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FY 2025 Medicare hospital inpatient final rule will alter hospital margins and change administrative procedures

This week, our In Focus section reviews the policy changes that the Centers for Medicare & Medicaid Services (CMS) finalized on August 1, 2024, in the fiscal year (FY) 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Final Rule (CMS-1808-F). This year’s IPPS final rule will impact hospital margins and administrative processes beginning October 1, 2024.

The remainder of our article delves into five of the key policy changes included in the final rule.

Key provisions in the FY 2025 Hospital IPPS and LTCH Final Rule

For FY 2025, CMS will modify several hospital inpatient payment policies. We highlight five of these policies because they will have the most significant impact on Medicare beneficiaries, hospitals and health systems, payors, and manufacturers:

The annual inpatient market basket update and changes to the standardized payment amount
New technology add-on payment (NTAP) policy changes
Implementation of the Transforming Episode Accountability Model (TEAM) bundled payment model in 2026
Hospital wage index changes and labor market adjustments
Severity of illness increase for housing insecurity social determinants of health (SDOH) codes

Several of these and other policy changes for FY 2025 will become effective October 1, 2024.

Market basket update

Final rule: Overall CMS’s Medicare 2025 Hospital IPPS Rule will increase hospital inpatient payments to acute care hospitals by 2.9 percent from 2024 to 2025, an estimated increase of approximately $2.9 billion after other policy changes are included.

Health Management Associates (HMA) analysis: CMS’s 2.9 percent increase is largely based on an estimate of the rate of increase in the cost of a standard basket of hospital goods—the hospital market basket. For beneficiaries, this payment rate increase will lead to a higher standard Medicare inpatient deductible and increase out-of-pocket costs. The finalized payment increase (2.9 percent) is larger than the increase included in CMS’s IPPS Proposed Rule (2.6 percent) but continues to fall below economy-wide inflation over the past year (3.5 percent).1,2 Importantly, after accounting for the various policy changes made within the final rule (e.g., wage index reclassifications) we anticipate individual cases will experience an average payment increase of 1.7 percent.

Transforming Episode Accountability Model

Final rule: CMS finalized the creation of a new mandatory episode-based CMS Innovation Center methodology—TEAM. Under TEAM, selected acute care hospitals will coordinate care for people with traditional Medicare who undergo one of the following surgical procedures:

Lower extremity joint replacement
Surgical hip femur fracture treatment
Spinal fusion
Coronary artery bypass graft
Major bowel procedure

Hospitals in the model will assume responsibility for the cost and quality of surgical care through the first 30 days after a Medicare beneficiary leaves the hospital. Hospitals also must refer patients to primary care services to support optimal long-term health outcomes. Hospitals will be assigned to different risk tracks to allow a graduated path to ease in to full-risk participation.

HMA analysis: The mandatory nature of this model requires hospitals in the selected geographic areas to begin to prepare for implementation of the model requirements in 2026. TEAM builds on and combines previous models such as the bundled payment for care improvement (BPCI) and the comprehensive care for joint replacement (CJR) models. Hospitals in roughly 23 percent (188 of 925) of the nation’s core-based statistical areas (CBSAs) are required to participate in this advanced payment model, with some exceptions, such as hospitals in Maryland and Sole Community Hospitals. Participating hospitals will be required to report various quality measures, and payment will be based on spending targets and include retroactive reconciliation. Reimbursement under the model will follow four different tracks, which vary by the level of upside and downside risk that the hospital accepts and with a specific track for safety net hospitals.

Hospital Wage Index Adjustments and Labor Market Changes

Final rule: CMS finalized two wage index policies for FY 2025. First, CMS extended the temporary policy finalized in the FY 2020 IPPS/LTCH PPS final rule for three additional years to address wage index disparities affecting low wage index hospitals, which includes many rural hospitals. Second, as required by law, CMS revised the labor market areas used for the wage index based on the most recent CBSA delineations issued by the OMB based on 2020 Census data.

HMA analysis: The two wage index policy changes for FY 2025 will have important positive and potentially negative consequences on hospital payment. The policy to extend the low wage index policy for three more years will allow many hospitals with low wage indexes to increase their wage index and their payment rates across all Medicare severity diagnosis-related groups (MS-DRGs).

