CMS Finalizes 2024 IPPS and LTCH PPS Rule

The Centers for Medicare and Medicaid Services (CMS) finalized the 2024 Inpatient Prospective Payment System (IPPS), which included a 3.1% pay bump. Continuing the trend set early on in the PPS season, hospitals and other inpatient facility groups responded negatively to the raise, claiming that it’s not enough due to inflation, labor shortages and COVID-19.

The raise will only go to hospitals that comply with quality reporting rules and electronic health record guidelines and does not include possible cuts related to high readmission rates under the Hospital Readmissions Reductions Program (HRRP) or the Hospital Acquired Condition (HAC) Reduction Program. Inside Health Policy notes that Medicare disproportionate share hospital payments and Medicare uncompensated care payments will drop next year by $957  million.

Modern Healthcare reports that CMS also finalized a health equity adjustment that provides bonus points to hospitals that provide for a higher volume of Medicare and Medicaid dual enrollees. It will also raise payments to hospitals who treat the homeless. Three electronic clinical quality measures will also be introduced to help hospitals assess pressure injuries for darker skinned patients.

Unsurprisingly, hospital advocacy groups responded negatively to the final rule. From Ashley Thompson, the American Hospital Association’s senior vice president for public policy:

The AHA is deeply concerned with CMS’ woefully inadequate inpatient and long-term care hospital payment updates. The agency continues to finalize rate increases that are not commensurate with the near decades-high inflation and increased costs for labor, equipment, drugs and supplies that hospitals across the country are experiencing.

The fact sheer for the FY 2024 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) Final Rule can be found at CMS.