Rural Emergency Hospitals Recognized in CMS Proposed 2024 IPPS Proposed Rule

The 2024 inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) rule updates Medicare payments and policies.

With a focus on America’s healthcare delivery of services to underserved communities, The Centers for Medicare & Medicaid Services (CMS) is proposing that rural emergency hospitals be designated as graduate “medical education training sites,” as described in language associated with the fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) proposed rule released this week.

According to CMS, more medical residents could be trained in rural settings. The agency assumes, in its proposed rule, that such a move could help “address workforce shortages” in rural communities.

Moreover, CMS is also addressing health equity in its Hospital Value-Based Purchasing Program. To achieve this goal, the agency, according to language in its proposed rule, says it will provide incentives for hospitals that perform well on existing measures and that those that care for a large proportion of underserved patients. CMS also said it proposes to recognize the higher costs incurred by hospitals when treating people “experiencing homelessness, (and) when hospitals report social determinants of health (SDoH) codes on claims.” In addition, CMS is requesting comment on how to further support safety-net hospitals.

According to CMS, it’s proposing to increase operating payment rates in FY 2024 by 2.8 percent, reflecting a projected hospital market basket update of 3.0 percent, reduced, however, by a projected 0.2 percent point productivity adjustment.

In its posting of the proposed rule, CMS noted that the proposed payment rate increase is applicable only to acute care hospitals that participated the Hospital Inpatient Quality Reporting program and are meaningful electronic health record users, according to language in the rule that was published Monday. CMS also expects the proposed increase in operating and capital IPPS payment rates would generally increase hospital payments by $3.3 billion.

CMS also said that it proposes to increase the LTCH PPS standard federal payment rate by 2.9 percent, noting that it expects LTCH payments under the dual-rate payment system to decrease by 0.9 percent, or $24 million, primarily due to a projected decrease in high-cost outlier payments in FY 2024 compared to FY 2023. 

“CMS continues its emphasis on health equity in this rule by recognizing homelessness as a factor in health and increasing payments to hospitals serving underserved populations,” said former CMS career professional Stanley Nachimson.

As a follow up, CMS Deputy Administrator Dr. Meena Seshamani noted that with this proposed rule, “CMS is more accurately paying hospitals and recognizing for the first time that homelessness, as a social determinant of health, also impacts resource utilization.” “Creating incentives for hospitals to provide excellent care for underserved populations lays the foundation for a health system that delivers higher-quality, more equitable, and safer care for everyone.”

Resources:

A CMS fact sheet discusses major provisions of the proposed rule, which can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/2023-07389/medicare-program-proposed-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals