On April 10, the Centers for Medicare and Medicaid Services (CMS) released the Fiscal Year (FY) 2024 Inpatient Prospective Payment System (IPPS) proposed rule. This proposed rule provides updates to Medicare payment policies and rates for inpatient stays at general acute care hospitals paid and long-term care hospitals (LTCHs) for FY 2024.

Notably, a proposed increase in overall IPPS payments of $3.3 billion, significant changes to New Technology Add-On Payment (NTAP) applicant deadlines and requirements, and several policies aimed at improving health equity.

Stakeholder comments are due by June 9, 2023. 

Proposed Changes to Payment Rates under IPPS

The proposed increase in operating payment rates for acute care hospitals paid under IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and meaningfully use EHRs is approximately 2.8%
CMS estimates a total increase in overall IPPS payments of approximately $3.3 billion, if finalized.

Alternative New Technology Add-On Payment (NTAP) Pathways for Medical Devices and Antimicrobial Products

CMS received 20 applications for new technology add-on payment under alternative pathways in FY 2024, proposing to approve the following applications:
• 4WEB Medical Ankle Truss System – Subject to the applicant adequately addressing concerns
• Aveir ™ AR Leadless Pacemaker – Subject to the applicant adequately addressing concerns
• Aveir™ Leadless Pacemaker (dual-chamber) – Subject to the applicant adequately addressing concerns
• Canary Tibial Extension (CTE) with Canary Health Implanted Reporting Processor (CHIRP) System
• Ceribell Delirium Monitor
• Ceribell Status Epilepticus Monitor
• EchoGo Heart Failure 1.0
• LimFlow System
• Nelli® Seizure Monitoring System
• Phagenyx® System
• SAINT Neuromodulation System
• Selux NGP System
• DETOUR System
• TOPS ™ System
• Total Ankle Talar Replacement – Subject to the applicant adequately addressing concerns
• Transdermal GFR Measurement System utilizing Lumitrace
• Taurolidine/heparin – Subject to the technology receiving FDA marketing authorization by July 1, 2024
• REZZAYO™ (rezafungin for injection)
SUL-DUR (sulbactam/durlobactam)
CMS proposed to disapprove the following application:
NUsurface® Meniscus Implant

New Technology Add-On Payments (NTAP) 

CMS received NTAP applications for 19 technologies under the traditional pathway:
• Cytalux, first and second indications
• DuraGraft
• Elranatamab
• Epcoritamab
• Glofitamab
• Lunsumio
• NexoBrid
• Omidubicel
• Rebyota
• Sabizabulin
• SeptiCyte RAPID
• SER-109
• Spevigo
• Tecvayli
• Terlivaz
• Vanflyta
• Vest
Xenoview
CMS is proposing to discontinue NTAP for the following technologies for FY 2024 (Table II.P.-02 in the proposed rule):
• Tecartus
• Veklury
• Zepzelca
• aScope Duodeno
• Caption Guidance
• Aprevo Intervertebral Body Fusion Device
• Cosela
• ShockWave C2 Intravascular Lithotripsy (IVL) System
• Abecma
• Harmony Transcatheter Pulmonary Valve (TPV) System
• Recarbrio (HABP/VABP)
• Fetroja (HABP/VABP)
• Darzalex Faspro
• Carvykti
Hemolung Respiratory Assist System (RAS)
CMS proposing to continue NTAP for the following technologies for FY 2024 (Table II.P.-01 in the proposed rule):
• Intercept (PRCFC)
• Rybrevant
• StrataGraft
• Aprevo Intervertebral Body Fusion Device
• Hemolung Respiratory Assist System (RAS)
• Livtencity
• Thoraflex Hybrid Device
• ViviStim
• GORE TAG Thoracic Branch Endoprosthesis
• Cerament G
iFuse Bedrock Granite Implant System
Importantly, for FY 2025, CMS is proposing to move the FDA marketing authorization deadline from July 1 to May 1 and requiring that applicants have completed their FDA market authorization request prior to submitting an NTAP application with supporting documentation sent to CMS.

