CMS Releases FY 2024 IPPS Final Rule: Review Payment Changes Here
CMS Releases FY 2024 IPPS Final Rule: Review Payment Changes Here
CMS released the final rule for IPPS on August 1, 2023. The 2024 IPPS Final Rule discusses overall adjustments to IPPS and updates to MS-DRGs, New Technology Add-on Payments (NTAP), and many other changes. The rule includes tables with the finalized lists of new, revised, and deleted ICD-10-CM and ICD-10-PCS codes.
CMS Fact Sheet Outlines 2024 IPPS Final Rule Changes and Payment Updates

CMS’ fact sheet provides a synopsis of many of the changes. General acute care hospitals reimbursed under the IPPS, successfully participate in the Hospital Inpatient Quality Reporting program, and are meaningful-use EHR users will see a 3.1% increase in operating payment rates. FY 2024 hospital payments are expected to rise by $2.2 billion due to the higher operating and capital IPPS payment rates.
These adjustments were less than anticipated by the hospital industry. The American Hospital Association (AHA) called the increases, along with other financial changes, “woefully inadequate.”
Social Determinants of Health (SDOH) Diagnosis Codes
Three ICD-10-CM diagnosis codes for homelessness (Z59.00 (Homelessness, unspecified), Z59.01 (Sheltered homelessness), and Z59.02 (Unsheltered homelessness)) have had their severity level designation changed from non-complication or comorbidity (NonCC) to complication or comorbidity (CC). This is based on the higher average resource costs of cases with these diagnosis codes and is consistent with the Administration’s goal of advancing health equity to all, as described in Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.”
Of note, CMS states that as SDOH diagnosis codes are increasingly added to billed claims, they plan to continue to analyze the effects of SDOH on the severity of illness, complexity of services, and consumption of resources.
Changes to COVID-19 Treatments Add-on Payment (NCTAP)
As the Public Health Emergency ended on May 11, 2023, the NCTAP for eligible discharges was extended to the end of this fiscal year. As of October 1, 2023, the NCTAP will expire, and all discharges on or after this date will no longer be eligible for NCTAP.
New Technology Add-On Payments (NTAP)
Changes to the application process for NTAP payments were finalized. There is a requirement that NTAP applicants who still need to be FDA market authorized must have a complete and accurate authorization application request when applying for NTAP. The FDA approval deadline was moved from July 1 to May 1 for FY 2025.
The rule details the continuation of NTAP payments of 11 technologies still considered new and the discontinuation of 15 technologies no longer considered new for FY 2024. Eight new applications for NTAP were approved and are detailed in the rule.
MS-DRG Changes
MS-DRGs were analyzed, and their changes are detailed in the final rule. Some new MS-DRGs were added, such as MS-DRG 173 (Ultrasound Accelerated and Other Thrombolysis with Principal Diagnosis Pulmonary Embolism). Other MS-DRGs were deleted, with some MS-DRG titles revised.
Also, implementation of the “three-way split criteria” for MS-DRGs has been further delayed until FY 2025 or later to allow for more analysis.
More Details in the 2024 IPPS Final Rule and YES Update Presentation
The Final Rule is over 2,000 pages long and includes a synopsis of comments received on all provisions from the Proposed Rule and a description of the final decisions. The final rule provides details on initiatives such as hospital inpatient quality reporting (IQR), Hospital Readmissions Reduction Program (HRRP), the Hospital-Acquired Condition (HAC) Reduction Program, the Hospital Value-Based Purchasing Program (VBP), and Long-Term Care (LTCH) prospective payment provisions. See the Final Rule for more information on these and other programs.
YES HIM Consulting will have detailed information on all the IPPS changes for FY 2024 that affect healthcare organizations, hospitals, and HIM practices. Enroll in our 2024 IPPS and MS-DRG Update course here.
Additional ICD-10 Updates