Specifically, the roughly 800 hospitals with wage indexes below 0.9007 (the 25th percentile across all hospitals) will automatically receive an increase in their wage index and payment rates for all inpatient cases. This policy will bring additional millions of dollars to individual rural hospitals in FY 2025. The second policy is a statutorily required update to the labor markets used to establish CMS’s hospital wage indexes. To implement this policy, CMS will use US Census Bureau data to redefine urban and rural markets. As a result, CMS will redefine 53 urban counties as rural and will newly redefine 42 rural counties containing a hospital as urban. These changes will disrupt various hospital payment policies for hospitals in these counties. The overall impact of both geographic policy changes for FY 2025 will be to increase inpatient payment rates to rural hospitals.

Revision to Social Determinants of Health Housing Insecurity Diagnosis Coding

Final rule: CMS finalized a change in the severity designation of the seven ICD-10-CM diagnosis codes that describe inadequate housing and housing instability. Under the final rule, these codes are changing from non-complication or comorbidity (non-CC) to complication or comorbidity (CC) based on the higher average resource costs of cases compared with similar cases without these codes.

HMA analysis: This new policy will enable hospitals to receive higher inpatient payment rates when they provide care for patients with inadequate housing or housing instability are served. Specifically, this policy change will result in assigning cases involving patients with one of these codes to a higher-level MS-DRG. Hospital staff will want to ask patients about their housing upon admission and discharge to accurately document this critical SDOH characteristic.

New technology add-on payments

Final rule: CMS finalized three changes to the NTAP program and approved several products for NTAPs in FY 2025.

HMA analysis: CMS seems willing to increase NTAP payments in certain limited situations to boost selected policy goals but rejects comments seeking to increase the percentage for sickle cell products or expand the higher payments to other medical conditions. In addition, portions of the final rule indicate that CMS is applying some of the criteria for NTAPs more strictly than in recent years. If this trend continues, it may be more difficult for future new technologies to be approved for NTAPs.

Connect with Us

HMA’s Medicare Practice Group works to monitor legislative and regulatory developments in the inpatient hospital space and assess the impact of inpatient payment, quality, and policy changes on the hospital sector. We will continue to follow these and other changes happening to hospitals and are available to provide additional detail on these or other policies in the final rule. If you have any questions, please contact Zach Gaumer ([email protected]), Amy Bassano ([email protected]), Kevin Kirby ([email protected]), or Clare Mamerow ([email protected]).

August 7, 2024

FY 2025 Medicare Hospital Inpatient Final Rule Will Alter Hospital Margins and Change Administrative Procedures

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Enabling county governments to plan for use of opioid settlement funds

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Cabarrus County engaged HMA to support the development of a strategic plan that will guide the use of the County’s opioid settlement funds. In partnership with applicable cities and municipalities, the collaborative planning process provided opportunities to engage the community—both professionals working in and around the opioid space as well as those with lived experience—to hear the needs of residents, understand current services offered and existing strengths, and explore barriers to accessing care.

Download and read the approach and results.

Don’t just grab the shiny new thing: integrating IT and business strategies to optimize technology ROI

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The emergence of generative artificial intelligence (Gen AI) and large language models, like OpenAI’s ChatGPT or Google Gemini, has spurred a renewed focus on the use of cutting-edge technology in healthcare. Healthcare payers, providers, and state Medicaid agencies are racing to deploy Gen AI and other technologies to improve patient outcomes, reduce costs, improve patient engagement, streamline administrative operations, and simplify compliance. While Gen AI holds tremendous potential to improve healthcare, we should heed the lessons learned by recent waves of technology: deploying technology—including Gen AI—in isolation of a broader business strategy is a recipe for underperformance. Optimizing the return on technology investment requires taking a structured approach to integrate technology strategy with business strategy.

Investing in health IT is essential to meet innovation challenges. Technology can enable the scale, reach, speed, and the consistency needed to thrive in today’s fast-changing landscape. Moreover, as workforce shortages persist, technology must become a “force multiplier,” allowing healthcare practitioners and other healthcare staff to focus on what they do best. In today’s changing business and social environment, there is no choice but to embrace health IT.

