Health equity, paying for quality outcomes the focus of 2024 IPPS final rule

By Brian Murphy


CMS released the 2024 IPPS final rule Tuesday August 1. I covered the proposed rule when it was released back in April and as near as I can tell all its proposals were finalized. The emphasis is on health equity, measuring and paying for quality outcomes, and a little on bringing Medicare Advantage into the fold.


Here are some highlights. 


Homelessness (if documented/coded) will now be reimbursed as CCs. These include:

  • Z59.00 Homelessness unspecified
  • Z59.01 Sheltered homelessness
  • Z59.02 Unsheltered homelessness


18 MCCs added, too many to list in full but a few of note:


  • A41.54, Sepsis due to Acinetobacter baumannii
  • I21.B, Myocardial infarction with coronary microvascular dysfunction
  • J15.61, Pneumonia due to Acinetobacter baumannii
  • J15.69, Pneumonia due to other Gram-negative bacteria
  • O90.41, Hepatorenal syndrome following labor and delivery
  • O90.49, Other postpartum acute kidney failure
  • R40.2A, Nontraumatic coma due to underlying condition
  • Several in the sickle cell (D57) and acute appendicitis (K35) code ranges. See table 6I.1 in the link below.


Three MCC deletions, including J15.6, Pneumonia due to other Gram-negative bacteria.


Addition of three new electronic clinical quality measures (eCQMs); these are quality data reporting programs incentivized with use of a stick. Failure to report the data results in IPPS payment reduction. The new eCQMs include:


  • Hospital Harm — Pressure Injury
  • Hospital Harm — Acute Kidney Injury
  • Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in Adults (Hospital Level — Inpatient) 


Expansion of two additional measures (Hybrid Hospital-Wide All-Cause Risk Standardized Mortality measure, Hybrid Hospital-Wide All-Cause Readmission measure) to include Medicare Advantage (MA) admissions starting with FY 2027 payment determinations.


CMS did not bend to the critiques levied by the American Hospital Association (AHA) and is continuing with the Hospital-Acquired Condition (HAC) Reduction Program with just some minor tweaks, as well as the Hospital Readmissions Reduction Program (HRRP). Both are value-based purchasing programs that reduce payments to hospitals that rank in the bottom quartile for HACs, or suffer from excess readmissions, respectively. During the comment period the AHA criticized the HAC Reduction Program for unfairly penalizing teaching hospitals, large hospitals, small hospitals and hospitals caring for structurally marginalized communities.


CMS also pushed forward with the addition of Severe Sepsis and Septic Shock Management Bundle (SEP-1), adding this to the HVBP’s safety domain in FY 2026. The AHA had disagreed with the proposal, citing no evidence of improved outcomes with the use of SEP-1.


CMS moved to adopt substantive measure modifications to the Hospital-level Risk-Standardized Complication Rate Following Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty, adding additional mechanical complication ICD-10 codes to the measure, beginning with the FY 2030 program year.


One noteworthy difference from proposed to final: a 3.1% increase in payment rate, up from a proposed 2.8%. This will boost hospital payments by $2.2 billion, according to CMS, but not nearly enough in the eyes of the AHA who have called the increase “deeply concerning” and “not commensurate with the near decades-high inflation and increased costs for labor, equipment, drugs and supplies that hospitals across the country are experiencing.”


Resources/for further reading


Final rule in full: 


All tables including full list of CC/MCC additions, deletions: 


CMS summary fact sheet: 

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