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Key Takeaways from CMS Inpatient Rulemaking for 2024

Looking for information on CMS mandatory data reporting requirements for TJA that were introduced in 2023 rulemaking? Learn more here.

The Centers for Medicare & Medicaid Services (CMS) issued its FY 2024 Medicare hospital inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) final rule on August 1, 2023. Beyond setting payment rates for the coming year, a major focus of the 2024 final rule is advancing health equity. This is in line with the CMS Framework for Health Equity 2022-2023, which aims to enhance data collection and assessment in order to identify and address various care disparities across the US.

First, CMS is adding 15 new health equity hospital categorizations for payment impacts, which are intended to track the various populations hospitals serve across the country; these categories range from race and ethnicity to comorbidities and risk factors, including dual eligibility status patients, those with behavioral health conditions, and rural patients, among others.

Second, CMS is updating the severity designations of ICD-10-CM codes focusing on homelessness, effectively changing the consideration of homelessness from a “non-complication or comorbidity” to a “complication or comorbidity” designation; this is intended to recognize the typically higher costs incurred by hospitals treating higher proportions of patients experiencing homelessness.

Furthermore, CMS is also including health equity measures through changes to the hospital inpatient quality reporting (IQR) and value-based purchasing (VBP) programs; the former is a pay-for-reporting program that penalizes hospitals that do not fulfill data reporting requirements, while the latter either incentivizes or penalizes hospitals based on their performance on quality measures. A summary of some of the updates focused on health equity is provided below.

VBP Program Updates

  • Total Performance Scores (TPS) determine the incentives hospitals end up receiving under this program; in 2024, CMS is adjusting the maximum TPS from 100 to 110, adding 10 bonus Health Equity Adjustment (HEA) points to the score. This enables hospitals that have strong quality outcomes and also care for high proportions of dual eligibility status (DES) patients—which CMS notes are one of the most vulnerable healthcare populations—to be incentivized to ensure an equal quality of care is delivered to all patients.
  • Beginning in FY 2028, readmissions will “trigger new episodes of care”, enabling an improved assessment of the total costs that a hospital may be able to affect through high-quality care and care coordination.
  • As of FY 2030, a refined version of the hospital-level risk-standardized complication rate (RSCR) following elective primary THA/TKA, which has been expanded to include 26 mechanical complication ICD-10 codes, will come into effect, enabling more substantive capture of complications following these increasingly common procedures.
  • Changes to the administration of the hospital consumer assessment of healthcare providers and systems (HCAHPS) survey have also been introduced with the aim of improving accessibility. This includes the addition of “web-first” survey modes, allowing proxy respondents, extending the data collection period by an additional week, constricting supplementary survey items, and requiring the use of the official Spanish HCAHPS survey for patients who prefer it. CMS notes that attempting these changes in other programs has raised response rates and increased representation of some underrepresented groups.
  • A measure focusing on severe sepsis and septic shock will come into effect as of FY 2026; CMS believes that this measure will further improve health equity due to the presence of sepsis-related race and ethnicity based disparities, including higher mortality, for Black and Hispanic patients.

IQR Program Updates

  • 3 measures focused on preventing patient harm and improving safety are being adopted, particularly for pressure injury, acute kidney injury, and excess radiation or inadequate image quality. CMS believes that, because these issues affect patients with darker skin disproportionally and more severely, introducing these measures will assist hospitals in adjusting care to ensure all patients receive equal quality of care.
  • 2 measures have been adjusted to also include Medicare Advantage admissions, including all-cause mortality, all-cause readmission. Being able to collect data from a larger and more diverse patient population is intended to improve the analysis and evaluation of care disparities in various populations.

At Force Therapeutics, one of our central missions is to advance health equity in orthopedic care. Through thoughtful, high-quality digital care management, we believe care teams can expand and improve access for a variety of patient populations, from low-income and underinsured individuals to rural patients, those with mobility issues, or those who face language or technology barriers to care.

To make meaningful progress on health equity, health care systems will need to identify existing barriers to care that impact their own patient populations, and these CMS updates are a great step in the right direction. Our platform empowers care teams to collect, analyze, and report data related to health equity and social determinants of health in an efficient and intelligent manner. As the regulatory landscape continues to evolve to emphasize equal care across populations, well-designed digital health tools that are accessible and useful for all patients regardless of location, socioeconomic status, native language, or internet access will be increasingly adopted to alleviate the health disparities experienced by socially and economically disadvantaged populations.

Join thousands of healthcare executives, orthopedic surgeons, and care team members who trust Force as their digital care partner.

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