 3, 2024.</strong></em></p><p>Dear Administrator Brooks-LaSure:</p><p>On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the ���������� Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) hospital inpatient prospective payment system (PPS) interim final action with comment period revising the Medicare wage index values for fiscal year (FY) 2025.</p><p>In FY 2020, CMS implemented a policy to increase the wage indices for certain hospitals with low wage index values. This was done in a budget-neutral manner through an adjustment applied to the standardized amounts for all hospitals. Specifically, the agency increased the wage index for hospitals with a wage index value below the 25th percentile by half the difference between their otherwise applicable wage index value and the 25th percentile wage index value across all hospitals for that year. The agency stated at the time that it intended to implement the policy for at least four years. The agency subsequently extended this low wage index policy and its related budget neutrality adjustment through FY 2024 and 2025.</p><p>However, when extending the policy in the FY 2025 final rule, CMS noted that the policy has been the subject of pending litigation. On July 23, 2024, the Court of Appeals for the D.C. Circuit held that the secretary lacked authority to adopt the policy for FY 2020 and that the policy and related budget neutrality adjustment must be vacated. As a result of this court decision, in this interim final action with comment period, the agency is removing the low wage index policy for FY 2025 and its related budget neutrality factor. However, the agency did not indicate if and how it would address the policy for FYs 2020-2024.</p><p>The AHA has long stated that while we appreciated CMS’ recognition of the wage index’s shortcomings, the agency should not have implemented this policy by penalizing all hospitals, especially when Medicare already pays far less than the cost of providing care. <strong>As such, if CMS does address payments under this policy in FYs 2020-2024, it should not seek a clawback of funds that hospitals received because of the agency’s mistakes and have long since spent on patient care. </strong>These funds supported low-wage hospitals during the COVID-19 pandemic and increased payments by roughly $300 million for the first year of policy.<sup>1</sup> This included helping nearly 800 rural hospitals when rural hospital closures hit an all-time high, with 19 hospitals closing in 2020 and two additional closures in 2021.<sup>2,3</sup> To help ensure the financial viability of hospitals, including rural hospitals, the agency should not seek a clawback of these funds.</p><p>At oral argument in the D.C. Circuit, the Department of Health and Human Services (HHS) counsel was asked whether there was a “scenario where the low budget hospitals that have gotten money would get to keep the money.” Counsel did not state that a clawback is legally required. Instead, counsel answered that the secretary had not yet determined that a clawback is required and that it is “not clear why the Secretary would need to go out” and make such a clawback. Based on its regulations, we presume that CMS will adhere to the position it stated in court. See 42 CFR § 412.64(l) (“If a judicial decision reverses a CMS denial of a hospital’s wage data revision request, CMS pays the hospital by applying a revised wage index that reflects the revised wage data as if CMS's decision had been favorable rather than unfavorable.”); 42 CFR § 412.64(k) (“Except as provided in paragraph (k)(2)(ii) of this section, a midyear correction to the wage index is effective prospectively from the date the change is made to the wage index.”). After all, the inpatient PPS process is, as its name suggests, a “prospective” payment program, and nothing in the text of 42 U.S.C. § 1395ww(d)(3)(E) gives CMS the authority to claw back funds following an adverse judicial decision.<sup>4</sup></p><p>We appreciate your consideration of these issues. Please contact me if you have questions or feel free to have a member of your team contact Shannon Wu, AHA’s director for payment policy, at (202) 626-2963 or swu@aha.org.</p><p>Sincerely,</p><p>/s/</p><p>Ashley B. Thompson<br>Senior Vice President<br>Public Policy Analysis and Development</p><hr><ol><li><small>FY 2020 Final Rule</small></li><li><small>FY 2020 Final Rule</small></li><li><small>https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/</small></li><li><small>See generally Georgetown Univ. Hosp. v. Bowen, 821 F.2d 750, 758 (D.C. Cir. 1987) (“In amending the statute, both Houses of Congress made it abundantly clear that this authority was to be exercised on a prospective basis only: ‘[The authority] to set limits on costs . . . would be exercised on a prospective, rather than retrospective, basis so that the provider would know in advance the limits to Government recognition of incurred costs and have the opportunity to act to avoid having costs that are not reimbursable.’ Senate Report at 188; House Report at 83”); Washington Hosp. Ctr. v. Bowen, 795 F.2d 139, 142 n.2 (D.C. Cir. 1986) (explaining that a prospective payment system is “not subject to retroactive adjustment”); Louisiana Dep’t of Health & Hosps. v. U.S. Dep’t of Health & Human Servs., 566 F. App’x 384, 387 (5th Cir. 2014) (discussing the differences between prospective and retrospective payment systems); Alexander County Hosp. v. Bowen, 692 F.Supp. 606, 609 (W.D.N.C. 1988) (“Thus, under both the APA and the Medicare Act, the Secretary’s authority for rulemaking is prospective, not retrospective. To hold otherwise would give the Secretary unfettered discretion in enacting regulations that give retroactive effect to any or every change that is made in formulas for determining reimbursable costs.”); cf. Paladin Community Mental Health Center v. Sebelius, 684 F.3d 527, 531 n.3 (5th Cir. 2012) (“[F]orcing the Secretary to retroactively alter payment rates for various covered services—e.g., payment rates that are adjusted annually and are required to remain budget neutral—would likely wreak havoc on the already complex administration of Medicare Part B's outpatient prospective payment system.”).</small></li></ol></div><div class="col-md-4"><div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2024/11/2024-11-25-FY2025-IPPS-Interim-Final-Rule-Wage-Index-f.pdf" target="_blank" title="Click here to download the AHA Comments to CMS on FY 2025 Wage Index Values letter PDF.">Download the Letter PDF</a></div><p><a href="/system/files/media/file/2024/11/2024-11-25-FY2025-IPPS-Interim-Final-Rule-Wage-Index-f.pdf" target="_blank" title="Click here to download the AHA Comments to CMS on FY 2025 Wage Index Valuesletter PDF."><img src="/sites/default/files/2024-11/AHA-Comments-to-CMS-on-FY-2025-Wage-Index-Values-Cover.png" data-entity-uuid data-entity-type="file" alt="AHA Comments to CMS on FY 2025 Wage Index Values letter page 1." width="604" height="783"></a></p></div></div></div> Tue, 26 Nov 2024 12:38:24 -0600 Inpatient Prospective Payment Systems (IPPS) <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) Sept. 30 issued an <a href="https://www.federalregister.gov/public-inspection/2024-22765/medicare-program-fiscal-year-2025-hospital-inpatient-prospective-payment-system-rate-changes" target="_blank">interim final rule</a> (IFR) with a comment period on the fiscal year (FY) 2025 hospital inpatient prospective payment system (PPS) low wage index policy. <strong>Specifically, the IFR discontinues the low wage index policy for FY 2025</strong>. CMS first implemented this policy in FY 2020 to address the growing disparities between wage index values for high and low-wage index hospitals. It increases the wage index for hospitals with values below the 25th percentile by half the difference between the otherwise applicable wage index and the 25th percentile value; this was done in a budget-neutral manner.</p><p>However, the low-wage policy was subject to litigation. On July 23, 2024, the United States Court of Appeals for the District of Columbia Circuit held that the “Department of Health and Human Services lacks the power to inflate reimbursement rates beyond the congressionally prescribed wage-index values for an entire quartile of hospitals.” <em>Bridgeport Hosp. v. Becerra</em> 108 F.4th 882, 886 (D.C. Cir. 2024); see <em>id.</em> at 891 (“Because HHS cannot manipulate wage-index rates up and down in a way that picks winners and losers by sweeping aside the congressionally required formula, HHS's wage-index redistribution policy is unlawful”).</p><p>As such, in this IFR, CMS stated that while it disagreed with the D.C. Circuit’s decision, after consideration, it will remove the low wage index policy for FY 2025 and its related budget neutrality adjustment. To mitigate the resulting payment changes for hospitals, CMS will apply its standard 5% wage index decrease cap; however, for this policy only, the cap will <em>not</em> be applied in a budget-neutral manner. The agency estimates that 113 hospitals will be affected by this cap, for a total impact of approximately $41 million of new money.</p><h2>AHA TAKE</h2><p>The AHA appreciates the agency’s recognition of the wage index’s shortcomings. We have long maintained that budget neutrality was not a requirement of the low wage index policy, especially in light of Medicare’s chronic underpayments to hospitals. For example, the Medicare Payment Advisory Commission estimates that hospitals’ aggregate Medicare margins will be <em>negative</em> 13% in 2024. We will continue to work with CMS to ensure that hospitals remain financially sustainable.</p><p>Comments on this rule must be submitted by Nov. 29, 2024.</p><p>If you have further questions, please contact Shannon Wu, AHA’s director of inpatient payment policy, at 202-626-2963 or <a href="mailto:swu@aha.org" target="_blank">swu@aha.org</a>.