this is the default page template
The Centers for Medicare & Medicaid Services (CMS) issued its
hospital Inpatient Prospective Payment System (IPPS) final rule. The
rule finalizes a net 2.9% increase for inpatient payments in FY 2025. Additionally, the rule establishes a new mandatory TEAM model that will provide bundled payment for five surgical procedures and makes permanent a Condition of Participation (CoP) requiring hospitals and Critical Access Hospitals (CAHs) to report data on acute respiratory illnesses. Below are additional policies that were finalized.
The New Transforming Episode Accountability Model (TEAM)
The new
TEAM model is a five-year, mandatory, episode-based payment model that will start in January 2026. For a list of the mandatory CBAs selected for participation, click
here. TEAM requires selected acute care hospitals to coordinate care for traditional Medicare patients undergoing surgical procedures and assume responsibility for the cost and quality of their care for the first 30 days after leaving the hospital. Lower joint replacements, spinal fusions and surgical hip femur fracture treatment are included in the model.
Hospital Quality Reporting Programs
CMS moved to finalize its proposal to adopt seven new measures into the Inpatient Quality Reporting (IQR) program:
- Patient Safety Structural Measure – Will require hospitals to report whether they are implementing 25 CMS-specified patient safety-related practices.
- Age-friendly Hospital Structural Measure – Will require hospitals to report whether they are implementing 10 CMS-specified practices related to the care of older adults.
- Failure-to-Rescue, a Medicare claims-based measure reflecting 30-day death rates among surgical patients with complications.
- Two hospital harm electronic Clinical Quality Measures (eCQMs) that are calculated using Electronic Health Records (EHRs) — Falls With Injury And Post-Operative Respiratory Failure.
- Two Health care Associated Infection (HAI) measures assessing the rates of central-line associated bloodstream infections and catheter-associated urinary tract infections (CAUTIs) for inpatient oncology units.
Additionally, CMS removed four condition-specific hospital risk-standardized payment measures due to their overlap with the
Medicare Spending per Beneficiary measure and the
Patient Safety Indicator-04 because of its similarity to the
Failure-to-Rescue measure.
New CoP on Respiratory Illness
Beginning on November 1
st, CMS will require hospitals and CAHs to report data once per
week on confirmed infections of COVID-19, influenza and respiratory syntactical virus
among hospitalized patients, hospital capacity and limited patient demographic
information, including age. CMS didn’t finalize the policy requiring additional reporting if the Secretary of HHS determines that an event is “significantly likely” to become a public health emergency for an infectious disease.
Payment for Medicine Buffer Stocks
CMS is finalizing a separate payment under the IPPS for small, independent hospitals to establish and maintain a buffer stock of essential medicines. While this policy doesn’t impact hospitals that are part of a health system, the agency is interested in expanding this policy in the future.
Resources for Treating Patients with Inadequate Housing
CMS is finalizing the proposal to change the severity designation of the seven ICD-10-CM diagnosis codes that describe inadequate housing and housing instability from non-complication or comorbidity (NonCC) to complication or comorbidity (CC). This would result in higher payments.
