New CMS Rule Addresses Providing Care to Underserved Communities

Aug. 4, 2023
Rule promotes high-quality patient support and rewards hospitals that deliver

A new payment rule issued by the Centers for Medicare & Medicaid Services (CMS) focuses on providing care and support for underserved communities, and rewards inpatient and long-term hospitals that achieve the best individual outcomes and safest care.

The fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule “updates Medicare payments and policies for hospitals as required by statute; adopts hospital quality measures to foster safety, equity, and reduce preventable harm in the hospital setting; and recognizes homelessness as an indicator of increased resource utilization in the acute inpatient hospital setting.” 

The rule will result in an increase in operating payment rates of 3.1% for “acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record users.” This reflects an FY 2024 projected hospital market update of 3.3%, reduced by a statute-required productivity adjustment of a 0.2 percentage point. Under the LTCH PPS, CMS expects FY 2024 payments to increase by approximately 0.2% or $6 million. 

CMS Administrator, Chiquita Brooks-LaSure, said, “As part of CMS’ health equity goals, we are rewarding hospitals that deliver high-quality care to underserved populations and, for the first time, also recognizing the higher costs that hospitals incur when treating people experiencing homelessness. With these changes, CMS is laying the foundation for a health system that delivers higher quality, more equitable, and safer care for everyone.” 

Along with the new payment rule, CMS is also finalizing a policy to “recognize the higher costs that hospitals incur when treating people experiencing homelessness when hospitals report social determinants of health codes on claims, meaning that hospitals will generally receive higher payments when a patient is experiencing homelessness.” In addition, CMS is finalizing the policy that allows rural emergency hospitals (REHs) to be designated as graduate medical education training sites. 

A fact sheet on the final payment rule is available here, and the FY 2024 IPPS/LTCH PPS final rule can also be downloaded from the Federal Register.

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