On August 1, the Centers for Medicare and Medicaid Services (CMS) released the Fiscal Year (FY) 2024 Inpatient Prospective Payment System (IPPS) final rule (link) and accompanying fact sheet (link). This final 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, CMS finalized significant changes to New Technology Add-On Payment (NTAP) application deadlines and requirements, and an increase to overall IPPS payment of $2.2 billion.  

Changes to Payment Rates under IPPS.

The FY 2024 operating payment rates for acute care hospitals paid under IPPS increased to 3.1%, given successful participation in the Hospital Inpatient Quality Reporting (IQR) Program and meaningful use of EHRs.
CMS estimates this will increase total IPPS payments by approximately $2.2 billion.

New Technology Add-On Payments (NTAP)

For FY 2025, CMS finalized their proposal to move the FDA marketing authorization deadline from July 1 to May 1 and require that applicants have a completed FDA market authorization request prior to submitting an NTAP application with supporting documentation sent to CMS.
CMS approved 10 NTAP applications for technologies under the traditional pathway:
Cytalux, first and second indications
Epcoritamab
Glofitamab
Lunsumio
Rebyota
SER-109
Spevigo
Tecvayli
Terlivaz
CMS is finalizing their proposal to discontinue NTAP for the following technologies for FY 2024 (Table II.F.-02 in the final 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 finalized their proposal to continue NTAP for the following technologies for FY 2024 (Table II.F.-01 in the final 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

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

CMS received 20 applications for new technology add-on payments under alternative pathways for medical devices and antimicrobial products for FY 2024
Seven applicants withdrew applications:
Selux NGP System
Total Ankle Talar Replacement
Transdermal GFR Measurement System utilizing Lumitrace
Ceribell Delirium Monitor
NUsurface
4WEB Ankle Truss System
Nelli® Seizure Monitoring System
One applicant did not meet the July 1 deadline for FDA approval or clearance of the technology and therefore was ineligible for consideration:
LimFlow
Of the remaining 12 applications, CMS approved 11:
Aveir™ AR Leadless Pacemaker
Aveir™ Leadless Pacemaker (Dual-Chamber)
Canary Tibial Extension (CTE) with Canary Health Implanted Reporting Processor (CHIRP) System
Ceribell Status Epilepticus Monitor
DETOUR System
EchoGo Heart Failure 1.0
Phagenyx® System
SAINT Neuromodulation System
TOPS™ System
RAZZAYO™ (rezafungin for infection)
XACDURO® (sulbactam/durlobactam)
CMS conditionally approved one application:
Taurolidine/heparin – subject to the technology receiving FDA marketing authorization by July 1, 2024

 
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 ended May 11, 2023, CMS will end all NCTAP on September 30, 2023 and no NCTAP will be made beginning in FY 2024 (for discharges on or after October 1, 2023).

 
CAR T-Cell Therapies

For FY 2024, CMS finalized two changes in methodology for identifying clinical trials and expanded access use claims in MS-DRG 018. CMS finalized 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 is finalizing a change to only use claims with diagnosis code Z00.6 and to 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 $84,883 compared to the non-clinical trial cases which had an average cost of $314,862 implying an adjustor of 0.27 for clinical trial and expanded use cases in MS-DRG 018 (both figures are updated from the proposed rule).

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 sought 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. CMS stated they will be reviewing the comments received and will use the comments to inform and guide future rulemaking.

Hospital Inpatient Quality Reporting (IQR) Program

CMS finalized the following changes to the hospital pay-for-reporting quality program. Hospitals that do not meet IQR program are subject to a one-fourth reduction of the percentage increase in their annual payment rate update under IPPS.
For FY 2024, CMS finalized the adoption of 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 finalized the modification of the following measures:
Hybrid hospital-wide all-cause risk standardized mortality measure
This measure would include Medicare Advantage (MA) admissions beginning with the FY 2027 payment determination.
Hybrid hospital-wide all-cause readmission measure
This measure would include Medicare Advantage (MA) admissions beginning with the FY 2027 payment determination.
COVID-19 Vaccination among Healthcare Personnel (HCP) measure
Beginning with the FY 2025 payment determination, this measure would include reporting on the cumulative number of HCPs who are “up to date” with the recommended COVID-19 vaccinations to align with CDC’s definition.
CMS finalized the removal of the following measures:
For removal beginning with the FY 2030 payment determination:
Hospital-level risk-standardized complication rate following elective primary total hip arthroplasty and/or total knee arthroplasty measure
Medicare spending per beneficiary (MSPB) hospital measure
For removal beginning with the FY 2026 payment determination:
Elective delivery prior to 39 completed weeks’ gestation: Percentage of babies electively delivered prior to 39 completed weeks’ gestation measure
Additionally, CMS finalized modifications to the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey measure beginning with the CY 2025 reporting period/FY 2027 payment determination. These modifications include:
Adding new web-first modes for survey implementation,
Extending the data collection period from 42 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 received feedback on potential future inclusion, but did not finalize implementation of two measures around geriatric hospital and surgical structural metrics or publicly reported hospital designations that capture quality and safety of patient-centered geriatric care.

 
PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program

CMS finalized the following changes to the PCHQR Program:
Begin public display of the “Surgical Treatment Complications for Localized Prostate Cancer” measure starting 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 to align 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.
 

Medicare and Medicaid Promoting Interoperability Programs

CMS finalized 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 require an attestation to completing an annual self-assessment of all nine SAFER Guides.
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 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 there are no changes to the scoring methodology for the EHR reporting period in CY 2024.
 

Changes to Payment Rates under LTCH PPS

For FY 2024, CMS anticipates the LTCH PPS standard payment rate will increase by 3.3% through market basket adjustments.
CMS is also instituting a statutory reduction to the annual update for LTCHs Quality Reporting Program data submission noncompliance of 2.0%.
The proposed rule’s estimate of the standard LTCH payment rate to decrease by 2.5% due to a projected 4.7% decrease in high-cost outlier payments has been revised. CMS now projects a 0.2% decrease in payments to LTCH PPS.

 
Health Equity Impacts CMS finalized the proposal to add 15 new health equity hospital categorizations for the FY 2024 IPPS payment impacts in order to more explicitly measure the impact of their policies on health equity. Moving forward, CMS seeks to expand the collection, reporting, and analysis of standardized health equity data and plans to incorporate that data on an ongoing basis into their impact analyses.

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