CMS Issues FY 2024 Inpatient Prospective Payment System Proposed Rule (CMS-1785-P)

On April 10, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that updates Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) for fiscal year (FY) 2024. Once these polices become final, they will cover inpatient hospital discharges on or after October 1, 2023. Highlights are described below:

  • CMS is proposing to use the FY 2022 MedPAR file and the 2021 Medicare cost report data for ratesetting, to return to their historical practice of using the most recent data available. In addition, CMS believes there will not be a significant difference in the number of difference in the number of COVID-19 hospitalizations in FY 2024 compared to FY 2022. 
  • A proposed increase in payment rates for acute care hospitals under IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) and demonstrate meaningful use of Electronic Health Record (EHR) program of approximately 2.8 percent.
  • Proposed codes changes include 395 new ICD-10-CM codes and 44 new ICD-10-PCS codes. In addition, there are 15 MS-DRGs proposed to be added and 16 MS-DRGs proposed to be deleted, many of which are in MDC 05 (Diseases and Disorders of the Circulatory System).
  • W.L. Gore and Associates, Inc., submitted an application for new technology add-on payments (NTAP) for the GORE® TAG® Thoracic Branch Endoprosthesis (TBE) device for FY 2023. CMS approved this NTAP in the FY 2023 final rule. The maximum new payment for a case involving the GORE® TAG® TBE device would be $27,807 for FY 2023 (65% of the average cost of the technology). This device, among others, is proposed to continue under the NTAP for FY 2024.
  • CMS is proposing the unadjusted national average hourly wage is $50.33. This includes adjustment of the labor-related share for discharges occurring on or after October 1, 2023 of 67.6 percent, which was finalized in FY 2022. CMS is proposing not to make any further changes to the labor-related share, therefore continuing to use 67.6 percent for the national standardized amounts for all IPPS hospitals (including those in Puerto Rico) that have a wage index value greater than 1.0000.
  • There are no proposed changes to the Hospital Readmissions Reduction Program for FY 2024. CMS is referring readers to the FY 2023 final rule for the most recent changes to the program.
  • Proposed changes to the performance standards for the Hospital Value-Based Purchasing (VBP) program include updates and adoption of multiple measures starting in future FY program years beyond FY 2024. In addition, CMS is proposing to modify the Total Performance Score (TPS) maximum to be at 110 to allow top-performing hospitals the opportunity to receive the additional health equity bonus points under the proposed health equity scoring change.
  • For hospitals excluded from IPPS payment, CMS has proposed the rate-of-percentage of 3.0, which will be applied to the FY 2023 target amounts to calculate the FY 2024 target amounts. If more recent data becomes available for the FY 2024 IPPS final rule, CMS would use it to calculate the final IPPS operating market basket update for FY 2024.   

The complete IPPS proposed rule summary can be found on the GORE Coding Resource Center website under “Education – CMS Rules Updates”: https://gore.rccsclients.com/education/rules-updates/.