CMS Issues Inpatient Acute and Long-Term Care Hospital Proposed Rule for Fiscal Year 2025

On April 10, 2024, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2025 Medicare hospital inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) proposed rule. Overall, ASHA supports the changes CMS is proposing. Here are some highlights in the proposed rule that would impact those working in inpatient acute care as well as long-term care.

Payment Updates

General acute care hospitals that participate in the Hospital Inpatient Quality Reporting (IQR) program and that use electronic health records (EHRs) are projected to get an operating payment rate increase of 2.6%, an increase of $3.2 billion from FY 2024.

For FY 2025, CMS expects the LTCH standard payment rate to increase by 2.8%, an increase of $26 million over FY 2024 spending.

Social Determinants of Health Codes

IPPS payments are based on the use of hospital resources in the treatment of a patient’s severity of illness, complexity of service, and/or consumption of resources. Generally, a higher severity level designation of a diagnosis code results in a higher payment to reflect the increased hospital resource use.

After reviewing claims data to determine the impact of social determinants of health (SDOH) on resource use, CMS is proposing to update the severity designation of seven International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) diagnosis codes. CMS wants to change these codes – which describe inadequate housing and housing instability – from non-complication or comorbidity (non-CC) to complication or comorbidity (CC).

Hospital Inpatient Quality Reporting (IQR) Program

Within the Hospital IQR program, CMS is proposing:

• to adopt seven new quality measures for the, modify two measures currently used in the program, and remove five measures from the program;
• to increase the total number of electronic clinical quality measures (eCQMs) reported from six to 11 over two years; and
• to make several updates to the Promoting Interoperability Program to separate one existing measure into two distinct measures, adopt two new eCQMs, modify one current eCQM, and increase the performance-based scoring threshold.

Long-Term Care Hospital Quality Reporting Program

CMS proposes to add four new items to the LTCH Continuity Assessment Record and Evaluation Data Set associated with SDOH, including housing insecurity, utilities, and food insecurity. These same assessment items were also proposed for the skilled nursing facility and inpatient rehabilitation facility assessment tools to ensure these items are collected in a standardized way across post-acute care settings.

What’s Next?

ASHA will submit comments on this proposed rule in support of CMS’ efforts to collect and use SDOH data to improve care for Medicare beneficiaries and support efforts to advance health equity. ASHA will also support the increased payment rates for FY2025.

Questions?

See CMS’s fact sheet to learn more about the proposed rule. For questions, please contact ASHA’s health care policy team at reimbursement@asha.org.