Inpatient Prospective Payment Systems (IPPS)

Inpatient Prospective Payment Systems (IPPS) / en Sun, 15 Jun 2025 00:52:12 -0500 Tue, 10 Jun 25 15:41:20 -0500 AHA comments to CMS on FY 2026 IPPS proposal /news/headline/2025-06-10-aha-comments-cms-fy-2026-ipps-proposal The AHA <a href="/system/files/media/file/2025/06/aha-comments-on-cms-fy-2026-inpatient-prospective-payment-system-proposed-rule-letter-6-10-2025.pdf" target="_blank">commented</a> to the Centers for Medicare &amp; Medicaid Services June 10 on the fiscal year 2026 <a href="/news/headline/2025-04-11-cms-issues-hospital-ipps-proposed-rule-fy-2026" target="_blank">inpatient prospective payment system proposed rule</a> (/news/headline/2025-04-11-cms-issues-hospital-ipps-proposed-rule-fy-2026), expressing support for several provisions, including a proposed increase in disproportionate share hospital payments and several aspects of the agency’s quality-related proposals. However, the AHA said it was strongly concerned about proposed payment updates.“The proposed net payment update of 2.4% is simply inadequate given the unrelenting financial headwinds faced by hospitals and health systems,” the AHA wrote. “We are particularly concerned with the inappropriately large productivity cut that is being proposed. We urge the agency to re-examine the magnitude of this adjustment and its impact on Medicare payments.”The AHA was also concerned about CMS’ proposal to include Medicare Advantage patients in the Hospital Readmissions Reduction Program, saying that including MA patients in calculating readmissions penalties would effectively hold hospitals accountable for excessive and inappropriate coverage delays and denials on the part of MA plans. Tue, 10 Jun 2025 15:41:20 -0500 Inpatient Prospective Payment Systems (IPPS) AHA Comments on CMS FY 2026 Inpatient Prospective Payment System Proposed Rule /lettercomment/2025-06-10-aha-comments-cms-fy-2026-inpatient-prospective-payment-system-proposed-rule June 10, 2025The Honorable Mehmet Oz, M.D. Administrator Centers for Medicare &amp; Medicaid Services Hubert H. Humphrey Building 200 Independence Avenue, S.W. Room 445-G Washington, DC 20201&nbsp;RE: CMS-1833-P, Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2026 Rates; Requirements for Quality Programs; and Other Policy Changes, (Vol. 90, No. 82), April 30, 2025.Dear Administrator Oz:On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the �� Association (AHA) appreciates the opportunity to comment on the Centers for Medicare &amp; Medicaid Services (CMS) hospital inpatient prospective payment system (PPS) proposed rule for fiscal year (FY) 2026. We are submitting separate comments on the agency’s proposed changes to the long-term care hospital PPS and Transforming Episode Accountability Model.Hospitals are the backbone of America’s healthcare system, providing essential, life-saving care 24/7 to millions of people each year. They serve as critical centers for emergency response, specialized treatment, and chronic disease management, while also acting as major employers and economic engines within their communities. As communities across the country face demand for health services, it is essential that Medicare payment policies support the sustainability and availability of these providers.To that end, we support several of the inpatient PPS proposed rule provisions, including the proposed increase in disproportionate share hospital (DSH) payments. We also appreciate the agency’s interest in deregulatory activities in the Medicare program and have submitted our comments through the request for information website. We also support several aspects of CMS’ quality-related proposals, including CMS’ recognition of the importance of striking an appropriate balance of burden and value in quality measurement programs and the removal of certain quality measures in the quality reporting programs.At the same time, we continue to have strong concerns about the proposed payment updates. The proposed net payment update of 2.4% is simply inadequate given the unrelenting financial headwinds faced by hospitals and health systems. We are particularly concerned with the inappropriately large productivity cut that is being proposed. We urge the agency to re-examine the magnitude of this adjustment and its impact on Medicare payments.Finally, we have concerns over the agency’s proposal to include Medicare Advantage patients in the Hospital Readmissions Reduction Program. Specifically, we are concerned that by including MA patients in calculating readmissions penalties, CMS effectively would be holding hospitals accountable for excessive and inappropriate coverage delays and denials on the part of MA plans.We appreciate your consideration of these issues. Our detailed comments are attached. Please contact me if you have questions or feel free to have a member of your team contact Shannon Wu, AHA’s director for payment policy, at (202) 626-2963 or&nbsp;<a href="mailto:swu@aha.org">swu@aha.org</a>.Sincerely,/s/Ashley Thompson Senior Vice President Public Policy Analysis and DevelopmentAttachment: Hospital Inpatient Prospective Payment System Tue, 10 Jun 2025 14:24:59 -0500 Inpatient Prospective Payment Systems (IPPS) Overview of Final IPPS Rule (FY) 2026 /education-events/overview-final-ipps-rule-fy-2026 Overview of Final IPPS Rule (FY) 2026Date: &nbsp; Thursday August 28, 2025 12:00 – 1:00 PM Central TimeThis webinar will provide an overview of the published final rule for the fiscal year (FY) 2026 Inpatient Prospective Payment System (IPPS) specific to coding, MS-DRGs, NTAPs and other regulatory finalized proposals related to coding.Topics will include:<ul><li>MS-DRG classification – finalized changes</li><li>ICD-10-CM Severity Level Designations – outcome from proposed rule comments</li><li>Comprehensive CC/MCC Analysis – outcome from proposed