The Centers for Medicare and Medicaid Services (CMS) released the Fiscal Year (FY) 2025 Inpatient Prospective Payment System (IPPS) proposed rule, proposing a 2.6% increase in operating payment rates for applicable hospitals. This represents a 3% projected increase in the hospital market basket update with a projected 0.4% productivity adjustment reduction. 

Highlights from the proposed rule include a strong focus on health equity by incentivizing care for the unhoused, encouraging emergency preparedness by incentivizing stock piling commonly used medicines, and improving maternal health. The rule would also test innovative methods to better streamline care at lower costs through the proposed mandatory episode-based payment program: Transforming Episode Accountability Model (TEAM).

Slated to begin Jan. 1, 2026, TEAM would require all acute care hospitals located within the CMS-selected Core-Based Statistical Areas to participate by testing episode-based payments for CABG and several other orthopedic and surgical procedures, including lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion and major bowel procedure.

Participating hospitals would receive a target price to cover all costs associated with a 30-day episode of care and then be required to refer patients to primary care services to support continuity of care and drive positive long-term health outcomes.

This proposal – developed by lessons learned from the Bundled Payments for Care Improvement Advanced and Comprehensive Care for Joint Replacement models – was expected based on comments from Center for Medicare and Medicaid Innovation Director Elizabeth Fowler, PhD, JD, at ACC’s 2023 Value-Based Care in Cardiology Forum.

Other items from the proposed rule relevant to cardiovascular care include:

• Creation of a new Medicare Severity Diagnosis Related Groups (MS-DRG) for concomitant left atrial appendage and cardiac ablation procedures.
• Reassignment of BaroStim for heart failure (HF) to a new MS-DRG.
• Updated timeline for aspects of the new technology add-on payments.
• Removal of cost measures for acute myocardial infarction and HF from the Inpatient Quality Reporting system.

ACC Advocacy staff are reviewing the proposed rule to identify any additional topics of interest to ACC members and will submit formal comments to the agency by the June 10 deadline. For more information, access the CMS press release, fact sheet and TEAM webpage.