CMS Issues Proposed Rule for Inpatient Hospitals, LTCHs

Citing a growing emphasis on the social determinants of health (SDoH), federal officials this week unveiled a Proposed Rule for inpatient and long-term care hospitals (LTCHs) for the 2025 fiscal year (FY).

Strengthening emergency preparedness and improving maternal health were two other key areas of focus for the Centers for Medicare & Medicaid Services (CMS), which noted that it is seeking to support historically underserved and under-resourced communities while promoting value-based care.

“Hospitals should be a place you go into and get the care you need, regardless of whether you’re struggling to afford your rent, the color of your skin, or what else is going on in the world around you,” U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra said in a statement. “The Biden-Harris Administration is doing everything in its power to ensure hospitals have the prescription drugs and supplies they need so providers can focus on what they do best – helping our loved ones be healthy.”

A press release on the Proposed Rule noted that the proposed increase in operating payment rates for certain acute-care hospitals was set at 2.6 percent, applying to facilities that a) receive CMS payments under the Inpatient Prospective Payment System (IPPS), b) successfully participate in the Hospital Inpatient Quality Reporting program, and c) are “meaningful” electronic health record users. CMS said it expects the proposed increase in operating and capital IPPS payment rates, in addition to other changes, would generally increase hospital payments by $3.2 billion.

For LTCHs, the increase would be 2.8 percent.

“CMS is proposing changes that will create a more equitable and resilient health care system,” CMS Administrator Chiquita Brooks-LaSure said. “Our proposals around payment and quality focus on rewarding better outcomes and supporting hospitals in their efforts to reach underserved communities and meet their needs. We are also seeking public comment on additional efforts to drive improvements in access to quality care during pregnancy, childbirth, and postpartum.”

Specifically, officials noted, the SDoH emphasis includes measures to increase payments and support to hospitals providing services for individuals experiencing homelessness, sickle cell disease, maternal complications, and behavioral health issues, with new data elements and add-on payments part of the mix. As it pertains to behavioral health services, the rule implements section 4122 of the Consolidated Appropriations Act of 2023, which requires that at least half of the 200 new graduate medical education slots made available in 2026 under the law go towards psychiatry or psychiatry subspecialties.

“Building on lessons learned from the COVID-19 pandemic, CMS is (also) proposing a permanent streamlined data reporting structure for COVID-19, influenza, and respiratory syncytial virus (RSV), with additional reporting that could be activated in the event of an emergency,” CMS noted in a press release. “The rule also proposes a new attestation-based measure to assess whether hospitals demonstrate a structure, culture, and leadership commitment that prioritizes patient safety.”

“Hospitals play such a central role in the diverse communities they serve,” said Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare. “Our proposed payments to hospitals further recognize the cost of unmet social needs, advance access to innovative and essential treatments, expand the behavioral health workforce, and ultimately help provide hospitals the vital tools they need to better serve all communities.”

The FY 2025 IPPS and LTCH PPS proposed rule 2025 has a 60-day comment period. The proposed rule can be downloaded from the Federal Register online here: https://www.federalregister.gov/public-inspection/2024-07567/medicare-and-medicaid-programs-and-the-childrens-health-insurance-program-hospital-inpatient

For a fact sheet on the IPPS/LTCH PPS proposed payment rule, visit: https://www.cms.gov/newsroom/fact-sheets/fy-2025-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-hospital-prospective

Mark Spivey is a national correspondent for RACmonitor and ICD10monitor who has been writing and editing material about the federal oversight of American healthcare for nearly 15 years. He can be reached at mcspivey33@gmail.com.