rule comments</li><li>New Technology Add-on Payment (NTAP) – finalized NTAPs, corresponding ICD-10-CM/PCS codes for reporting and importance of data capture</li><li>Hospital Inpatient Quality Reporting Program – outcome of proposals with potential coding considerations</li><li>Transforming Episode Accountability Model (TEAM) – outcome of proposals</li><li>Other notable proposal finalizations specific to coding</li><li>Deregulation Request for Information (RFI) – updates/comments summary in response to RFI related to coding&nbsp;</li><li>References and Questions</li></ul>Speaker:&nbsp; Tammy Love, MSHI, RHIA, CCS, CDIP – Director Coding Classification and Policy, �� AssociationWebinar Cost:&nbsp; $38/personWe can only accept credit card payments and no refunds will be processed. Please make sure you are registering for the correct webinar. Please verify your email address before purchasing.For group registrations of 30 or more, information can be found <a href="https://sponsors.aha.org/HFC_GEN_Coding_Group_Registration_Landing_Page.html">here</a>. &nbsp; For registration questions, please email <a href="mailto:codingwebinars@aha.org">codingwebinars@aha.org.</a>CEU Information: &nbsp; 1-hour AAPC&nbsp; This program meets AAPC guidelines for 1.0 CEU. Can be split between Core A and all specialties except CIRCC and CPMS for continuing education units.1-hour AHIMA&nbsp; This program has been approved for 1 continuing education unit(s) for use in fulfilling the continuing education requirements of the American Health Information Management Association (AHIMA). Granting prior approval from AHIMA does not constitute endorsement of the program content or its program sponsor.If you can't attend on the live date, an on-demand link will be provided post-webinar. Fri, 23 May 2025 08:08:08 -0500 Inpatient Prospective Payment Systems (IPPS) Inpatient Rehabilitation Facility Prospective Payment System Proposed Rule for FY 2026 <div class="container"><div class="row"><div class="col-md-8">The Centers for Medicare &amp; Medicaid Services (CMS) April 11 issued its fiscal year (FY) 2026 <a href="https://www.federalregister.gov/documents/2025/04/30/2025-06336/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal" target="_blank" title="Proposed Rule Text">proposed rule</a> for the inpatient rehabilitation facility (IRF) prospective payment system (PPS). This rule proposes to update IRF payments and modify the IRF quality reporting program (QRP) measures and reporting requirements.&nbsp;<div class="panel module-typeC"><div class="panel-heading">KEY HIGHLIGHTSThe proposed rule would:<ul><li>Increase overall payments by a net 2.8%. This includes a proposed market basket update of 3.4%, less a productivity cut of 0.8%, as well as a 0.2% increase related to outlier payments.</li><li>Make a minor upward adjustment to the labor-related share.</li><li>Remove two measures and four SPADEs from the IRF QRP.</li><li>Solicit comments&nbsp;on approaches and opportunities to streamline regulations and reduce administrative burdens on hospitals and other providers.</li></ul></div><div>&nbsp;</div></div><h2>AHA TAKE</h2>The proposed rule includes routine payment updates to the IRF PPS. However, the AHA remains concerned that market basket increases have not kept pace with the rise in hospital expenses in recent years. We will continue to highlight the financial and other pressures facing hospitals and pursue opportunities for regulatory relief.<h2>WHAT YOU CAN DO</h2><ul><li>Share this advisory with your senior management team to examine the impact these payment changes would have on your organization in FY 2026.</li><li>Attend an&nbsp;<a href="https://aha-org.zoom.us/webinar/register/WN_QVOCu7XTTFygFK9Ey9aZAw#/registration">upcoming AHA webinar on May 20</a> on the proposed rule.</li><li>Submit to CMS by June 10 a comment letter on the proposed rule explaining the rule’s impact on your patients, staff, facility and local health care partners. Comments may be submitted at <a href="http://www.regulations.gov/">www.regulations.gov</a>. The final rule will be effective Oct. 1, 2025.</li></ul><h2>PROPOSED FY 2026 IRF PPS PAYMENT UPDATES&nbsp;</h2>Proposed IRF Market Basket Update for FY 2026.&nbsp;On an annual basis, CMS updates IRF PPS rates by the market basket increase, which is an estimate of the cost of goods and services provided by IRFs. The agency currently forecasts a market basket increase of 3.4% for FY 2026. However, it is also required under law to apply a productivity cut to the update factor, which for FY 2026 is currently 0.8%. It also proposes&nbsp;a 0.2% increase related to outlier payments, as described further below.&nbsp;Therefore, the net update would be 2.8% in FY 2026 as compared to FY 2025. CMS states that, as it has done historically, it will utilize any updated market basket and productivity estimates that are available for the final rule. Therefore, IRFs can expect that there may be changes to these figures.Proposed Case-mix Weights and Average Lengths of Stay.&nbsp;Every IRF claim is assigned to a case-mix group (CMG) and tier. Each CMG and tier are assigned a weight based upon the estimated cost of providing care relative to other cases. That weight is multiplied by the standard payment conversion factor and other adjustments, such as a wage index and several others, to determine payment for the case. CMS also assigns each CMG an average length of stay (ALOS). The ALOS is used to determine whether that discharge is subject to the short-stay transfer policy, which necessitates a per-diem payment for the case. CMS proposes using FY 2024 IRF claims and FY 2023 IRF cost report data, which are the most recently available data, to update the CMG and tier relative weights and ALOS values for FY 2026. The new proposed CMG weights and ALOS values are available in Table 2 of the proposed rule.According to CMS’ analysis in Table 3 of the proposed rule, CMG changes would result in 99.2% of cases falling into CMGs and tiers that would receive a less than 5% increase or decrease in weight. ‎In addition, CMS says that the proposed changes in the ALOS values “are small and do not show any particular trends in IRF length of stay patterns.” <a>CMS also applies a budget neutrality factor to its updated standard payment rate (discussed below) for any overall aggregate payment changes estimated to result from CMG weight changes. The proposed budget neutrality factor for FY 2026 is 0.9985, or -0.15%.