New COVID-19 Treatments Add-on Payment 

In the FY 2023 IPPS Final rule, CMS finalized a proposal to end new COVID-19 add-on payments (NCTAP) for all eligible products through the end of the FY in which the PHE ends.
As the COVID-19 PHE is currently set to end in May of 2023, CMS proposes to end all NCTAP on September 30, 2023.
As such, under this proposal, no NCTAP will be made beginning in FY2024.

CAR T-Cell Therapies

For FY 2024, CMS proposes two changes in methodology for identifying clinical trials and expanded access use claims in MS-DRG 018. CMS proposes eliminating the proxy of standardized drug charges of less than $373,000 to identify clinical trial and expanded access use claims for rate-setting. Similarly, CMS proposes a change to only use claims with diagnosis code Z00.6 and do not include payer only code “ZC” or “ZB” in rate-setting.
CMS calls out that the average cost of clinical trial cases in MS-DRG 018 from FY 2022 was $89,379 compared to the non-clinical trial cases which had an average cost of $323,903 implying an adjustor of 0.28 for clinical trial and expanded use cases in MS-DRG 018.

Safety-Net Hospital Request for Information

In working to advance health equity, CMS is putting an emphasis on safety-net hospitals, which traditionally serve underinsured and uninsured populations, in addition to underserved groups that face barriers in accessing basic healthcare services.
As such, CMS is seeking public comment on challenges faced by safety-net hospitals and the patients they serve, in addition to potential approaches to assist them in meeting such challenges.

Hospital Inpatient Quality Reporting (IQR) Program

CMS is proposing the following changes to the hospital pay-for-reporting quality program. The IQR program reduces payments to hospitals that fail to meet program requirements.
• For FY 2024, CMS is proposing to adopt the following electronic clinical quality measures (eCQMs):
  • Hospital Harm — Pressure Injury eCQM,
    • Inclusion in the eCQM measure set beginning with the CY 2025 reporting period/FY 2027 payment determination.
  • Hospital Harm — Acute Kidney Injury eCQM
    • Inclusion in the eCQM measure set beginning with the CY 2025 reporting period/FY 2027 payment determination.
  • Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in Adults (Hospital Level — Inpatient) eCQM
    • Inclusion in the eCQM measure set beginning with the CY 2025 reporting period/FY 2027 payment determination.
For FY 2024, CMS is proposing to modify the following measures:
• Hybrid hospital-wide all-cause risk standardized mortality measure
  • CMS is proposing to modify this measure to include Medicare Advantage (MA) admissions beginning with the FY 2027 payment determination.
• Hybrid hospital-wide all-cause readmission measure
  • CMS is proposing to modify this measure to include MA admissions beginning with the FY 2027 payment determination.
• COVID-19 Vaccination among Healthcare Personnel (HCP) measure
  • Beginning with the Quarter 4 CY 2023 reporting period/FY 2025 payment determination, CMS proposes to revise this measure to report the cumulative number of HCPs who are up to date with the recommended COVID-19 vaccinations to align with CDC’s definition.
• For FY 2024, CMS is proposing to remove the following measures:
  • Hospital-level risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty measure
    • CMS is proposing to remove this measure in conjunction with the proposal to adopt the updated measure in the Hospital Value-Based Purchasing Program beginning with the FY 2030 payment determination.
  • Medicare spending per beneficiary (MSPB) hospital measure
    • CMS is proposing to remove this measure in conjunction with the proposal to adopt the updated measure in the Hospital Value-Based Purchasing Program beginning with the FY 2028 payment determination.
  • Elective delivery prior to 39 completed weeks’ gestation: Percentage of babies electively delivered prior to 39 completed weeks’ gestation measure
    • CMS is proposing to remove this measure beginning with the CY 2024 reporting period/FY 2026 payment determination.
• Additionally, CMS is proposing to modify the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey measure beginning with the CY 2025 reporting period/FY 2027 payment determination, including: adding new web-first modes for survey implementation, extending the data collection period to 49 days, limiting supplemental survey items to 12, requiring Spanish translation when needed, and removing two administrative methods not currently used by participating hospitals.
Finally, CMS is seeking public comment on the possible future inclusion measures around geriatric hospital and surgical structure metrics and the potential future establishment of publicly reported hospital designations that capture quality and safety of patient-centered geriatric care.

PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program

CMS proposes to make the following changes to the PCHQR Program:
• Begin public display of the “Surgical Treatment Complications for Localized Prostate Cancer” measure beginning with data from the FY 2025 program year.
• Adopt 4 new measures:
  • “Facility Commitment to Health Equity” (FY 2026 program year)
  • “Screening for Social Drivers of Health” (voluntary reporting FY 2026 program year, mandatory reporting FY 2027 program year)
  • “Screen Positive Rate for Social Drivers of Health” (voluntary reporting FY 2026 program year, mandatory reporting FY 2027 program year)
  • “Documentation of Goals of Care Discussions Among Cancer Patients (FY 2026 program year)
• Modify the “COVID-19 Vaccination among Healthcare Personnel (HCP)” measure with the Hospital Inpatient Quality Reporting (IQR) Program and Long-Term Care Hospital Quality Reporting Program (LTCH QRP).
Modify the data submission and reporting requirements for the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey measure, beginning with the FY 2027 program year.
CMS notes that it is not proposing any changes to the measure removal or retention policies for the PCHQR Program (several changes were made in the 2023 IPPS final rule).

Medicare and Medicaid Promoting Interoperability Programs

CMS proposes to make the following changes to the Promoting Interoperability Program for eligible hospitals and critical access hospitals (CAHs):
• Modify requirements for the “Safety Assurance Factors for EHR Resilience (SAFER) Guides” measure to satisfy the definition of a meaningful EHR user beginning with the CY 2024 reporting period.
• Amend the definition of “EHR reporting period for a payment adjustment year” beginning in CY 2025 to define the EHR reporting period as a minimum of any continuous 180-day period within CY 2025. This definition aligns with the definition finalized for CY 2024.
  • CMS notes that it believes maintaining the 180-day EHR reporting period for an additional year will allow eligible hospitals and CAHs to fully develop and update their CEHRT but encourages hospitals to use longer periods.
• Amend the definition of “EHR reporting period for a payment adjustment year” to remove the requirement to attest to meaningful use by October 1^st of the year prior to the payment adjustment year, beginning with the EHR reporting period in CY 2025.
  • Only applies to eligible hospitals that have not successfully demonstrated meaningful EHR use in a prior year.
• Modify the objective and measure response options related to unique patients or actions for which there is no numerator and denominator, and for which unique patients or actions are not counted, to read “N/A (measure is Yes/No)”.
Adopt 3 new electronic clinical quality measures (eCQMs) for eligible hospitals and CAHs to select as one of their 3 self-selected eCQMs beginning with the CY 2025 reporting period. CMS notes that this change is being made to continue to align the Promoting Interoperability Program with the Hospital IQR Program.
• “Hospital Harm – Pressure Injury eCQM”
• “Hospital Harm – Acute Kidney Injury eCQM”
“Excessive Radiation Dose or Inadequate Image Quality for Diagnostic CT in Adults (Hospital Level – Inpatient) eCQM”
CMS notes that they are not proposing any changes to the scoring methodology for the EHR reporting period in CY 2024.

Proposed Changes to Payment Rates under LTCH PPS

In FY 2024, CMS expects LTCH-PPS payments to increase by 2.9% and LTCH PPS payments for discharges paid the standard LTCH payment rate to decrease by 2.5% ($59 million) due to a projected 4.7% decrease in high-cost outlier payments.
CMS seeks public comment on the methodology utilized to establish the LTCH PPS outlier threshold for discharges paid the LTCH standard Federal payment rate.

Health Equity Impacts

CMS proposes to add 15 new health equity hospital categorizations for the FY 2024 IPPS payment impacts. Moving forward, one of the priorities of the CMS Framework for Health Equity 2022-2032 is to expand the collection, reporting, and analysis of standardized health equity data. As additional data becomes available, CMS plans to incorporate it on an ongoing basis into their impact analyses. 

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