McDermottPlus Check-Up: August 4, 2023 - McDermott+Consulting

McDermottPlus Check-Up: August 4, 2023


Congress is officially in recess for the month of August and will return after Labor Day. On the regulatory front, the Centers for Medicare & Medicaid Services (CMS) released the final fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) rule, announced a Medicare Dementia Care Model, and released 2024 Medicare Part D premium and bid information.


CMS Publishes Final IPPS/LTCH Rule. On August 1, CMS issued the FY 2024 Medicare Hospital IPPS and Long-Term Care Hospital (LTCH) Prospective Payment System final rule. In the rule, CMS finalized an increase of 3.1% in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting Program and are meaningful electronic health record users.

CMS will distribute roughly $5.94 billion in uncompensated care payment to eligible disproportionate share hospitals (DSH) for FY 2024. CMS also finalized the Medicare DSH Payments: Counting Certain Days Associated with Section 1115 Demonstrations in the Medicaid Fraction proposed rule. This rule changes how Medicare DSH payments are calculated with respect to the counting of days associated with Section 1115 demonstrations in the Medicaid fraction of the DSH calculation. This change may have a negative financial impact on hospitals in states that utilize uncompensated care pools and premium assistance programs through 1115 waivers, and could impact 340B program eligibility.

With respect to quality reporting programs, CMS finalized proposals to make health equity adjustments in the Hospital Value-Based Purchasing Program by providing incentives to those who care for high proportions of underserved individuals, as defined by dual eligibility status. CMS plans to use comments received to further address geriatric care in its quality reporting programs. The agency also finalized a proposal to modify the COVID-19 Vaccination Coverage Among Healthcare Personnel measure to replace the term “complete vaccination course” with the term “up to date” with regard to recommended COVID-19 vaccines.

CMS’s press release on the final rule can be found here, and a fact sheet can be found here. A more detailed M+ summary can be found here.

CMS Announces Medicare Dementia Care Model. On July 31, CMS announced a new voluntary nationwide model, the Guiding an Improved Dementia Experience (GUIDE) model. The GUIDE model will run for eight years, beginning on July 1, 2024, and will test an alternative payment for participants that deliver key supportive services to people with dementia, including care plans, care coordination and 24/7 access to a support line. Under the model, people with dementia and their caregivers will have access to a care navigator who will help coordinate services and support, including clinical services and non-clinical services such as meals and transportation through community-based organizations.

Participants will be Medicare Part B enrolled providers/suppliers, excluding durable medical equipment and laboratory suppliers, that are eligible to bill for Medicare Physician Fee Schedule services and agree to meet the care delivery requirements. The model will offer two tracks: one for established programs and one for new programs.

For more details, see the main GUIDE page, fact sheet, infographic and FAQ page.

A request for applications will be made available this fall, and the application deadline will be provided at that time. CMS encourages interested parties to submit non-binding letters of interest by September 15. CMS will hold a GUIDE model webinar on August 10 at 2:00 pm EDT. Register here.

CMS Releases 2024 Projected Medicare Part D Premium and Bid Information. This annual release provides information to help Part D plan sponsors finalize their offerings and help individuals understand overall Part D premium trends ahead of Medicare open enrollment. The average total Part D beneficiary premium is projected to decrease by 1.8%, from $56.49 in 2023 to $55.50 in 2024.

According to CMS, the projected Part D premium decrease is largely attributed to two factors. First, the Inflation Reduction Act (IRA) limits the growth in the base beneficiary premium (used to calculate the plan-specific basic premium) to a 6% annual increase. The IRA’s premium stabilization provision has moderated the growth in the average basic premium, which, when taken with a lower average supplemental premium, results in a lower average total premium. Second, the IRA caps annual out-of-pocket costs, limits cost-sharing for covered insulin products and eliminates cost-sharing for recommended adult vaccines in 2024. CMS’s recent rulemaking also requires Part D plans to apply the price concessions they receive from pharmacies to lower the price the beneficiary pays at the point of sale beginning in 2024.


No Surprises Act (NSA) Decision Addresses IDR Processes. On August 3, the United States District Court for the Eastern District of Texas ruled in Texas Medical Association (TMA) IV related to the implementation of the NSA.

In TMA IV, the plaintiffs challenged two things: increased administrative fee to participate in the independent dispute resolution (IDR) process, which providers asserted made participating in IDR for small-value claims cost prohibitive; and the Departments’ rules regarding batching, which providers claim makes it difficult to batch related claims for resolution in a single arbitration proceeding.

The Court found that the Departments violated the Administrative Procedure Act in both instances—when they raised the IDR administrative fee from $50 to $350 for 2023 and established batching rules that did not allow providers to batch claims together in the IDR process. The Court ruled that the changes were substantive and should have gone through notice and comment rulemaking. The Court vacated both policies nationwide.

As a result, the IDR fee will return to $50 for now. The batching rules are also vacated until the Departments go through notice and comment rulemaking, resulting in the IDR portal temporarily being suspended and no longer accepting new disputes.  The Departments are working on a proposed rule that has moved to review by the Office of Management and Budget that will likely include some batching policies and may be issued in the next few months. The Departments also have an opportunity to appeal this decision, as they did for TMA II.


  • US Department of Health and Human Services Secretary Xavier Becerra applauded the formation of the Office of Long COVID Research and Practice to lead the long COVID response and coordination across the federal government. He also praised the National Institutes of Health’s launch of long COVID clinical trials through the RECOVER Initiative, which is a $1.15 billion nationwide research program designed to understand, treat and prevent long COVID.
  • President Biden’s Cancer Moonshot announced an Advanced Research Projects Agency for Health (ARPA-H) program to develop novel technologies that will allow surgeons to remove cancerous tumors with more precision and accuracy. The launch of the Precision Surgical Interventions Program is ARPA-H’s first program targeting cancer and second program overall. The program aims to deliver groundbreaking new tools to enable surgeons to successfully remove cancer for patients through a single operation by better identifying and differentiating between healthy tissue and cancer tissue.


With Congress in recess through Labor Day, our weekly Check-Up will be taking a summer break. We will provide updates should notable developments occur during the month of August and will otherwise return to our regular publication schedule on September 8.

For more information, contact Debra CurtisKristen O’Brien, Priya Rathakrishnan or Erica Stocker.

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