</a>As it typically does, CMS states that it will use updated claims and cost report data in the final rule if such data becomes available. This typically has resulted in small adjustments in the final rule from what was originally proposed.Proposed Labor-related Share.&nbsp;CMS proposes a small increase to the labor-related share of the IRF PPS rate. The labor-related share is the percentage of a payment that is adjusted by a wage index factor to account for regional variation in labor costs. This year, CMS proposes increasing the labor-related share by 0.1%, from 74.4% to 74.5%. Consistent with other payment elements, CMS will use any updated data that becomes available prior to the final rule being released to update the final labor-related share, as appropriate.&nbsp;Proposed Wage Index Adjustments.&nbsp;CMS uses wage indexes to adjust IRF payments regionally to account for variation in labor cost. To do this, CMS utilizes core-based statistical areas (CBSAs) established by the Office of Management and Budget (OMB). Each county or county equivalent is assigned to a CBSA. Further, each CBSA is assigned a wage index. CBSAs also are designated as either urban or rural, and rural hospitals receive a 14.9% payment increase under the IRF PPS. CMS currently uses CBSAs adopted from a July 2023&nbsp;<a href="https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf" target="_blank">bulletin</a> issued by OMB. It proposes continuing to utilize these CBSAs for wage index purposes.&nbsp;Wage index levels can vary from year to year based on updated wage index data. However, CMS states that it will continue to apply its existing policy of applying a 5% year-to-year cap on any reductions in an individual IRF’s wage index. Further, CMS says it would continue its transition policy for IRFs that lost their rural status effective FY 2025. Specifically, these IRFs would receive one-third of the FY 2024 rural adjustment in FY 2026, and the full FY 2027 wage index without a rural adjustment in FY 2027. These changes would continue to be made in a budget neutral fashion.As with changes to CMG weights, CMS applies a budget neutrality factor to its updated standard payment rate (discussed below) for any overall aggregate payment changes estimated to result from wage index and labor-related share changes. The proposed budget neutrality factor for wage index and labor-related charge changes for FY 2026 is 0.9997, or -0.03%.Proposed Outlier Thresholds.&nbsp;CMS sets the outlier threshold with the goal of outlier payments accounting for 3% of total payments to IRFs in a FY. A case qualifies for an outlier payment if the estimated cost of the case exceeds the adjusted outlier threshold for that case. However, CMS estimates that the current outlier threshold of&nbsp;$12,043 will result in outlier payments accounting for 2.8% of total IRF payments in FY 2025. Therefore, the agency proposes to lower the threshold to&nbsp;$11,971 for FY 2026 to enable outlier payments to make up 3% of total payments. This 0.2% increase in outlier payments would result in an estimated $20 million reduction in aggregate payments to IRFs compared to FY 2025.Proposed Updated Standard Payment Conversion Factor.&nbsp;The Standard Payment Conversion Factor (SPCF) is the amount by which CMG weights and other payment adjustments are multiplied to determine a final payment amount for an IRF discharge. Updates to the SPCF reflect updates to the <a>IRF PPS market basket&nbsp;</a>and budget neutrality factors to account for changes in the CMG weights, labor-related share and wage adjustments. Table 5 in the rule, shown below, illustrates the various adjustments that lead to the proposed FY 2026 SPCF of $19,364.&nbsp;<img src="/sites/default/files/inline-images/image_71.png" data-entity-uuid="082c9203-9141-4b13-be8d-c5c791d5446d" data-entity-type="file" alt="Table 5 image" width="893" height="383">Table 6 in the proposed rule provides the payment rates for all proposed FY 2026 CMGs and tiers after applying the proposed updated SPCF and proposed updated CMG relative weights.Overall Estimated Payment Changes.&nbsp;CMS provides an estimated breakdown of how each proposal would impact payments overall and for different types of IRFs. As shown in a portion of Table 15 of the rule reproduced below, both urban and rural facilities would receive similar overall updates for FY 2026, with small differences attributable to how the change in the outlier threshold and the new wage policies would affect rural and urban facilities differently.