The Centers for Medicare & Medicaid Services (CMS) has proposed significant updates to the Medicare hospital inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) for fiscal year (FY) 2025. These proposed changes, outlined in the FY 2025 IPPS and LTCH PPS proposed rule issued on April 10, 2024, aim to refine payment methodologies and enhance the quality of care provided to Medicare beneficiaries. A critical component of these updates involves Acute Care Hospital Quality Improvement Program Measures Fy 2029, which are designed to drive better patient outcomes and hospital performance. This article delves into the key provisions of this proposed rule, with a particular focus on the quality improvement measures that will shape hospital practices in the coming years, especially leading up to FY 2029.
The proposed rule, available on the Federal Register, addresses essential annual updates to Medicare payment policies for IPPS hospitals and LTCHs. It builds upon existing frameworks like the Hospital Inpatient Quality Reporting (IQR) program and introduces new measures and modifications to ensure continuous improvement in healthcare delivery. Understanding these proposed changes is crucial for hospitals, healthcare providers, and stakeholders in the healthcare industry.
IPPS and LTCH PPS: A Foundation for Payment and Quality
The IPPS governs how CMS pays acute care hospitals for inpatient stays, while the LTCH PPS applies to long-term care hospitals. Both systems utilize prospective payment rates, primarily determined by patient diagnosis, treatments, and illness severity. Hospitals receive a single payment per case based on classifications like Medicare Severity Diagnosis-Related Groups (MS-DRGs) for IPPS and Medicare Severity Long-Term Care Diagnosis-Related Groups (MS-LTC-DRGs) for LTCH PPS.
These payment systems are annually updated to reflect changes in the costs of goods and services hospitals use, as well as other economic factors. The hospital “market basket” index is used for IPPS updates, while LTCHs have a separate market basket. Payments are adjusted based on factors like patient condition and geographic labor costs.
Proposed Payment Rate Adjustments and Quality Programs
For FY 2025, CMS proposes a 2.6% increase in operating payment rates for acute care hospitals under IPPS that actively participate in the Hospital IQR program and are meaningful electronic health record (EHR) users. This figure accounts for a projected 3.0% hospital market basket increase, offset by a 0.4 percentage point productivity adjustment.
However, hospitals may also face payment adjustments through various quality-focused programs:
- Hospital Readmissions Reduction Program (HRRP): Penalties for excess readmissions.
- Hospital Acquired Condition (HAC) Reduction Program: 1% payment reduction for hospitals in the lowest-performing quartile regarding HACs.
- Hospital Value-Based Purchasing (VBP) Program: Potential upward or downward payment adjustments based on value and quality performance.
Overall, CMS anticipates a $3.2 billion increase in hospital payments in FY 2025 due to these proposed operating and capital IPPS payment rate changes. This includes an estimated $2.9 billion increase from operating and capital IPPS payments, a $560 million rise in Medicare uncompensated care payments to disproportionate share hospitals (DSH), and a projected $94 million increase in new medical technology add-on payments.
For LTCH PPS, a 2.8% increase in the standard payment rate is expected for FY 2025. LTCH PPS payments are projected to rise by approximately 1.2% or $26 million, mainly influenced by a decrease in high-cost outlier payments.
Enhancing Hospital Quality Reporting (IQR) Program
The Hospital IQR Program is central to acute care hospital quality improvement program measures fy 2029. It mandates that hospitals report quality data to receive full annual payment updates under the IPPS. Failure to meet program requirements results in a one-fourth reduction in their Annual Payment Update.
The FY 2025 proposed rule introduces significant changes to the Hospital IQR Program, including the adoption of seven new quality measures, removal of five existing ones, and modification of an eCQM. These changes are critical for shaping acute care hospital quality improvement program measures fy 2029 and beyond.
Specifically, the proposed new measures include:
- Hospital Harm – Falls with Injury eCQM: Reporting begins CY 2026/FY 2028 payment determination.
- Hospital Harm – Post-operative Respiratory Failure eCQM: Reporting begins CY 2026/FY 2028 payment determination.
- Thirty-day Risk-Standardized Death Rate among Surgical Inpatients with Complications (Failure-to-Rescue) claims-based measure: Reporting from July 1, 2023 – June 30, 2025, impacting FY 2027 payments.
- Patient Safety Structural Measure: Reporting begins CY 2025/FY 2027 payment determination.
- Age Friendly Hospital structural measure: Reporting begins CY 2025/FY 2027 payment determination.
- Catheter-Associated Urinary Tract Infection Standardized Infection Ratio Stratified for Oncology Locations measure: Reporting begins CY 2026/FY 2028 payment determination.
- Central Line-Associated Bloodstream Infection Standardized Infection Ratio Stratified for Oncology Locations measure: Reporting begins CY 2026/FY 2028 payment determination.
