In August, CMS published the final Medicare Inpatient Prospective Payment rule for the federal fiscal year 2024. Most changes announced in the proposed rule were adopted and several are significant, including: Disproportionate Share Hospitals payment cuts; and a Rural Wage Index recalculation with diverse impacts. In this blog, we’ll cover these updates, the IPPS rule's total payment increase and how CMS continues to prioritize health equity in its rulemaking. The most significant IPPS final rule impacts 1. DSH UCC pool payment cuts For FFY 2024, DSH uncompensated care pool payments will decrease by $595 million due to decreased funding projections and a big adjustment to Factor 2 (see below), even though the DSH methodology is the same. This means DSH hospitals will need to find a way to recoup these losses, a challenge given the disadvantaged areas where they operate. If Affordable Care Act Marketplace plan enrollment continues to increase, Factor 2 cuts will continue. DSH UCC...

The Hospital Inpatient Prospective Payment System proposed rule for federal fiscal year 2024 includes a change to the rural wage index calculation that has the industry buzzing because it would affect all hospitals – rural and non-rural alike. If finalized, CMS will calculate each state’s RWI with data from rural hospitals and reclassified hospitals, even if those facilities are not rural geographically. As HealthLeaders notes , CMS’ approach since FFY 2020 has been to exclude reclassified hospitals from the rural floor calculation if they were not physically rural. Why the change? Who stands to lose or gain? And what other changes should hospitals watch for? What is the rural wage index? With the FFY 2024 rule, CMS proposes to reverse its exclusion of hospitals redesignated as rural from the RWI calculation. DataGen Senior Healthcare Data and Policy Analyst Jacob Orsini notes that hospitals can reclassify if they are either near a rural area or have a patient population with enough...