Press Releases

New CMS Rule Promotes High-Quality Care and Rewards Hospitals that Deliver High-Quality Care to Underserved Populations

Today, the Centers for Medicare & Medicaid Services (CMS) issued a final payment rule for inpatient and long-term care hospitals that builds on the Biden-Harris Administration’s priorities to provide support to historically underserved and under-resourced communities and to promote the highest quality outcomes and safest care for all individuals. The fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule updates Medicare payments and policies for hospitals as required by statute; adopts hospital quality measures to foster safety, equity, and reduce preventable harm in the hospital setting; and recognizes homelessness as an indicator of increased resource utilization in the acute inpatient hospital setting. This is consistent with the Administration’s goal of advancing health equity for all, including members of historically underserved and under-resourced communities, as described in the President’s January 20, 2021, Executive Order 13985 on “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.”

For acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record users, the final rule will result in an increase in operating payment rates of 3.1%. This reflects an FY 2024 projected hospital market basket update of 3.3%, reduced by a statutorily required productivity adjustment of a 0.2 percentage point. Under the LTCH PPS, CMS expects payments in FY 2024 to increase by approximately 0.2% or $6 million.

“As part of CMS’ health equity goals, we are rewarding hospitals that deliver high-quality care to underserved populations and, for the first time, also recognizing the higher costs that hospitals incur when treating people experiencing homelessness,” said CMS Administrator Chiquita Brooks-LaSure. “With these changes, CMS is laying the foundation for a health system that delivers higher quality, more equitable, and safer care for everyone.”

Supporting Rural and Other Underserved Communities

In this final rule, CMS is finalizing a health equity adjustment in the scoring methodology for the Hospital Value-Based Purchasing (VBP) Program that rewards hospitals that serve higher proportions of dual-eligible patients for providing excellent care. The newly finalized scoring methodology allows the opportunity for hospitals to earn up to ten bonus points depending on their performance on existing quality measures and the proportion of dually eligible patients they treat. The rule is a first step toward promoting health equity in the Hospital VBP Program and as such, CMS received public comments on additional approaches for equity adjustments in the Hospital VBP Program for future years. These suggestions include using other methods of restructuring the scoring methodology and determining the best metric to identify underserved populations, which CMS will consider for future updates.

CMS is also finalizing a policy to recognize the higher costs that hospitals incur when treating people experiencing homelessness when hospitals report social determinants of health codes on claims, meaning that hospitals will generally receive higher payments when a patient is experiencing homelessness. In addition, CMS is finalizing the policy that allows rural emergency hospitals (REHs) to be designated as graduate medical education training sites. This policy will build upon the Biden-Harris Administration’s commitment to supporting care in rural and other underserved communities by enhancing the health care workforce opportunities in these areas.

Additionally, this final rule will codify the requirements for the additional information that eligible facilities are required to submit when applying for enrollment as an REH, as specified in law. The finalized policy is intended to increase access to essential health care services in rural communities and support the enrollment process for eligible facilities seeking the REH designation.

Promoting Patient Safety

CMS is finalizing proposals for the Hospital IQR and Medicare Promoting Interoperability Programs to adopt three electronic clinical quality measures beginning with the CY 2025 reporting period to foster safety and reduce preventable harm in the hospital setting.

For a fact sheet on the final payment rule, visit:

The FY 2024 IPPS/LTCH PPS final rule can be downloaded from the Federal Register at:

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