News: FY 2025 IPPS final rule released, SDOH codes granted CC status
On August 1, 2024, CMS issued the fiscal year (FY) 2025 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) final rule, the U.S. Department of Health and Human Services announced. This rule will determine payments for discharges beginning on October 1, 2024. The rule updates Medicare payments and policies for inpatient hospitals and long-term care hospitals, addressing social determinants of health (SDOH) and emergency preparedness with rate increases, according to the CMS fact sheet released alongside the rule.
For hospitals paid under the IPPS, CMS will increase the standard federal payment rate by 2.9%. CMS has finalized the proposal to change the severity rating of seven SDOH codes describing inadequate housing and housing instability from non-CCs to CCs. According to the CMS fact sheet, this change is due to the higher average resource costs associated with caring for patients experiencing these situations. Specifically, the following codes have been granted CC status for FY 2025:
- Z59.10, Inadequate housing, unspecified
- Z59.11, Inadequate housing environmental temperature
- Z59.12, Inadequate housing utilities
- Z59.19, Other inadequate housing
- Z59.811, Housing instability, housed, with risk of homelessness
- Z59.812, Housing instability, housed, homelessness in past 12 months
- Z59.819, Housing instability, housed unspecified
Including the seven codes associated with housing instability and inadequate housing, the IPPS final rule finalized severity changes for 104 codes, granting them CC status for FY 2025. On the flip side, the final rule also removed CC status from 18 codes. Only four codes were upgraded to MCC status in the final rule:
- I26.03, Cement embolism of pulmonary artery with acute cor pulmonale
- I26.04, Fat embolism of pulmonary artery with acute cor pulmonale
- I26.95, Cement embolism of pulmonary artery without acute cor pulmonale
- I26.96, Fat embolism of pulmonary artery without acute cor pulmonale
The final rule also added seven new, deleted five, and modified two quality measures under the Hospital Inpatient Quality Reporting Program, such as digital measures for patient harm events, focusing on hospital patient safety practices and outcomes. CMS also removed one PSI (PSI 04) but replaced it with a new 30-day measure instead.
CMS also finalized a “Condition of Participation” which requires hospitals and critical access hospitals to report certain data to the Centers for Disease Control and Prevention on certain acute respiratory illnesses starting November 1.
All the supplemental documentation and tables related to these IPPS changes can be found here.
For LTCHs, CMS will increase the standard federal payment rate by 3.0%. New SDOH data elements have been added into LTCH quality reporting, which requires LTCHs to report elements on factors that influence the required resources for a patient’s care including housing, food and utility stability, and access to transportation.
All the supplemental documentation and tables related to these LTCH changes can be found here.
“Hospitals are a critical part of the diverse communities they serve,” Meena Seshamani, MD, PhD, CMS Deputy Administrator and Director of the Center for Medicare, told HHS. “CMS recognizes the cost of unmet social needs hospitals face, as well as the need to advance access to innovative and essential treatments and expand the behavioral health workforce. Our payments to hospitals further recognize this and ultimately help provide hospitals the vital tools they need to better serve all communities.”
Editor’s note: To read the full IPPS and LTCH final rules for FY 2025, see the full PDF posted in the Federal Register. To read HHS’ coverage of this story, click here. To read the CMS fact sheet, click here.