<img src="/sites/default/files/inline-images/image_72.png" data-entity-uuid="63e506d5-3ceb-41b9-a0c7-3430eaca35c4" data-entity-type="file" alt="Table 15 Image" width="963" height="798"><h2>IRF QUALITY REPORTING PROGRAM</h2>As mandated by the Affordable Care Act, IRFs receiving Medicare payments have been required to participate in the IRF QRP since 2014. The Improving Medicare Post-Acute Care Transformation (IMPACT) Act requires that, starting FY 2019, providers must report standardized patient assessment data elements (SPADEs) as part of the IRF QRP. Failure to comply with these requirements results in a 2-percentage point reduction to the IRF’s annual market-basket update.CMS proposes to <a>remove two measures and four SPADEs from the IRF QRP</a>. The rule also includes proposed administrative changes and several requests for information.Table 1: Proposed and Finalized Measures for the IRF QRP, FY 2024-FY 2026<div align="center"><table border="1" cellspacing="0" cellpadding="0" width="684"><thead><tr><th width="120">Data Source</th><th width="354">Measure</th><th width="66">FY 24</th><th width="66">FY 25</th><th width="78">FY 26</th></tr></thead><tbody><tr><td rowspan="4" width="120">National Healthcare Safety Network</td><td width="354">Catheter-associated Urinary Tract Infection</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Clostridium difficile&nbsp;Infection</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Influenza Vaccination Coverage Among Health Care Personnel &nbsp;</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">COVID-19 Vaccination Coverage Among Health Care Personnel</td><td width="66">X</td><td width="66">X</td><td width="78">Removal*</td></tr><tr><td rowspan="12" width="120">IRF Patient Assessment Instrument</td><td width="354">Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay)</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Functional Status: Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function</td><td width="66">X</td><td width="66">&nbsp;</td><td width="78">&nbsp;</td></tr><tr><td width="354">Change in Self-Care Score for Medical Rehabilitation Patients</td><td width="66">X</td><td width="66">&nbsp;</td><td width="78">&nbsp;</td></tr><tr><td width="354">Change in Mobility Score for Medical Rehabilitation Patients</td><td width="66">X</td><td width="66">&nbsp;</td><td width="78">&nbsp;</td></tr><tr><td width="354">Discharge Self-Care Score for Medical Rehabilitation Patients</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Discharge Mobility Score for Medical Rehabilitation Patients</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Drug Regimen Review Conducted with Follow-up for Identified Issues</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Transfer of Health Information to Provider</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Transfer of Health Information to Patient</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Discharge Function Score</td><td width="66">&nbsp;</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Percent of Patients/Residents Who Are Up to Date with COVID-19 Vaccination</td><td width="66">&nbsp;</td><td width="66">&nbsp;</td><td width="78">Removal*</td></tr><tr><td rowspan="4" width="120">Claims</td><td width="354">Medicare Spending Per Beneficiary for Post-acute Care IRF QRP</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Discharge to Community</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Potentially Preventable 30-day Post-discharge Readmission Measure for IRF QRP</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr><tr><td width="354">Potentially Preventable Within Stay Readmission Measure for IRFs</td><td width="66">X</td><td width="66">X</td><td width="78">X</td></tr></tbody></table></div>X= Measure required for reporting as previously finalized *ProposedProposed Removal of Two COVID-19 Vaccination Measures.&nbsp;For the FY 2026 IRF QRP, CMS proposes to remove&nbsp;two COVID-19 vaccination measures — one focused on patients and the other on health care personnel. CMS believes removing these two measures would reduce burden to IRFs and they are no longer necessary given the conclusion of the COVID-19 public health emergency.Proposed Removal of Four Social Determinants of Health (SDOH) SPADEs.&nbsp;Beginning with the FY 2028 IRF QRP, CMS proposes to remove four SPADEs under the SDOH category. This category was finalized in the FY/CY 2020 final rules for the IRF, skilled nursing facility, LTCH and home health QRPs and currently comprises SPADEs addressing the following topics:<ul type="disc"><li>Race.</li><li>Ethnicity.</li><li>Preferred language.</li><li>Interpreter services.</li><li>Health literacy.</li><li>Social isolation.</li><li>Transportation.</li></ul>With a stated purpose of reducing administrative burden to IRFs, CMS proposes removing four SPADEs it adopted in the FY 2025 IRF PPS final rule that are focused on:<ul type="disc"><li>Living situation.</li><li>Food security.</li><li>Utilities.</li></ul>CMS indicates that the items would become optional for reporting beginning Oct. 1, 2025, and be phased out of the IRF QRP altogether by FY 2028.Reconsideration Process.&nbsp;Most CMS quality reporting and value programs — including the IRF QRP — include a reconsideration process permitting providers to appeal a CMS initial determination of noncompliance with reporting or other programmatic requirements. In the rule, CMS proposes allowing IRFs to request an extension to file a request for reconsideration in the event the organization experiences an extraordinary circumstance (e.g., natural disaster) that overlaps with the deadline for filing a reconsideration request.CMS also proposes to clarify the basis on which the agency can grant a reconsideration request and reverse an initial determination of noncompliance. Specifically, CMS would reverse a finding of noncompliance only if it determines that the IRF was in full compliance with the IRF QRP requirements for the applicable program year. This includes, when relevant, complying with CMS’ established policies for requesting and receiving an extraordinary circumstance exception from reporting.Request for Information. The proposed rule includes requests for information on three key areas. First, CMS asks for input on new measure concepts focused on interoperability, well-being, nutrition, and delirium. Second, CMS seeks input on how to advance the uptake of digital quality measures in the IRF QRP. CMS is particularly interested in the extent to which IRFs are using application programming interfaces based on the Fast Healthcare Interoperability Resource (FHIR) standard to support any data reporting or exchange functions. Third, CMS seeks input on decreasing the amount of time that IRFs have to submit quarterly quality measure and SPADE data to CMS. Currently, IRFs have four and a half months after a quarter closes to submit data to CMS. CMS seeks input on potentially requiring that quality and SPADE data be submitted 45 days after the close of a quarter. The agency believes this would result in more timely publicly-reported data on IRF performance.