These new measures signify a move towards more comprehensive patient safety assessments and targeted infection control strategies, particularly in specialized settings like oncology units. The focus on falls with injury and post-operative respiratory failure addresses critical areas of patient harm within hospitals.
The modification of the Global Malnutrition Composite Score eCQM to include patients aged 18 to 64, in addition to those 65 and older, expands the scope of nutritional screening and intervention. Changes to the HCAHPS Survey, including new sub-measures on “Care Coordination,” “Restfulness of Hospital Environment,” and “Information about Symptoms,” aim to capture a more nuanced understanding of patient experience.
Five measures are proposed for removal, primarily payment measures related to 30-day episode costs for AMI, HF, PN, and THA/TKA. These are being replaced by the more broadly applicable Medicare Spending Per Beneficiary-Hospital measure in the Hospital VBP Program. The CMS PSI-04 Death Among Surgical Inpatients measure is also proposed for removal due to the adoption of the Failure-to-Rescue measure.
Increasing eCQM Reporting Requirements
Reflecting the growing importance of electronic clinical quality measures in acute care hospital quality improvement program measures fy 2029, CMS is proposing to increase the total number of mandatory eCQMs hospitals must report. Currently at six, the proposed rule suggests increasing this to nine eCQMs for the CY 2026 reporting period/FY 2028 payment determination, and further to eleven eCQMs for the CY 2027 reporting period/FY 2029 payment determination. By CY 2027, hospitals will be required to report eight CMS-selected eCQMs and three self-selected eCQMs.
This progressive increase in eCQM reporting underscores the emphasis on leveraging digital health infrastructure for quality measurement and improvement. The timeline leading to FY 2029 indicates a phased approach to implementing and assessing these enhanced reporting requirements.
Medicare Promoting Interoperability Program Updates
The Medicare Promoting Interoperability Program, formerly the EHR Incentive Program, continues to evolve, with proposed changes for eligible hospitals and CAHs. These include separating the Antimicrobial Use and Resistance (AUR) Surveillance measure into two distinct measures: Antimicrobial Use (AU) Surveillance and Antimicrobial Resistance (AR) Surveillance.
Two new eCQMs, Hospital Harm – Falls with Injury and Hospital Harm – Postoperative Respiratory Failure, are proposed for inclusion, aligning with the Hospital IQR Program. The Global Malnutrition Composite Score eCQM modification also extends to this program.
CMS is also proposing to increase the performance-based scoring threshold for this program from 60 to 80 points starting in CY 2025, raising the bar for meaningful use of EHR technology.
Long-Term Care Hospital Quality Reporting Program (LTCH QRP) Enhancements
Quality reporting in long-term care settings is also being enhanced. The LTCH QRP will see the addition of four new Social Determinants of Health (SDOH) items and modification of one SDOH item within the LTCH Continuity Assessment Record and Evaluation (CARE) Data Set (LCDS). These items cover Living Situation, Food, and Utility, aiming to better address patient needs during discharge planning.
The Transportation assessment item is also proposed for modification to improve data collection and reduce provider burden. These changes to the LTCH QRP reflect a broader recognition of the impact of social factors on patient health and outcomes.
Conclusion: Shaping Future Quality Measures
The FY 2025 IPPS and LTCH PPS proposed rule outlines significant changes to payment systems and quality reporting programs. The emphasis on acute care hospital quality improvement program measures fy 2029 is evident in the proposed additions and modifications to the Hospital IQR Program and the increasing focus on eCQM reporting. These measures, along with updates to the Medicare Promoting Interoperability Program and LTCH QRP, signal a continued drive towards value-based care and improved patient outcomes across the healthcare spectrum. Hospitals and healthcare stakeholders should carefully review these proposed changes to prepare for the evolving landscape of quality measurement and reporting in the coming years.
References:
- https://www.federalregister.gov/public-inspection/2024-07567/medicare-and-medicaid-programs-and-the-childrens-health-insurance-program-hospital-inpatient
- https://www.cms.gov/priorities/innovation/innovation-models/transforming-clinical-practices
- https://www.cms.gov/files/document/team-model-fs.pdf
- https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/24/fact-sheet-president-bidens-maternal-health-blueprint-delivers-for-women-mothers-and-families/
- https://www.whitehouse.gov/briefing-room/statements-releases/2023/02/07/fact-sheet-in-state-of-the-union-president-biden-to-outline-vision-to-advance-progress-on-unity-agenda-in-year-ahead/#:~:text=During%20his%20first%20State%20of,veterans%3B%20tackling%20the%20mental%20health
- https://www.whitehouse.gov/briefing-room/statements-releases/2023/05/18/fact-sheet-biden-harris-administration-announces-new-initiative-to-tackle-unsheltered-homelessness/
- https://www.cms.gov/files/document/sickle-cell-disease-action-plan.pdf
