FFY 2024 IPPS Final Rule: Request for Information on Safety Net Hospitals

The FFY 2024 IPPS Proposed Rule included a request to respond to 17 questions concerning challenges faced by safety net hospitals, and potential approaches to help safety net hospitals meet those challenges. In the Proposed Rule, CMS cited recent MedPAC recommendations to Congress⁵ to establish a hospital Medicare Safety-Net Index (MSNI) that measures the following three variables:

• Medicare Low-Income Subsidy (LIS) Enrollment Ratio – Medicare dually eligible discharges (full or partial Medicaid benefits) + Part D low-income subsidy (LIS)⁶ recipients. This population is then compared to the total number of Medicare inpatient discharges for the LIS ratio.
• Ratio of Uncompensated Care Costs to Total Operating Revenue
• Medicare share of Total Inpatient Days

Additionally, for FFY 2024, MedPAC recommends Congress should: 

• Begin a transition to redistribute disproportionate share hospital and uncompensated care payments through the MSNI;
• Add $2 billion to the MSNI pool;
• Scale fee-for-service MSNI payments in proportion to each hospital’s MSNI and distribute the funds through a percentage add-on to payments under the inpatient and outpatient prospective payment systems; and
• Pay commensurate MSNI amounts for services furnished to Medicare Advantage (MA) enrollees directly to hospitals and exclude them from MA benchmarks.

In the FFY 2024 IPPS Final Rule, CMS acknowledges receipt of many thoughtful comments, and that the Agency is “expeditiously conducting an in-depth review of the comments we received ...to inform and guide our future rulemaking and other actions in this area.” 

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For more information, please contact Fred Fisher at fred.fisher@toyonassociates.com.

⁵ MedPAC Report to Congress March 2023, MedPAC Report to Congress June 2022

⁶ Limited assets and an income below 150 percent of the Federal poverty level