<h2>REQUEST FOR INFORMATION: EXECUTIVE ORDER 14192 “UNLEASHING PROSPERITY THROUGH DEREGULATION”</h2>On Jan. 31, 2025, President Trump issued Executive Order (EO) 14192, "Unleashing Prosperity Through Deregulation," which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. Accordingly, CMS is soliciting public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. CMS is collecting responses at&nbsp;<a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.cms.gov%2Fmedicare-regulatory-relief-rfi&amp;data=05%7C02%7Cjgold%40aha.org%7C4cd60274604142c4278308dd7b7460c2%7Cb9119340beb74e5e84b23cc18f7b36a6%7C0%7C0%7C638802461951091442%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=oVpGbZYA%2Bop4qTxZ4eXdtgj417%2BP2swWi8qUj%2FsAsYw%3D&amp;reserved=0" target="_blank" title="Original URL: https://www.cms.gov/medicare-regulatory-relief-rfi. Click or tap if you trust this link.">https://www.cms.gov/medicare-regulatory-relief-rfi</a> and requests stakeholders submit comments through the provided web link by June 10.<h2>FURTHER QUESTIONS</h2>Please contact Jonathan Gold, the AHA’s senior associate director of policy, at&nbsp;<a href="mailto:jgold@aha.org">jgold@aha.org</a>, with any questions related to payment, and Akin Demehin, the AHA’s vice president of quality and safety policy, at&nbsp;<a href="mailto:ademehin@aha.org">ademehin@aha.org</a>, regarding any quality-related questions.&nbsp;</div><div class="col-md-4"><a href="/system/files/media/file/2025/05/inpatient-rehabilitation-facility-prospective-payment-system-proposed-rule-for-fy-2026-advisory-5-15-2025.pdf"><img src="/sites/default/files/2025-05/cover-inpatient-rehabilitation-facility-prospective-payment-system-proposed-rule-for-fy-2026-advisory-5-15-2025.png" data-entity-uuid data-entity-type="file" alt="Advisory Cover Image" width="NaN" height="NaN"></a>&nbsp;</div><div class="col-md-4">&nbsp;</div></div></div> Thu, 15 May 2025 15:38:25 -0500 Inpatient Prospective Payment Systems (IPPS) Overview of Proposed IPPS Rule (FY) 2026 /education-events/overview-proposed-ipps-rule-fy-2026 Date: &nbsp; Thursday, May 22, 2025&nbsp; 12:00 – 1:00 PM Central TimeThis webinar will provide an overview of the published CMS proposed rule for the fiscal year (FY) 2026 Inpatient Prospective Payment System (IPPS).The FY 2026 IPPS proposed rule webinar will provide insight to the FY 2026 IPPS proposals related to coding, MS-DRGs, NTAPs and other regulatory proposal considerations.<ul><li>MS-DRG Classifications Review – proposed changes and updates</li><li>Severity levels for ICD-10-CM codes – proposed revisions</li><li>Comprehensive CC/MCC Analysis – status and proposals&nbsp;</li><li>&nbsp;New Technology Add-on Payments (NTAPs) – summary of proposals and importance of data capture&nbsp;</li><li>Hospital Inpatient Quality Reporting Program – proposals with potential coding considerations&nbsp;</li><li>&nbsp;Transforming Episode Accountability Model (TEAM) – status and proposals</li><li>Other notable coding related proposals&nbsp;</li><li>References and Questions</li></ul>Speaker:&nbsp; Tammy Love, MSHI, RHIA, CCS, CDIP – Director Coding Classification and Policy, �� AssociationWebinar Cost:&nbsp; $38/personWe can only accept credit card payments and no refunds will be processed. Please make sure you are registering for the correct webinar. Please verify your email address before purchasing.For group registrations of 30 or more, information can be found <a href="https://sponsors.aha.org/HFC_GEN_Coding_Group_Registration_Landing_Page.html" target="_blank">here</a>. &nbsp;&nbsp; For registration questions, please email <a href="mailto:codingwebinars@aha.org">codingwebinars@aha.org</a>.CEU Information: &nbsp; 1 hour AAPC&nbsp; This program meets AAPC guidelines for 1.0 CEU. Can be split between Core A and all specialties except CIRCC and CPMS for continuing education units.1 hour AHIMA&nbsp; This program has been approved for 1 continuing education unit(s) for use in fulfilling the continuing education requirements of the American Health Information Management Association (AHIMA). Granting prior approval from AHIMA does not constitute endorsement of the program content or its program sponsor.If you can't attend on the live date, an on-demand link will be provided post-webinar. &nbsp; Wed, 14 May 2025 09:26:18 -0500 Inpatient Prospective Payment Systems (IPPS) Inpatient PPS Proposed Rule for FY 2026 <div class="container"><div class="row"><div class="col-md-8">The Centers for Medicare &amp; Medicaid Services (CMS) April 11 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS&nbsp;<a href="https://www.federalregister.gov/documents/2025/04/30/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the" target="_blank" title="IPPS and LTCH PPS Proposed rule for fiscal year 2026.">proposed rule</a>&nbsp;for fiscal year (FY) 2026. Comments on the proposed rule are due to CMS by June 10. The final rule will be published on or around Aug. 1 and take effect Oct. 1.The rule affects inpatient PPS hospitals, critical access hospitals (CAHs), LTCHs and PPS-exempt cancer hospitals. A&nbsp;summary of the proposals related to inpatient PPS hospitals, CAHs and PPS-exempt cancer hospitals follows. The AHA will issue a separate advisory on the LTCH PPS-related proposals. Additionally, the AHA issued a&nbsp;<a