CMS issued an interim final rule Sept. 30 that will discontinue the hospital inpatient prospective payment system low wage index policy for fiscal 2025.
Four things to know:
1. The change comes after a federal appellate court ruling in July that found that the HHS secretary, Xavier Becerra, lacked the authority under the "adjustments" section of the statute to adopt the low wage index hospital policy and ruled that the policy and its related budget neutrality adjustment must be vacated.
2. CMS said in the interim rule: "Although we respectfully disagree with the D.C. Circuit's decision in Bridgeport Hosp. v. Becerra and continue to believe that the low wage index hospital policy and the related budget neutrality adjustment should be effective for at least three more years … we are recalculating the IPPS hospital wage index to remove the low wage index hospital policy for FY 2025. Because we are now no longer applying the low wage index hospital policy in FY 2025, we are also removing the low wage index budget neutrality factor from the FY 2025 standardized amounts."
3. The interim rule establishes a transitional payment exception for "low wage hospitals significantly impacted by those revisions."
4. A comment period on the interim rule runs through Nov. 29.