Investments in health technology, however, have often fallen short of expectations. For years, CEOs and chief information officers (CIOs) have lamented the poor return on substantial investments in health IT. For example, in a recent EY study, 70% of hospital executives report they have not seen an ROI from investments in digital health. A few years ago, only 10% of health professionals surveyed by Health Catalyst assessed the ROI on Electronic Health Records (EHR) investments as positive or better. Mis-investing in technology has long-term implications for any organization. Over-investment in technology reduces ROI and diverts resources from more productive uses. Under-investment in technology can undermine effectiveness, reduce productivity, and weaken patient engagement. So, optimizing technology ROI is essential to driving effective outcomes.

One challenge with IT investment is that measuring ROI in healthcare is an inherently difficult calculation. In addition to financial returns, the hoped-for return on technology investments is an improvement in patient outcomes, which may not translate into immediate financial benefits. Another challenge is that fragmented healthcare systems make it difficult for any single organization to gain system-wide efficiencies that drive a positive ROI.

However, an often-overlooked challenge to optimizing IT investment is thinking of IT strategy as something separate from, rather than integrated with, the business strategy. In healthcare, executing nearly every business strategy requires leveraging IT. To optimize the ROI in health tech investments, organizations must align and integrate their health IT strategy with their business strategy.

Organizations often take one of two different approaches to technology. In some cases, they cede responsibility for the IT strategy to the CIO, perhaps because technology can seem imposing, and the CIO speaks the language of IT. In these cases, the IT strategy may reflect imperatives important to the IT shop—for example, consolidating on a common tech stack or replacing a software component—that do not support or advance the business strategy.

In other cases, organizations develop a business strategy in isolation of a technology strategy—they define their business strategy, then look for technology to support it. This approach leads to a business strategy that either cannot be realistically supported by available technology or does not exploit technology effectively. Under either approach the result is the same: Failing to integrate and align your tech strategy with your business strategy will undermine the value of your technology investments.

To optimize the return on their technology investments, healthcare organizations should take a structured approach to aligning their technology strategy with their business strategy. HMA works with health care organizations to:

develop or refine their business strategy,
develop an integrated technology strategy fully aligned with that business strategy,
assess their existing technology,
develop a strategic roadmap to modernize technology,
support technology procurements, and
support technology implementations.

HMA will be at MESC 2024 August 12-15, and if interested in learning more about this approach, come see us at Booth 450. Or for more hands-on exploring of how this can work for an organization, join us at these two pre-conference sessions at HMA’s Fall Conference on Unlocking Solutions in Medicaid, Medicare, and Marketplace, October 7-9 in Chicago. The session on Navigating the Medicaid 1115 Demonstration Processes will give nuanced understanding of CMS’ criteria concerning budgeting, implementation, evaluation frameworks and administrative supports, along with strategies to effectively navigate through the approval process. Another session on A Framework for Thinking About – and Using – AI Effectively will share real-world examples of successful AI implementation, their impact on business outcomes, and lessons learned. Both will examine how HMA works with clients to integrate their technology strategy into the overall company strategy.

For more information, contact our IT experts.

Webinar replay: Integrating behavioral health into whole-person care

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This webinar was held on August 21, 2024.

Whether you insource or outsource your behavioral health benefits, the integration of behavioral health and medical care continues to emerge as a critical strategy to improve health and reduce healthcare costs. This webinar is designed to help organizations begin to navigate this important shift in expectations and ultimately be a part of successful change in this area. By focusing on the value of a whole-person care approach to behavioral health, HMA experts described the different models for integrating behavioral health and provided a training framework to support the behavioral health aspects of whole-person care.

Learning Objectives:

Articulate the benefits of incorporating a strong Behavioral Health approach into Whole-Person Care Models
Learn the different models for integrating Behavioral Health care into Health Plan Functional Areas and Operations
Able to develop a training framework for all Health Plan staff to increase their competencies for addressing Behavioral Health conditions

Moderator: Michael Engelhard, MBA, Health Management Associates

Webinar replay: The new administrative state: implications of recent landmark Supreme Court rulings for federal regulations, agency deference, and state implementation

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This webinar was held on August 14, 2024.

While legal experts assess the recent U.S. Supreme Court rulings, federal and state agency leaders face significant questions about how their agencies and their responsibilities will be impacted. This webinar featured insightful discussions with former federal and state agency leaders exploring the known and yet-to-be determined impacts of recent rulings on federal regulations, rulemaking and actions, and agency deference, and also explored the impact on state agencies implementing federal rules. The webinar addressed the impact of the pivotal Loper Bright Enterprises v. Raimondo and West Virginia v. EPA decisions. Together these decisions overturned the longstanding Chevron deference doctrine, are pushing Congress to craft more specific legislation, and are directing courts to interpret ambiguous statutes. The discussion also explored the most appropriate responses of agency leaders, anticipated the ways that these decisions impact federal and state agency decision-making, and identified areas of growing uncertainty.

Learning Objectives:

Understand what we know about the impact of these decisions on agency rulemaking and decision making, consider the impact on federal agency discretion, and understand the shift in power towards Congress and judicial interpretation
Analyze the likely impact on agency rulemaking processes
Explore state governance issues, both as a partner to federal agencies and as an implementer of federal policy and funds
Identify the most important questions yet to be answered

Speakers:

Governor Mike Leavitt, Advisor, Health Management Associates and founder of Leavitt Partners, an HMA Company, former HHS Secretary and EPA Administrator
Chuck Milligan, JD, MPH, CEO, Health Management Associates, former State Medicaid Director
Amy Comstock Rick, JD, Principal, Leavitt Partners, an HMA Company

HMA celebrates 59th anniversary of Medicaid and Medicare

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This week, Health Management Associates (HMA) shifts In Focus from a newsworthy development to commemorate a seminal event in the expansion and strengthening of healthcare access in the United States. On July 30, 1965, Medicaid and Medicare were signed into law under Title XVIII and Title XIX of the Social Security Act. Today we celebrate the 59^th anniversary of this pivotal moment in America’s healthcare journey.

Medicaid: A Critical Safety Net that Remains Strong

All states, the District of Columbia, and the U.S. territories have Medicaid programs designed to provide health insurance coverage for low-income individuals. As of March 2024¹, 82,751,338 people, including eligible low-income adults, children, pregnant women, older adults, and people with disabilities are covered under their state’s Medicaid program in accordance with federal requirements. The COVID-19 pandemic underscored just how important this safety net program is for American families, as it continued to deliver vital services during unprecedented times.

Beyond its traditional role, Medicaid also drives significant innovations in care for people with complex conditions and challenges. States have implemented various programs and initiatives to improve healthcare quality and outcomes. These include:

Managed Care Expansion: Many states have expanded Medicaid managed care programs to enhance care coordination and improve health outcomes.
Value-Based Care Models: Innovations in value-based care are being tested, aiming to link reimbursement to quality of care and patient outcomes rather than volume of services.
Integration of Behavioral Health: Several states are integrating behavioral health services into Medicaid to address mental health and substance use disorders more effectively.
Telehealth: The pandemic accelerated the adoption of telehealth services in Medicaid, expanding access to care and reducing barriers for patients.

Medicare: Leading in Innovation and Coverage

Medicare provides coverage to more than 60 million seniors and people with disabilities. In addition to being a lifeline for so many Americans, Medicare is a force for innovation in health policy, piloting changes to payment and care delivery through the Innovation Center and through Medicare Advantage plan design. Key innovations include:

Alternative Payment Models: The Innovation Center has been at the center of piloting various alternative payment models to improve quality and reduce costs.
Medicare Advantage Enhancements: Medicare Advantage plans continue to evolve, offering more comprehensive benefits that include mental health and substance use disorder services and integrating additional services such as dental, vision, and wellness programs.
Chronic Care Management: Medicare is expanding its focus on chronic care management, providing additional resources and support for individuals with chronic conditions.

HMA’s Commitment to Medicaid and Medicare

Since HMA’s founding, our experts have helped states, plans, providers, and other stakeholders deliver the full spectrum of Medicaid and Children’s Health Insurance Program (CHIP) services. As HMA has evolved, we have built a leading-edge Medicare team that includes former agency officials, plan leaders, policy and data analysts, and actuaries. Healthcare plans, providers, and innovators call upon our colleagues to anticipate policy and regulatory change, develop and support Medicare Advantage business, transform fee-for-service programs, and support access to new technologies and treatments that can both improve quality patient outcomes and reduce costs of care.

Our growing team of includes 10 former state Medicaid directors and many more former state agency leaders, hospital and health plan executives, senior officials from the Centers for Medicare & Medicaid Services (CMS), and public health leaders.

HMA Colleagues Who Are Former Medicaid Directors Looking Ahead

HMA’s Top Medicare Experts

Looking Ahead

As Medicaid and Medicare near their seventh decade, the programs will continue to evolve and change to better support covered individuals and meet the demands of policymakers and taxpayers. HMA experts are committed in service of this important mission, and we are excited about building their future together with our clients to create more innovative, high-quality care that improves health outcomes for all.

April 2024 Medicaid & CHIP Enrollment Data Highlights | Medicaid ↩︎

July 31, 2024

HMA Celebrates 59th Anniversary of Medicaid and Medicare

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Raising the Bar: Improving Health Equity through Actionable Frameworks

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This week, our In Focus section highlights an initiative, Raising the Bar: Healthcare’s Transforming Role (RTB), which is designed to strategically address inequities in the healthcare system. Leading this effort is the National Alliance to Impact the Social Determinants of Health (NASDOH), an alliance convened by Leavitt Partners, a Health Management Associates (HMA) Company, with support from the Robert Wood Johnson Foundation (RWJF).

Overview

There is significant and increasing demand across health and human services to address health inequities and eliminate disparities in service delivery and positive health outcomes. Organizations are asked to provide healthcare in holistic ways that recognize both individual and population-level needs.

Raising the Bar is a framework and a call to action for the healthcare sector to embrace all levers, resources, and opportunities available to advance equity and excellence. Raising the Bar seeks to accelerate the healthcare sector’s efforts to achieve equity and to improve the healthcare experience and well-being of individuals, families, and communities.

The Framework for Driving Action

The RTB project worked with healthcare leaders and people who have experienced inequities in the system to develop an actionable framework for the entire healthcare sector, which would embed equity and excellence throughout its work. The NASDOH convened extensive discussions with providers, hospitals, payers, and community leaders to develop foundational principles, essential roles, and concrete actions for the sector to achieve equity goals, big and small.

Raising the Bar Principles. The project generated five principles that put the priorities of individuals, families, and communities at the center of healthcare. They were informed by discussion with organizations and people who give, get, and pay for care.

Raising the Bar also identified four essential roles for individual contributors to the healthcare system and provide concrete actions they can take to transform how care is delivered.

Embedding Approaches to Address Health Inequities

Now in the next phase of this work, HMA consultants are working one-on-one with five organizations committed to embedding approaches to address health inequities by implementing the framework within their own systems of care. Participating organizations include a multi-site, multi-state Catholic health system, an academic medical center, an independent health system, one certified community behavioral health clinic, and one county public health department. The entities vary by geography, demographics, population size, and rural and urban location.

Each of the following sites is using the Raising the Bar framework and individualized coaching to meet their equity goals:

Charles County Department of Health, White Plains, MD
Charles County is working to develop and strengthen trusting partnerships with local community organizations representing diverse populations to address health inequities in the county.
CHRISTUS Health, Texas, Arkansas, and Louisiana
CHRISTUS is developing an enterprise-wide six-year health equity road map that includes a strategy to build a community health worker sustainability.
Gaudenzia, Baltimore, MD
Gaudenzia is working to develop and implement a road map for establishing a Consumer Advisory Committee (a Substance Abuse and Mental Health Services Administration requirement for certified community behavioral health centers) that other Gaudenzia sites can use and spread nationwide.
Jefferson Health, Philadelphia, PA
Jefferson is conducting an enterprise-wide assessment and creating a governance structure for its health equity initiatives across multiple healthcare and medical education sites throughout their catchment area, which crosses state lines.
Sturdy Health, Attleboro, MA
Sturdy is creating an enterprise-wide health equity dashboard with measures that align with organizational goals and strategies and developing staff training to improve service delivery for populations who experience inequities in care.

The five entities are receiving individualized coaching from HMA health equity experts over a one-year period using the Raising the Bar framework and each organization’s self-identified goals and objectives. At the project’s completion, findings from the project will be published in the Raising the Bar implementation guidance, developed in partnership with the Health Care Transformation Taskforce.