href="/advisory/2025-05-07-fy-2026-transforming-episode-accountability-model-proposed-rule" target="_blank" title="TEAM Advisory">separate advisory</a> on the proposed Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model.The rule proposes a net 2.4% increase for inpatient PPS payments in FY 2026. This update reflects a hospital market basket increase of 3.2% and a productivity cut of 0.8 percentage points. It would increase hospital payments by $4 billion total in FY 2026 as compared to FY 2025. This includes a proposed $1.5 billion increase in disproportionate share hospital (DSH) payments and a proposed $234 million increase in new technology add-on payments.In addition, CMS has included in the rule its previously published <a href="https://www.cms.gov/medicare-regulatory-relief-rfi" target="_blank" title="Request for Information web site">request for information</a> seeking input on opportunities to streamline regulations and reduce burdens on providers.&nbsp;<div class="panel module-typeC"><div class="panel-heading">KEY HIGHLIGHTSCMS’ proposed policies would:<ul><li>Increase inpatient PPS payment rates by a net 2.4% in FY 2026.</li><li>Discontinue the low-wage index hospital policy for FY 2026 and beyond.</li><li>Add seven new <a>MS-DRGs&nbsp;</a>and delete six MS-DRGs.</li><li>Remove four measures from the inpatient quality reporting program focused on health equity and COVID-19 vaccination for health care personnel.</li><li>Include Medicare Advantage patients in the calculation of multiple claims-based measures across several programs.</li><li>Shorten the Hospital Readmission Reduction Program’s performance period from three to two years.</li></ul></div></div><h2><a>AHA TAKE</a></h2>The AHA welcomes CMS’ interest in regulatory relief, including its focus on streamlining quality measurement efforts. However, we are disappointed by CMS’ proposed inpatient hospital&nbsp;payment update of 2.4%, including an extremely high proposed productivity cut of 0.8 percentage points. We are very concerned that this update would hurt hospitals’ ability to care for their communities. Indeed, many hospitals across the country, especially those in rural and underserved communities, already operate under unsustainable financial situations, including negative margins. We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high quality, around-the-clock, essential care for their patients and communities. See the AHA’s full statement on the rule&nbsp;<a href="/press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule" target="_blank" title="AHA Statement on the Final Rule">here</a>.<h2>WHAT YOU CAN DO</h2><ul><li>Listen to an AHA member-only webinar held April 28&nbsp;to hear a summary of this regulation. Access the recording for this 60-minute webinar&nbsp;<a href="/2025-04-30-fy-2026-inpatient-prospective-payment-system-proposed-rule-member-webinar" target="_blank" title="AHA Member Only Webinar">here</a>.</li><li>Share this advisory with your senior management team and ask your chief financial officer to examine the impact of the proposed payment changes on your Medicare revenue for FY 2026.</li><li>Verify the CMS&nbsp;<a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/acute-inpatient-pps/fy-2025-ipps-proposed-rule-home-page" target="_blank" title="CMS table listing the factor used to calculate uncompensated care payments for DSH">table</a> listing the factor used to calculate uncompensated care payments for DSH.&nbsp;Hospitals have until June 10 to review this table and notify CMS in writing of any inaccuracies.</li><li>Verify that you have attested to meaningful use.&nbsp;Attestation status can be determined through the CMS&nbsp;<a href="http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/RegistrationandAttestation.html" target="_blank" title="CMS website for Attestaation">website</a>.</li><li>Share this advisory with your billing, medical records, quality improvement and compliance departments, as well as your clinical leadership team — including the quality improvement committee and infection control officer — to apprise them of the proposals around the DRGs and quality measurement requirements.</li><li>Submit comments to CMS with your specific concerns by June 10 at&nbsp;<a href="http://www.regulations.gov" target="_blank" title="CMS website to submit comment">www.regulations.gov</a>.&nbsp;The final rule will be published on or around Aug. 1 and take effect Oct. 1.</li></ul>View the detailed Regulatory Advisory Below.</div><div class="col-md-4"><a href="/system/files/media/file/2025/05/inpatient-pps-proposed-rule-for-fy-2026-advisory-5-7-2025.pdf"><img src="/sites/default/files/2025-05/cover-inpatient-pps-proposed-rule-for-fy-2026-advisory-5-7-2025.png" data-entity-uuid data-entity-type="file" width="NaN" height="NaN"></a></div></div></div> Wed, 07 May 2025 11:13:33 -0500 Inpatient Prospective Payment Systems (IPPS) FY 2026 Inpatient Prospective Payment System Proposed Rule Member Webinar This webinar reviews key provisions proposed in the<a href="/inpatient-pps"> FY 2026 Inpatient PPS proposed rule,</a> presented by AHA policy staff members Shannon Wu, Tammy Love, and Akin Demehin. Topics include proposals related to Medicare disproportionate share hospitals, Medicare-severity diagnosis-related group changes, area wage index changes, promoting interoperability programs, and quality reporting programs, among others.Members can view the <a href="https://aha-org.zoom.us/rec/share/BdcIVwSnEYv07Ya1j1pAnLKz4thBpQZscT-GsMgVUtQRK0gZeInrmszq4lNBlUx4.lvUXrjf1DgGZy6JD?startTime=1745859557000">recording of the session</a> and download slides below for further review. Wed, 30 Apr 2025 09:44:08 -0500 Inpatient Prospective Payment Systems (IPPS) CMS Releases Hospital Inpatient PPS Proposed Rule for Fiscal Year 2026 <div class="container"><div class="row"><div class="col-md-8">The