</p><p> </p></div><div class="col-md-4"><a href="/system/files/media/file/2024/10/cms-releases-hospital-inpatient-pps-interim-final-rule-for-low-wage-index-policy-bulletin-10-1-2024.pdf"><img src="/sites/default/files/inline-images/cover-cms-releases-hospital-inpatient-pps-interim-final-rule-for-low-wage-index-policy-bulletin-10-1-2024-f.png" data-entity-uuid data-entity-type="file" alt="Special Bulletin Cover" width="NaN" height="NaN"></a></div></div></div> Tue, 01 Oct 2024 16:01:52 -0500 Inpatient Prospective Payment Systems (IPPS) /news/headline/2024-10-01-cms-discontinues-ipps-low-wage-index-policy-fy-2025-interim-final-rule <p>The Centers for Medicare & Medicaid Services Sept. 30 issued an interim <a href="https://www.federalregister.gov/public-inspection/2024-22765/medicare-program-fiscal-year-2025-hospital-inpatient-prospective-payment-system-rate-changes">final rule</a> which will discontinue the hospital inpatient prospective payment system low wage index policy for FY 2025. The policy was subject to litigation, and the United States Court of Appeals for the District of Columbia Circuit July 23 held that the secretary lacked authority under the “adjustments” section of the statute to adopt the policy and its related budget neutrality adjustment. CMS stated in the rule that while it disagreed with the court's decision, after consideration, it will remove the low wage index policy for FY 2025 and its related budget neutrality adjustment.</p> Tue, 01 Oct 2024 15:14:30 -0500 Inpatient Prospective Payment Systems (IPPS) Mon, 23 Sep 2024 13:03:15 -0500 Inpatient Prospective Payment Systems (IPPS) <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) Aug. 1 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/public-inspection/2024-17021/medicare-medicaid-and-childrens-health-insurance-programs-hospital-inpatient-prospective-payment" target="_blank">final rule</a> for fiscal year (FY) 2025. The rule affects inpatient PPS hospitals, critical access hospitals (CAHs), LTCHs and PPS-exempt cancer hospitals. A summary of the provisions related to inpatient PPS hospitals, CAHs and PPS-exempt cancer hospitals follows. The final rule will be published in the Federal Register Aug. 28 and provisions generally take effect Oct. 1.</p><p>The AHA will issue a separate advisory on the LTCH PPS-related provisions. Additionally, the AHA will issue a separate advisory on the Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model, also included in this rule.</p><p>The rule finalized a net 2.9% rate increase for inpatient PPS payments in FY 2025 compared to FY 2024. CMS stated that overall, hospital payments will increase by $2.9 billion, which also includes a $200 million decrease in disproportionate share hospital (DSH) and uncompensated care payments, a $300 million increase in new technology add-on payments, and a $400 million decrease in rural health payments if the Medicare-dependent hospital and enhanced low-volume adjustment programs are not extended by legislation. </p><div class="panel module-typeC"><div class="panel-heading"><h2>Key Highlights</h2><p>CMS’ final policies will:</p><ul><li>Increase inpatient PPS payment rates by a net 2.9% in FY 2025.</li><li>Establish a separate inpatient PPS payment for small, independent hospitals to establish and maintain access to essential medicines.</li><li>Distribute new graduate medical education (GME) slots as authorized by section 4122 of the Consolidated Appropriations Act (CAA) of 2023.</li><li>Modify the survey questions in the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, resulting in changes to the sub-measures used to calculate HCAHPS performance in the inpatient quality reporting (IQR) and hospital value based purchasing (HVBP) programs.</li><li>Establish a permanent the condition of participation (CoP) requiring hospitals and CAHs to report certain data to the Centers for Disease Control and Prevention (CDC) on acute respiratory illnesses beginning Nov. 1, 2024.</li><li>Add seven measures to the IQR program, and increase the total number of electronic clinical quality measures (eCQMs) hospitals must report.</li></ul></div></div><h2>AHA TAKE</h2><p>CMS’ payment updates for hospitals will exacerbate the already unsustainable negative or break-even margins many hospitals are already operating under as they care for their patients. The AHA is deeply concerned with these inadequate payments' impact on patient access to care, especially in rural and underserved communities. See the AHA’s full statement on the rule <a href="/press-releases/2024-04-10-aha-statement-fy-2025-proposed-ipps-ltch-payment-rule" target="_blank">here</a>.</p><h2><a><span>WHAT YOU CAN DO</span></a></h2><ul type="disc"><li><strong>Share this advisory with your senior management team</strong> and ask your chief financial officer to examine the impact of the payment changes on your Medicare revenue for FY 2025.</li><li><strong>Verify that you have attested to meaningful use. </strong>Attestation status can be determined through CMS’ <a href="http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/RegistrationandAttestation.html" target="_blank">website</a>.</li><li><strong>Share this advisory with your billing, medical records, quality improvement and compliance departments and clinical leadership team</strong> — including the quality improvement committee and infection control officer — to apprise them of the proposals around the diagnosis-related groups and quality measurement requirements.