What You Should Know:
– The U.S. Department of Health and Human Services (HHS) announced the final rule for Medicare payments and policies for inpatient hospitals and long-term care hospitals (LTCHs) for fiscal year (FY) 2025.
– The FY 2025 IPPS and LTCH PPS rule focuses on improving health outcomes, addressing social determinants of health, strengthening emergency preparedness, and promoting value-based care.
Increased Payments and Addressing Social Determinants of Health
- Acute care hospitals meeting specific criteria will see a projected 2.9% increase in operating payment rates. This aims to reflect rising healthcare costs while promoting quality care.
- LTCH payments will also increase by 3.0%.
- The rule recognizes the additional resources needed to care for patients experiencing homelessness and housing insecurity, leading to higher payments for these patients.
- LTCHs will be required to report data on social determinants of health, including housing and food security, to improve resource allocation.
Supporting Underserved Communities
- The rule expands access to new gene therapy treatments for sickle cell disease, particularly benefiting rural and underserved communities.
- Small independent hospitals, including many in rural areas, will receive funding to maintain essential medicine stockpiles, mitigating drug shortages.
- The graduate medical education program will increase funding for residency slots nationwide, with a focus on psychiatry and underserved communities.
Enhancing Patient Safety
- New hospital quality initiatives include measuring digital patient harm events, expanding infection control measures, and implementing structural measures to prioritize patient safety and age-friendly care.
- A permanent reporting structure for COVID-19, influenza, and RSV will be established, with additional reporting capabilities during public health emergencies.
Testing Innovative Payment Models
- A mandatory five-year pilot program called the Transforming Episode Accountability Model (TEAM) will begin in 2026. This program tests episode-based payments for five common, costly procedures, aiming to reduce costs while maintaining quality care.
- TEAM promotes collaboration between healthcare providers throughout a patient’s surgical episode and beyond, ensuring continuity of care.
- This model will also explore the connection between healthcare and climate change, allowing participants to voluntarily share data and receive technical assistance to improve climate sustainability.
“HHS continues to make health care more accessible and equitable. Every American should be able to get the care they need, regardless of whether they are struggling to afford their rent, the color of their skin, or what else is going on in the world,” said HHS Secretary Xavier Becerra. “The Biden-Harris Administration is acting to ensure hospitals have the prescription drugs and supplies they need. In addition, we are taking further steps to help people get innovative care that meets their needs and uses taxpayer dollars wisely.”
The FY 2025 IPPS and LTCH PPS final rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/current
