Proposed Rule Would Reward Hospitals that Deliver High-Quality Care to Underserved Populations

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for inpatient and long-term care hospitals that builds on the Biden-Harris Administration’s key priorities to advance health equity and support underserved communities. As required by statute, the fiscal year (FY) 2024 inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) rule updates Medicare payments and policies for hospitals. The rule would also adopt hospital quality measures to foster safety, equity, and reduce preventable harm in the hospital setting. CMS is proposing to recognize homelessness as an indicator of increased resource utilization in the acute inpatient hospital setting, which may result in higher payment for certain hospital stays. This action aligns with the Administration’s goal of providing support to historically underserved and under-resourced communities.

“CMS is helping to build a resilient health care system that promotes good outcomes, patient safety, equity, and accessibility for everyone,” said CMS Administrator Chiquita Brooks-LaSure. “This proposed rule reflects our person-centric approach to better measure health care quality and safety in hospitals to reduce preventable harm and our commitment to ensure that people with Medicare in rural and underserved areas have improved access to high-quality health care.”

For acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting program and are meaningful electronic health record users, the proposed increase in operating payment rates for FY 2024 is projected to be 2.8%. This reflects an FY 2024 projected hospital market basket update of 3.0%, reduced by a projected 0.2 percentage point productivity adjustment. For FY 2024, CMS expects the proposed increase in operating and capital IPPS payment rates would generally increase hospital payments by $3.3 billion. For LTCHs, CMS proposes to increase the LTCH PPS standard Federal payment rate by 2.9%.  Overall, CMS expects LTCH payments under the dual-rate payment system to decrease by 0.9%, or $24 million, primarily due to a projected decrease in high-cost outlier payments in FY 2024 compared to FY 2023.

“With this proposed rule, CMS is more accurately paying hospitals and recognizing for the first time that homelessness, as a social determinant of health, also impacts resource utilization,” said CMS Deputy Administrator Dr. Meena Seshamani. “Creating incentives for hospitals to provide excellent care for underserved populations lays the foundation for a health system that delivers higher-quality, more equitable, and safer care for everyone.”

Advancing Health Equity

CMS is proposing to make health equity adjustments in the Hospital Value-Based Purchasing Program by providing incentives to hospitals to perform well on existing measures and to those who care for high proportions of underserved individuals, as defined by dual eligibility status.  This builds on previous efforts to advance health equity through the finalized health equity adjustment in the Medicare Shared Savings Program and finalized policies in Medicare Advantage and Part D Star Ratings Program. CMS also proposes to recognize the higher costs that hospitals incur when treating people experiencing homelessness, when hospitals report social determinants of health codes on claims. In addition, CMS is requesting comment on how to further support safety-net hospitals.

CMS is also proposing that rural emergency hospitals could be designated as graduate medical education training sites. As a result, more medical residents would be able to train in rural settings, which can help address workforce shortages in these communities. This proposal builds on other policies to support access to care in rural and other underserved communities.

Promoting Patient Safety

Consistent with the CMS National Quality Strategy and the HHS National Healthcare System Action Alliance to Advance Patient Safety goals to promote the highest quality outcomes and safest care for all individuals, the proposed set of quality measures aims to foster safety and equity and to reduce preventable harm in hospital settings. Among this set is a proposal to measure the rate of patients and residents in long-term care hospitals who are up to date on their COVID-19 vaccinations and new, additional measures for screenings for cancer and social drivers of health.

For a fact sheet on the proposed payment rule, visit: https://www.cms.gov/newsroom/fact-sheets/fy-2024-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-hospital-prospective.

The FY 2024 IPPS/LTCH PPS proposed rule has a 60-day comment period. The proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/2023-07389/medicare-program-proposed-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals

Starting April 17, the Pennsylvania Department of Human Services (DHS) DHS will decide who qualifies for the Children’s Health Insurance Program and process all new applications and renewals. The current 130,000 CHIP families—and all new enrollees—must go through DHS instead of their CHIP health insurance plan to determine eligibility.

The transition of eligibility processing and determinations from the CHIP plans to caseworkers in local DHS County Assistance Offices (CAO) is on the heels of the unwinding process of Medicaid continuous coverage that began on April 1st.

CAOs, which already have full workloads with the unprecedented task of Medicaid unwinding, will now be responsible for processing CHIP applications and renewals.

And while the CHIP eligibility transition had been in the works long before the COVID-19 pandemic, the state ultimately was able to determine its timing.

Check out CHIP changes webpage for more details about how this change will impact CHIP families.

  Information about the most recent Rural Communities Opioid Response Program grantee cohorts is now available on the Rural Health Information Hub at the following links:

• RCORP – Behavioral Healthcare Support Grantee Directory: 2022 Cohort
• RCORP – Implementation IV Grantee Directory: 2022 Cohort
• RCORP – Medication Assisted Treatment Access Grantee Directory: 2022 Cohort
• RCORP – Psychostimulant Support II Grantee Directory: 2022 Cohort

 The Centers for Medicare & Medicaid Services recently published payment policy updates to Medicare Advantage (also known as Medicare Part C) and Medicare Prescription Drug Program (also known as Medicare Part D) for the calendar year 2024. The updates include a payment increase of 3.32% compared to 2023, Star Rating updates, and finalized growth rates for Medicare Advantage, as well as alignment of Medicare Advantage, plans with the Internal Classification of Diseases (ICD)-10 system which has been in place since 2015 for many other payors in the U.S. The updates also include policies addressing Puerto Rico payment rates, prior authorization practices, access to behavioral health services, and marketing of Medicare Advantage plans. Part D updates for 2024 include the elimination of cost-sharing in catastrophic phase coverage, expanding the low-income subsidy program, eliminating deductibles for certain adult vaccines and insulin products, and limiting a month’s supply of covered insulin products to $35 per month. Medicare Advantage has continued to grow faster in rural areas, with enrollment growing 13.4 percent between 2021 and 2022 in rural and 7.9 percent in urban counties.

In response to a change in the way the Census Bureau defines rural and urban areas, the Centers for Medicare & Medicaid Services (CMS) released an interim process for determining locations of new Rural Health Clinics. For now, CMS will use the 2010 and 2020 Census urban criteria when determining rural location, and locations meeting either standard will be eligible.  The 2010 criteria defined two types of urban areas: 1) urbanized areas with a population of 50,000 or more; and 2) urban clusters with at least 2,500 but fewer than 50,000 people. So under the 2010 criteria, a rural location is one that is not in an urbanized area but might be in an urban cluster. Under the 2020 criteria, the Census Bureau no longer subdivides urban areas by population size so all developed areas are simply called urban areas – and housing density, not population, is the primary determining factor. The population is still considered at the lower end: the minimum population for an urban area designation increased from 2,500 people to 5,000 people or at least 2,000 housing units. The Federal Office of Rural Health Policy is housed in a different agency (HRSA) under the U.S. Department of Health & Human Services and uses different measures to define rural for its grant programs.  Learn more details about eligibility for FORHP grants on the HRSA website.