Continue the Conversation

Raising the Bar will be featured in discussions during the HMA Fall conference in Chicago, October 7-9. In the opening plenary session on social determinants of health, Leticia Reyes-Nash and Sara Singleton will describe some of the work, and during a breakout session, speakers from some the organizations participating in this project will share their experiences.

CLICK HERE TO REGISTER

For more information about Raising the Bar or the types of technical assistance that HMA can provide to organizations seeking to further develop equity in their practices and communities, contact project director Sara Singleton, Principal, Leavitt Partners, or any of the HMA coaching leaders on this project: Debra Carey, Principal; Akiba Daniels, Senior Consultant; Leticia Reyes-Nash, Principal; Maddy Shea, Principal; and Doris Tolliver, Principal.

Learn more at rtbhealthcare.org.

For details about HMA’s work in health equity, go to:

Continue the Conversation

Raising the Bar will be featured in discussions at Unlocking Solutions in Medicaid, Medicare, and Marketplace, a conference powered by HMA taking place in Chicago, October 7-9.

July 24, 2024

Raising the Bar: Improving Health Equity through Actionable Frameworks

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How Can We Better Transition Healthcare Services for People Leaving Incarceration?

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Linda Follenweider, an advanced practice registered nurse and board-certified family nurse practitioner with extensive experience in correctional healthcare, discusses the critical gaps in continuity of care for incarcerated individuals. She emphasizes how many receive necessary medical care while in jail or prison but struggle to maintain this care upon release. Highlighting the significant health risks and economic costs associated with this disconnect, she advocates for integrating correctional healthcare into the broader healthcare continuum. The episode showcases the opportunities presented by adopting routine screening questions about incarceration history to ensure better health outcomes and resource utilization.

CMS’s newly released CY 2025 Medicare Physician and Hospital Outpatient Proposed Rules include proposals supporting primary care, care coordination, and increased access to care for Medicare Beneficiaries

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This week, our In Focus section provides an overview of the two key Medicare proposed payment rules that the Centers for Medicare & Medicaid Services (CMS) released last week—the Physician Fee Schedule (PFS) and the Hospital Outpatient Prospective Payment System (OPPS). These two rules include policies that will affect a variety of providers. Below we highlight some key provisions. Comments on these proposals are due to CMS in early September.

PFS Proposed Rule for 2025

Released on July 10 and with comments due by September 9, this wide-ranging regulation proposes policy changes for many different types of providers.

PFS Payment Update: The estimated 2025 PFS conversion factor is $32.36, a $0.93 or 2.80 percent decrease from the calendar year (CY) 2024 level of $33.29, which included a one-time update required by statute. In previous years with cuts like this one looming, Congress has stepped in and adjusted the payment update in the positive direction. Congress is now considering approaches to do so again for this year.

Caregiver training services (CTS): CMS is proposing a new code for caregiver training for direct care services and supports such as wound dressing changes, infection control, and medication administration. These services could be provided via telehealth.

Telehealth services: CMS is proposing to add several new codes to the telehealth list and to refine a variety of policies related to the type of technology that must be used and what supervision must be provided for telehealth services and other requirements such as removing frequency limitations. Nonetheless, several telehealth flexibilities will end December 31, 2024, because of the expiration of pandemic era expansions unless Congress extends or makes telehealth flexibilities permanent.

Advanced primary care management services (APCM): CMS proposes to create a new set of APCM codes that would incorporate parts of several existing care management and communication technology-based services into a monthly bundle of services. The billing codes are differentiated by three levels based on a person’s number of chronic conditions and enrollment as a qualified Medicare beneficiary to reflect patient medical and social complexity. These APCM services could be provided by advanced primary care teams and are tied to primary care quality measures.

CMS seeks feedback on whether the agency should consider additional payment policies to recognize the delivery of advanced primary care, including on potential changes to coding and payment policies within traditional Medicare such as for additional bundles of services.

Behavioral health services: CMS is proposing new codes for behavioral health crisis services, including safety planning and interventions for patients at risk of suicide or overdose, follow-up contact after a crisis emergency department (ED) visit, for digital mental health treatment (DMHT) services, and for nonphysician practitioners to bill for interprofessional consultations.

Screening and risk assessment: The agency updates and expands coverage for screening and preventive services, including proposals to cover screening computed tomography colonography (CTC) for colorectal cancer, drugs covered as additional preventive services, the hepatitis B vaccine, and cardiovascular risk assessment and risk management.

