CMS Issues Medicare Hospital Inpatient Prospective Payment System (IPPS) Final Rule

On August 1, 2024, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule, on which Families USA provided comments in June of this year. We applaud CMS for these additional steps taken to address health equity and to drive the health care system toward whole person care.

A few notable changes within the final rule include:

• Changes to the Hospital Inpatient Quality Reporting (IQR) program to ensure that metrics better reward patient safety and experience, improve interoperability, and reflect evolving needs in the inpatient setting.
  • We continue to recommend that CMS utilize the IQR program to better advance strategies to improve health equity, namely mandating the disaggregation of data by race, ethnicity, sexual orientation, gender identity, language, age, ability status, and location.
• Challenges addressed in how Z-codes (to describe social problems, conditions, or risk factors that influence a person’s health status) are used, including the way social driver of health (SDOH) information is coded and provider understanding of how to code for SDOH diagnoses.
  • We continue to recommend to CMS a further examination of the severity of Z-codes in future rulemaking, including but not limited to food insecurity, and of the operational considerations such as how Z-codes are documented and reported to ensure more accurate data collection and therefore a more complete picture of the social health landscape.
• A finalized Transforming Episode Accountability Model (TEAM), with future opportunity for modifications through request for comments and rulemaking. Requirements for reporting and compliance remain largely unchanged, with the responsibility for data collection, screening and reporting as voluntary and residing with participants.
  • We continue to recommend to CMS to strengthen health equity within TEAM model through measures such as requiring providers to submit sociodemographic data and aggregated social needs screening, increasing in the duration of clinical episodes to address social risk factors, incorporating person-centered care into the design with shared decision-making, and putting in place protections for financially vulnerable providers such as rural and safety net hospitals.

Families USA looks forward to the opportunity to continue working with CMS to further advance systems transformation through rulemaking and other comprehensive models of care. Read the full final rule.