Centers for Medicare &amp; Medicaid Services (CMS) April 11 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/public-inspection/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the">proposed rule</a> for fiscal year (FY) 2026. This Regulatory Advisory contains highlights of proposals related to the inpatient PPS as well as the Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model. LTCH PPS provisions are covered in a separate advisory.The rule proposes a net 2.4% increase for inpatient PPS payments in FY 2026. This update reflects a hospital market basket increase of 3.2% and a productivity cut of 0.8%. It would increase hospital payments by $4 billion, including a proposed $1.5 billion increase in disproportionate share hospital payments and a proposed $234 million increase in new technology add-on payments. Overall, it would increase hospital payments by $4 billion in FY 2026 as compared to FY 2025.In addition, CMS has included in the rule its previously published request for information (RFI) seeking input on opportunities to streamline regulations and reduce burdens on providers.&nbsp;<div class="panel module-typeC"><div class="panel-heading">Key highlightsCMS’ proposed policies would:<ul><li>Increase inpatient PPS payment rates by a net 2.4% in FY 2026.</li><li>Make minor changes to the mandatory TEAM, including adding a new quality measure and deferring participation for new hospitals.</li><li>Seek input on a low-volume threshold policy for TEAM.</li><li>Discontinue the low-wage index hospital policy for FY 2026.</li><li>Add seven new MS-DRGs and delete six MS-DRGs.</li><li>Remove four measures from the inpatient quality reporting program focused on health equity and COVID-19 vaccination for health care personnel.</li><li>Include Medicare Advantage patients in the calculation of multiple claims-based measures across several programs.</li><li>Shorten the Hospital Readmission Reduction Program’s performance period from three to two years.</li></ul></div></div><h2>AHA Take</h2>The AHA welcomes CMS’ interest in regulatory relief, including its focus on streamlining quality measurement efforts. However, we are disappointed by CMS’ proposed inpatient hospital&nbsp;payment update of 2.4%, including an extremely high proposed productivity cut of 0.8%. We are very concerned that this update will hurt our ability to care for our communities. Indeed, many hospitals across the country, especially those in rural and underserved communities, already operate under unsustainable financial situations, including negative margins. We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high-quality, around-the-clock, essential care for their patients and communitiesAdditionally, we appreciate that CMS continues to gather stakeholder feedback and make modifications to the TEAM. The AHA has long supported the adoption of value-based and alternative payment models to deliver high-quality care at lower costs; however, we are concerned that TEAM, even with the proposed changes, may force some hospitals to assume more risk than they can manage, threatening their ability to maintain access to quality care. Thus, we continue to urge the agency to make TEAM voluntary. We are also concerned that the lack of a low-volume threshold will put at particular risk many hospitals that are not of adequate size or in a position to support the investments necessary to succeed.&nbsp;See AHA’s&nbsp;<a href="/press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule">full statement</a> that was shared with the media.Highlights of the rule follow.</div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-releases-hospital-inpatient-pps-proposed-rule-for-fiscal-year-2026-advisory-4-14-2026-r2.pdf" target="_blank" title="CMS Releases Hospital Inpatient PPS Proposed Rule for Fiscal ear 2026"><img src="/sites/default/files/2025-04/cover-cms-releases-hospital-inpatient-pps-proposed-rule-for-fiscal-year-2026-advisory-4-14-2025-r2.png" data-entity-uuid data-entity-type="file" alt="Cover Image of Hospital Inpatient PPS Advisory" width="640" height="828"></a></div></div></div> Mon, 14 Apr 2025 16:17:14 -0500 Inpatient Prospective Payment Systems (IPPS) AHA Statement on FY 2026 Proposed IPPS & LTCH Payment Rule /press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule Ashley Thompson Senior Vice President, Public Policy Analysis and Development �� AssociationApril 11, 2025America’s hospitals and health systems spend too many resources each year on regulatory requirements, forcing many of our clinicians to focus more time completing paperwork than treating patients. The AHA appreciates the Administration’s request for information on&nbsp;approaches and opportunities to streamline regulations and reduce burdens in the Medicare program. We particularly welcome the agency’s emphasis on ways to streamline and focus quality measurement efforts, including by proposing to eliminate the outdated reporting related to staff vaccination rates. We&nbsp;look forward to sharing our ideas and working closely with CMS to further cut down on excessive administrative red tape.However, we are disappointed to see that the agency proposed an inadequate inpatient hospital payment update of 2.4%, including of particular concern an extremely high proposed productivity cut of 0.8%. We are very concerned that this update will hurt our ability to care for our communities. Indeed, many hospitals across the country, especially those in rural and underserved communities, already operate under unsustainable financial situations, including negative margins. We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high-quality, around-the-clock, essential care for their patients and communities.Additionally, we appreciate that CMS continues to gather stakeholder feedback and make modifications to the Transforming Episode Accountability Model (TEAM). The AHA has long supported the adoption of value-based and alternative payment models to deliver high-quality care at lower costs; however, we are concerned that TEAM, even with the proposed changes, may force some hospitals to assume more risk than they can manage, threatening their ability to maintain access to quality care.