CMS Releases FY 2025 Hospital Inpatient Payment Proposed Rule | Heart Rhythm Society

CMS Releases FY 2025 Hospital Inpatient Payment Proposed Rule

On April 10th, the Centers for Medicare & Medicaid Services (CMS) released the Hospital Inpatient Prospective Payment System (IPPS) proposed rule for fiscal year (FY) 2025, updating payments and policies for a variety of inpatient hospital programs and initiatives.


An increase in operating payment rates for general acute care hospitals paid under the IPPS is projected to be +2.6%, based on an estimated 3.0% market basket (inflationary) update minus a 0.4% productivity adjustment. CMS will accept comments on the proposed rule until June 10, 2024.

FY 2025 IPPS Proposed Rule Highlights

Concomitant Left Atrial Appendage Closure and Cardiac Ablation
CMS received a request to create a new MS-DRG for concomitant left atrial appendage closure (LAAC) and cardiac ablation for atrial fibrillation (AF). CMS states that "Among patients with AF, thrombus in the left atrial appendage (LAA) is a primary source for thromboembolism.

LAAC is a surgical or minimally invasive procedure to seal off the LAA to reduce the risk of embolic stroke" . The requestor (WATCHMANTM) provided the following code combination that would identify concomitant LAAC and cardiac ablation:

  • 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach)
  • 02583ZZ (Destruction of conduction mechanism, percutaneous approach)

According to current GROUPER logic, CMS stated that these concomitant procedures would be assigned to the following MS-DRGs:

  • MS-DRG 273 (Percutaneous and Other Intracardiac Procedures with MCC)
  • MS-DRG 274 (Percutaneous and Other Intracardiac Procedures without MCC)

In CMS' analysis, it expanded the list of procedure codes under review to include all LAAC procedures (rather than just a review for a single technology) and all cardiac ablation procedure codes. CMS found that "cases reporting concomitant left atrial appendage closure and cardiac ablation procedures have higher average costs and slightly longer lengths of stay compared to other cases in their assigned MS-DRG". To address this issue, CMS is proposing to create a new, single MS-DRG (MS-DRG 317 Concomitant Left Atrial Appendage Closure and Cardiac Ablation) for cases with concomitant LAAC and cardiac ablation procedures.

PulseSelect™ Pulsed Field Ablation (PFA) Loop Catheter
CMS received an application for a new technology add-on payment for the PulseSelect™ PFA Loop Catheter to perform pulmonary vein isolation in cardiac catheter ablation to treat atrial fibrillation. CMS proposes to approve the PulseSelect™ PFA Loop Catheter for new technology add-on payments for FY 2025. Based on its existing policies, CMS proposes that the maximum new technology add-on payment for a case involving the use of the PulseSelect™ PFA Loop Catheter would be $6,337.50 for FY 2025 (that is, 65% of the average cost of the technology).

Neuromodulation Device Implant for Heart Failure
CMS reviewed the BAROSTIMTM device indicated for improvement of symptoms of heart failure in a subset of patients with symptomatic New York Heart Association (NYHA) Class III or Class II (who had recent history of Class III) heart failure, with a low left ventricular ejection fraction, who do not benefit from guideline directed pharmacologic therapy or qualify for Cardiac Resynchronization Therapy (CRT).

Prior to FY 2024, device implantation was assigned to the following MS-DRGs:

  • MS-DRG 252 (Other Vascular Procedures with MCC)
  • MS-DRG 253 (Other Vascular Procedures with CC)
  • MS-DRG 254 (Other Vascular Procedures without MCC)

In FY 2024, CMS reassigned MS-DRGs for procedures involving device implantation as follows:

  • MS-DRG 275 (Cardiac Defibrillator Implant with Cardiac Catheterization and MCC)
  • MS-DRG 276 (Cardiac Defibrillator Implant with MCC)
  • MS-DRG 277 (Cardiac Defibrillator Implant without MCC)

While the BAROSTIMTM procedure is mostly performed in the outpatient setting, "a significant number of severely sick patients with multiple comorbidities (such as chronic kidney disease, end stage renal disease (ESRD), chronic obstructive pulmonary disease (COPD), and AF) are treated in an inpatient setting."In response to concerns that hospitals were preventing this predominately outpatient procedure from being performed inpatient because of under-reimbursement, CMS proposes to move these cases to an existing MS-DRG for cardiac defibrillator implants, MS-DRG 276, and change the name to "Cardiac Defibrillator Implant with MCC or Carotid Sinus Neurostimulator."

CMS Requests Input on Hospital Discharge Process
CMS requested information from stakeholders on how it might rely on quality reporting programs that already measure "unplanned patient hospital visits" to encourage hospitals to improve discharge processes. However, CMS is concerned that the measures do not comprehensively capture unplanned patient returns to inpatient or outpatient care after discharge. Furthermore, since both the Hospital Inpatient Quality Reporting IQR (IQR) and Hospital Outpatient Quality Reporting (OQR) programs are reporting rather than performance programs, a hospital's performance on these measures is not tied to payment incentives.

CMS seeks input on how the discharge process might be relied on through the quality reporting programs, such as by introducing measures currently in quality reporting programs into value-based purchasing to link outcomes to payment incentives. CMS is specifically interested in input on adopting measures which better represent the range of outcomes of interest to patients, including unplanned returns to the ED and receipt of observation services within 30 days of a patient's discharge from an inpatient stay.

New Mandatory Hospital APM for Certain Procedures
While CMS has tested a number of alternative payment models (APMs) since the introduction of the Center for Medicare and Medicaid Innovation (CMMI), it has only, in limited circumstances, attempted to implement a mandatory APM (and often retreated from those attempts).

In this year's IPPS proposed rule, CMS proposes an episode-based model that would be mandatory for most hospitals in approximately 200 geographic areas (that CMS has yet to select). For those hospitals required to participate, an episode would be triggered if one of the following procedures is performed at the participant hospital: Coronary artery bypass grafts (CABGs), lower extremity joint replacements, surgical hip femur fracture treatments, spinal fusions, and major bowel procedures.

While electrophysiologists practicing at participant hospitals are not expected to be directly affected, it is important to note CMS' desire to implement mandatory procedure-focused models. Participants would continue to submit claims as normal under fee-for-service. Prior to each performance year, participant hospitals would receive a "target price" for each 30-day episode which would be reconciled against actual performance, with gains or penalties adjusted for performance on the selected quality measures. If finalized as proposed, the first performance year is scheduled for calendar year (CY) 2026.

Membership Reminder