Dental and oral health services: CMS proposes to add services provided to Medicare beneficiaries with end-stage renal disease to the list of clinical scenarios in which Medicare payment may be made for dental services. CMS also seeks comments on other clinical conditions appropriate for coverage.

Improving ambulatory specialty care: CMS seeks stakeholder feedback about a potential Innovation Center model that would increase specialist participation in value-based care through Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) and expand incentives for primary and specialty care coordination.

Medicare Shared Savings Program (MSSP): CMS is proposing several refinements to the permanent accountable care program. These include a prepaid shared savings option that lets eligible accountable care organizations that have previously earned shared savings to receive advanced earned shared savings to make investments that support beneficiaries, the addition of a health equity benchmark adjustment (HEBA) that increases an ACO’s historical benchmark based on proportion of beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS) or dually eligible for Medicare and Medicaid, changes to the MSSP quality measure set to align the measure with the universal foundation measure set and seeking comment on creating a risk track that is higher than what currently exists.

Rural health clinics and federally qualified health centers: CMS proposes several changes to update payment and coverage of services provided in these facilities including care coordination services, vaccines, and dental services.

Payment for major surgical procedures: CMS makes coding proposals to address scenarios in which follow-up care for beneficiaries who have undergone major surgical procedures is provided by different clinicians in different group practices.

Opioid treatment programs: CMS makes several proposals related to opioid treatment programs, including allowing assessments conducted via audio-only telecommunications, and increasing payments for social determinants of health (SDOH) risk assessments. CMS also proposes to pay for new FDA-approved opioid agonist and antagonist medications.

2025 Medicare Hospital OPPS Proposed Rule

CMS released the Medicare Hospital OPPS proposed rule on July 10, 2024, with comments due by September 9, 2024. This regulation proposes policy changes that largely impact hospital outpatient departments and ambulatory surgery centers (ASCs).

OPPS and ASC Updates: CMS proposes to update OPPS rates for hospitals that meet applicable quality reporting requirements as well as ASCs by 2.6 percent.

Access to non-opioid pain relief: The Consolidated Appropriations Act (CAA) of 2023, provides temporary additional payments for certain non-opioid treatments for pain relief in hospital outpatient department (HOPD) and ASC settings from January 1, 2025, through December 31, 2027. CMS proposes to implement this law with proposals on the evidence requirements for medical devices and the Food and Drug Administration (FDA)-approved indications that would meet the criteria for the temporary additional payments. CMS has identified seven drugs and one device that would qualify as non-opioid treatments for pain relief and proposes that they receive separate payment in 2025. CMS also is soliciting comments on other products that may qualify for these payments.

Justice-involved individuals: To support individuals returning to the community from incarceration, CMS proposes to narrow the definition of “custody” in Medicare’s payment exclusion rule and to revise the Medicare special enrollment period (SEP) for formerly incarcerated individuals. These modifications would remove real or perceived barriers to Medicare access for individuals who have recently been released from incarceration or are on parole, probation, or home detention.

Maternal health: CMS is proposing several new maternal health related requirements for hospitals and critical access hospitals (CAHs). The proposed changes to conditions of participation, include new requirements for maternal quality assessment and performance improvement; baseline standards for the organization, staffing, and delivery of care within obstetrical units; and annual staff training on evidence-based maternal health practices. CMS further proposes changes to the emergency services requirements related to emergency readiness for hospitals and CAHs that provide emergency services.

Connect with Us

HMA’s Medicare policy experts collaborate to monitor legislative and regulatory developments in the physician, outpatient, and ASC policy arenas and to assess the impact of changes in these reimbursement systems. HMA’s Medicare experts interpret and model policy proposals and use these analyses to assist clients in developing their strategic plans and comment on proposed regulations.

For more information or questions about the policies described below, please contact Amy Bassano, Zach Gaumer, Kevin Kirby, or Rachel Kramer.

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1243 Results found.

Medicaid: A Critical Safety Net that Remains Strong

Medicare: Leading in Innovation and Coverage

HMA’s Commitment to Medicaid and Medicare

Looking Ahead

PFS Proposed Rule for 2025

2025 Medicare Hospital OPPS Proposed Rule