CMS Issues FY 2025 Inpatient Prospective Payment System Final Rule (CMS-1808-F)

On August 1, 2024, the Centers for Medicare & Medicaid Services (CMS) issued their final rule that updates Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) for fiscal year (FY) 2025. These finalized policies will cover inpatient hospital discharges on or after October 1, 2024. Highlights are described below:

CMS is finalizing to use the FY 2023 MedPAR file and the 2022 Medicare cost report data for ratesetting, to return to their historical practice of using the most recent data available.
A finalized increase in payment rates of approximately 2.9 percent 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.
Finalized codes changes include 252 new ICD-10-CM codes and 371 new ICD-10-PCS codes. Of interest is the addition of a new character for a code in section X, which is the New Technology section. This code is established for reporting procedures in which the GORE® EXCLUDER® Thoracoabdominal Branch Endoprosthesis (TAMBE) is used: X2VE3SA – Restriction of Descending Thoracic Aorta and Abdominal Aorta, using Branched Intraluminal Device, Manufactured Integrated System, Four or More Arteries, Percutaneous Approach, New Technology Group 10. In addition, there are 11 MS-DRGs to be added and 5 MS-DRGs to be deleted.
W.L. Gore and Associates, Inc., submitted an application for a new technology add-on payment (NTAP) for the GORE® EXCLUDER® Thoracoabdominal Branch Endoprosthesis (TAMBE Device) for FY 2025. According to GORE, the TAMBE Device received premarket approval (PMA) from the FDA on January 12, 2024. The approved maximum new payment for a case involving the TAMBE Device is $47,238.75 for FY 2025 (65% of the average cost of the technology).
CMS approved an NTAP for the GORE® TAG® Thoracic Branch Endoprosthesis (TBE) in the FY 2023 IPPS final rule. This device, among others, is finalized to continue under the NTAP for FY 2025.
CMS is finalizing the unadjusted national average hourly wage of $50.33. This includes adjustment of the labor-related share for discharges occurring on or after October 1, 2024, of 67.6 percent. In addition, CMS is finalizing 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 2025. CMS is referring readers to the FY 2023 final rule for the most recent changes to the program.
Finalized changes to the performance standards for the Hospital Value-Based Purchasing (VBP) program include modification and adoption of multiple measures starting in future FY program years beyond FY 2025. In addition, CMS is not proposing any changes to previously adopted quality measures for the Hospital VBP in the FY 2023 IPPS final rule for FY 2025.
CMS did not propose any additions or deletions of any measures, including retention policies from the Hospital-Acquired Condition (HAC) Reduction Program.
CMS is finalizing the creation and testing of the Transforming Episode Accountability Model (TEAM), which is a new mandatory alternative payment model. Through this process, TEAM would test whether financial accountability for these entire episodes of care would reduce Medicare costs, while maintaining or boosting the quality of care for Medicare beneficiaries.
For hospitals excluded from IPPS payment, CMS is finalizing the rate-of-percentage of 3.4, which will be applied to the FY 2023 target amounts to calculate the FY 2024 target amounts.

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/.