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FY2024 Hospital IPPS -Proposed Rule -The Brief

FY 2024 hospital inpatient prospective payment system Proposed Rule. On April 10, 2023, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2024 Medicare hospital inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) proposed rule. The IPPS pays hospitals for services provided to Medicare beneficiaries using a national base payment rate, adjusted for a number of factors that affect hospitals’ costs, including the patient’s condition and the cost of hospital labor in the hospital’s geographic area.

Changes to Payment Rates under IPPS The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS, Those that successfully participate in the Hospital Inpatient Quality Reporting (IQR) program and are meaningful electronic health record (EHR) users are projected to be 2.8%. This reflects a projected FY 2024 hospital market basket percentage increase of 3.0%, reduced by a 0.2 percentage point productivity adjustment. Hospitals may be subject to other payment adjustments under the IPPS, including:

• Payment reductions for excess readmissions under the HRRP.

• Payment reduction (1%) for the worst-performing quartile under the Hospital Acquired Condition (HAC) Reduction Program.

• Upward and downward adjustments under the Hospital Value-Based Purchasing (VBP) Program.

The proposed increase in operating and capital IPPS payment rates will generally increase hospital payments in FY 2024 by $3.3 billion. In addition, CMS projects Medicare disproportionate share hospital (DSH) payments and Medicare uncompensated care payments combined will decrease in FY 2024 by approximately $115 million. CMS also estimates that additional payments for inpatient cases involving new medical technologies will decrease by $460 million in FY 2024, primarily driven by the expiration of new technology add-on payments for several technologies.

This rule also includes proposed changes to GME payments for training in the new Medicare provider type, REH Rural Emergency Hospital, which was established by the Consolidated Appropriations Act, 2021, to address the growing concern over closures of rural hospitals. These changes, if finalized, would help support graduate medical training in rural areas by allowing these rural hospitals to serve as training sites for Medicare GME payment purposes after they become Rural Emergency Hospitals.

Go to to provide your input and to see the entire CMS proposed Rule.

STATUS Health Partners – Physician Management/ Staffing Company

Sam Patterson- AVP