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FY 2024 Final IPPS Rules Published

In April of this year, the FY 2024 Proposed IPPS Rulings brought forth several adjustments that would beneficially impact the Graduate Medical Education (GME) industry. In early August, the FY 2024 Final IPPS Rulings were published, implementing much of what was proposed.

The full text of the 2024 IPPS Final Ruling can be found here. The official document is scheduled to be published on 8/28/2023.

Germane Solutions previously published, FY 2024 IPPS GME Update, outlining the proposed rulings that would impact Graduate Medical Education in May. The summary below reflects these same topics as finalized in the FY 2024 Final IPPS rulings:

o Rural Emergency Hospitals (REHs) will now be given the same option to be considered a “non-provider” site, which will provide the same financial opportunities previously afforded to Critical Access Hospitals (CAHs). That is, time spent training at REH’s can be claimed as IME and DGME FTEs at the main-training hospital.

o In the FY 2007 IPPS/LTCH PPS final rule, CMS established a rule that hospitals reclassified as rural under § 412.103 are also considered rural under the capital IPPS for purposes of determining eligibility for capital DSH payments. This prevented those hospitals from receiving capital DSH payments. However, CMS has confirmed in the FY 2024 IPPS Final Rules that effective for discharges occurring on or after October 1, 2023, hospitals reclassified as rural under § 412.103 will no longer be subject to the loss of capital DSH payments. In short, this will reduce the initial cost for hospitals pursuing a rural designation strategy.

o CMS is revising the policy to which the rural floor is the same as the rural wage index. Hospitals reclassified under §412.103 will no longer be affected by the previous policies, as they will now be included in the calculation of the rural floor. This benefits geographically rural hospitals as the rurally designated hospitals will now be included in the rural floor calculation.

  • This update reflects a dramatic reduction in the number of different wage index values to be paid for each state. CMS has estimated that 646 hospitals will be paid at the rural floor in FY 2024.

o The Medicare Cost Report (MCR) E Part A – Line 20 instructions will be revised to more clearly indicate how the calculations are performed for the Prior Year Resident-to-bed Ratio. This ratio may be adjusted to properly reflect an increase in the current cost reporting period's resident-to-bed ratio due to residents in a new GME program or new Rural Track Program, an MGMEAA, or due to residents displaced by the closure of a hospital or residency program.

o The percent reduction to MA DGME Payments will be 3.27% for FY 2024. This relatively low reduction factor will produce higher DGME payments for the GME industry.



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