&nbsp;Thus, we continue to urge the agency to make TEAM voluntary.Finally, the AHA is concerned that the proposed payment updates for long-term care hospitals (LTCHs) would lead to continued strain on these providers as they care for some of Medicare’s sickest patients. In recent years, the outlier threshold has skyrocketed, forcing LTCHs to absorb tens of thousands of additional dollars in losses before Medicare will help cover some costs of extremely ill beneficiaries. CMS’ proposal this year to increase this threshold even more — by an additional $14,199 — coupled with its minimal proposed market basket update, would make it increasingly difficult for LTCHs to care for these patients and alleviate pressure on their acute-care hospital partners. The AHA looks forward to working with CMS to ensure continued access for these patients.### Mon, 14 Apr 2025 08:41:37 -0500 Inpatient Prospective Payment Systems (IPPS) CMS issues hospital IPPS proposed rule for FY 2026 /news/headline/2025-04-11-cms-issues-hospital-ipps-proposed-rule-fy-2026 The Centers for Medicare &amp; Medicaid Services April 11 issued a <a href="https://www.federalregister.gov/public-inspection/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the">proposed rule</a> that would increase Medicare inpatient prospective payment system rates by a net 2.4% in fiscal year 2026, compared with FY 2025, for hospitals that are meaningful users of electronic health records and submit quality measure data.&nbsp; This 2.4% payment update reflects a hospital market basket increase of 3.2% as well as a productivity cut of 0.8%. This update also reflects CMS’ proposal to rebase and revise the market basket to a 2023 base year. In addition, the rule includes a proposed $1.5 billion increase in disproportionate share hospital payments and a proposed $234 million increase in new medical technology payments. Overall, it would increase hospital payments by $4 billion in FY 2026 as compared to FY 2025. &nbsp; In addition, CMS has included in the rule its previously published request for information seeking input on opportunities to streamline regulations and reduce burdens on providers.&nbsp; In a statement shared with the media today, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “America’s hospitals and health systems spend too many resources each year on regulatory requirements, forcing many of our clinicians to focus more time completing paperwork than treating patients. The AHA appreciates the Administration’s request for information on approaches and opportunities to streamline regulations and reduce burdens in the Medicare program. We particularly welcome the agency’s focus on ways to streamline and focus quality measurement efforts, including by proposing to eliminate the outdated reporting related to staff vaccination rates. We look forward to sharing our ideas and working closely with CMS to further cut down on excessive administrative red tape.&nbsp; “However, we are disappointed to see that the agency proposed an inadequate inpatient hospital payment update of 2.4%, including of particular concern an extremely high proposed productivity cut of 0.8%. We are very concerned that this update will hurt our ability to care for our communities. Indeed, many hospitals across the country, especially those in rural and underserved communities, already operate under unsustainable financial situations, including negative margins. We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high-quality, around-the-clock, essential care for their patients and communities.&nbsp; “Additionally, we appreciate that CMS continues to gather stakeholder feedback and make modifications to the Transforming Episode Accountability Model (TEAM). The AHA has long supported the adoption of value-based and alternative payment models to deliver high-quality care at lower costs; however, we are concerned that TEAM, even with the proposed changes, may force some hospitals to assume more risk than they can manage, threatening their ability to maintain access to quality care. Thus, we continue to urge the agency to make TEAM voluntary.” &nbsp; Among other provisions, the proposed rule would continue the mandatory TEAM payment model that would provide bundled payment for certain surgical procedures, with limited deferment for certain hospitals. In addition, it would make modifications to the quality measure aspect of the model and remove health equity plans from the model, among other changes. CMS is seeking comments but did not provide proposals on certain issues like low-volume thresholds. Furthermore, CMS would discontinue the low-wage index hospital policy for FY 2026 and establish a transitional exception policy for hospitals significantly impacted by the discontinuation.&nbsp; Finally, CMS proposes a number of changes to its quality reporting and value programs. Among other updates, CMS would remove four measures from the inpatient quality reporting program and modify several others. The agency also proposes to include Medicare Advantage patients in calculating hospital performance in the Hospital Readmission Reduction Program. Lastly, CMS proposes to update its extraordinary circumstances exception policy to allow for reporting extensions in addition to outright exemptions.&nbsp; CMS will accept comments on the proposed rule through June 10. AHA members will receive a Regulatory Advisory with further details on the rule.&nbsp; Fri, 11 Apr 2025 18:01:46 -0500 Inpatient Prospective Payment Systems (IPPS)