</li></ul><h2>FURTHER QUESTIONS</h2><p>Please contact Shannon Wu, AHA’s director of inpatient payment policy, at 202-626-2963 or <a href="mailto:swu@aha.org">swu@aha.org</a> and Akin Demehin, AHA’s senior director of quality and patient safety, at 202-626-2365 or <a href="mailto:ademehin@aha.org">ademehin@aha.org</a> if you have further questions.</p><p>View the detailed Regulatory Advisory below.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/08/inpatient-pps-final-rule-for-fy-2025-advisory-8-14-2024.pdf" target="_blank" title="Download the Regulatory Advisory: Inpatient PPS Final Rule for FY 2025 PDF."><img src="/sites/default/files/2024-08/cover-inpatient-pps-final-rule-for-fy-2025-advisory-8-14-2024-703px.png" data-entity-uuid data-entity-type="file" alt="Regulatory Advisory: Inpatient PPS Final Rule for FY 2025 cover." width="NaN" height="NaN"></a></p></div></div></div> Wed, 14 Aug 2024 13:05:29 -0500 Inpatient Prospective Payment Systems (IPPS) <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) Aug. 1 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/public-inspection/2024-17021/medicare-medicaid-and-childrens-health-insurance-programs-hospital-inpatient-prospective-payment" target="_blank" title="the final rule">final rule</a> for fiscal year (FY) 2025. This Special Bulletin reviews highlights of provisions related to the inpatient PPS as well as the Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model, which will begin Jan. 1, 2026. LTCH PPS provisions are covered in a separate Special Bulletin.</p><p>The rule finalizes a net 2.9% increase for inpatient PPS payments in FY 2025. This update reflects a hospital market basket increase of 3.4% as well as a productivity cut of 0.5%. CMS expects overall payments to increase by $2.9 billion, which it says includes a $200 million decrease in disproportionate share hospital (DSH) payments (due to a decrease in the uninsured rate), a $300 million increase in new medical technology payments, and a $400 million decrease in rural health payments if the Medicare-dependent hospital and enhanced low-volume adjustment programs are not extended by legislation.</p><div class="panel module-typeC"><div class="panel-heading"><h2>Key Highlights</h2><p>CMS’ final policies will:</p><ul><li>Increase inpatient PPS payment rates by a net 2.9% in FY 2025.</li><li>Establish a new mandatory CMMI model, the TEAM, that will provide bundled payment for five surgical procedures.</li><li>Create a separate inpatient PPS payment for small, independent hospitals to establish and maintain access to essential medicines.</li><li>Distribute new graduate medical education slots under section 4122 of the Consolidated Appropriations Act of 2023.</li><li>Modify the questions and sub-measures in the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey.</li><li>Increase the Promoting Interoperability Program’s performance threshold score and update the program’s Antimicrobial Use and Resistance Surveillance measure.</li><li>Modify and make permanent the condition of participation (CoP) requiring hospitals and critical access hospitals (CAHs) to report certain data to the Centers for Disease Control and Prevention (CDC) on acute respiratory illnesses</li></ul></div></div><h2>AHA TAKE </h2><p>CMS’ payment updates for hospitals will exacerbate the already unsustainable negative or break-even margins many hospitals are already operating under as they care for their patients. The AHA is deeply concerned about the impact these inadequate payments will have on patient access to care, especially in rural and underserved communities. In addition, while the AHA has long supported widespread adoption of meaningful value-based and alternative payment models to deliver high quality care at lower costs, the rule’s mandatory bundled payment model for five different surgical episodes will not advance these objectives. Not only is the model extremely similar to other bundled payment approaches that have failed to meet the statutory criteria for expansion as they have not reduced program costs or generated net savings, it puts at particular risk many hospitals that are not of an adequate size or in a position to support the investments necessary to succeed. <strong>See AHA’s full </strong><a href="/press-releases/2024-08-01-aha-statement-fy-2025-final-ipps-ltch-payment-rule" target="_blank" title="AHA Statement"><strong>statement</strong></a><strong> that was shared with the media. </strong></p><p>Highlights of the rule follow.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2024/08/cms-releases-hospital-inpatient-pps-final-rule-for-fiscal-year-2025-bulletin-8-1-2024.pdf" target="_blank" title="Click here to download the Special Bulletin: CMS’ Hospital Inpatient PPS Final Rule for FY 2025 PDF."><img src="/sites/default/files/2024-08/cover-cms-releases-hospital-inpatient-pps-final-rule-for-fiscal-year-2025-bulletin-8-1-2024.png" data-entity-uuid data-entity-type="file" alt="Special Bulletin: CMS Releases Hospital Inpatient PPS Final Rule for Fiscal Year 2025 cover." width="NaN" height="NaN"></a></p></div></div></div> Fri, 02 Aug 2024 14:59:03 -0500 Inpatient Prospective Payment Systems (IPPS)