2024 IPPS proposed rule: CMS mulls payment updates, codes changes

Wednesday, April 12, 2023

CMS is proposing a 2.8% payment increase to hospitals for fiscal year (FY) 2024, potentially increasing hospital payments by $3.3 billion, according to the FY 2024 Inpatient Prospective Payment System (IPPS) proposed rule. However, disproportionate share (DSH) hospitals could be facing a payment cut of $115 million.

Released April 10, the proposed rule also covers ICD-10-CM/PCS coding updates, changes for rural emergency hospitals, reimbursement for COVID-19 treatments, and numerous quality and reporting programs.

Social determinants of health (SDoH) code changes

Currently, ICD-10-CM codes Z59.00 (homelessness, unspecified), Z59.01 (sheltered homelessness), and Z59.02 (unsheltered homelessness) are classified as non-complications/comorbidities (CC). However, CMS’ data shows that these three codes are associated with increased use of hospital resources, according to the proposed rule.

These patients face challenges associated with safe discharges, for example, which often results in longer lengths of stay. They are also often unable to seek care at early stages of illness, leading to more complex symptoms and worse outcomes when they do receive care. These patients are also often unable to access prescription medication and are more likely to be exposed to communicable diseases, extreme climate conditions, and are more likely to be affected by mental health and substance use disorder diagnoses.

Based on this data, CMS is proposing to classify Z59.00, Z59.01, and Z59.02 as CCs. The agency also noted that it may consider changes for other SDoH codes in future rulemaking and that it expects reporting of Z59.00, Z59.01, and Z59.02 to increase. The agency is requesting feedback on how to encourage documentation and coding of SDoHs.

New technology proposals

CMS is considering 19 applications for new technology add-on payments (NTAP) under the traditional pathway and 20 for the alternative pathway for FY 2024. All NTAP applications for FY 2024 are publicly available here.

CMS is proposing to change the FDA approval deadline for NTAP applications from July 1 to May 1. According to the proposed rule, this would help the agency better process the increasing volume of NTAP applications.

In 2020, CMS created the new COVID-19 treatments add-on payment (NCTAP) to allow for additional payment for eligible hospital inpatient and outpatient cases that involve certain new products or treatments authorized or approved for COVID-19. For hospital inpatient discharges occurring on or after November 2, 2020, the enhanced payment is the lesser of:

  • 65% of the operating outlier threshold for the claim
  • 65% of the cost of a COVID-19 stay beyond the operating Medicare payment, including the 20% add-on payment under section 3710 of the CARES Act


According to the FY 2022 IPPS final rule, NCTAP will expire at the end of the FY in which the COVID-19 public health emergency (PHE) ends. With the PHE currently set to expire May 11, NCTAP will end on September 30 and discharges on or after October 1 would not be eligible for this additional payment, according to the 2024 IPPS proposed rule.


Revenue integrity professionals should review the proposed rule. Identify the sections that are most pertinent to your organization and which would directly impact your job duties. Analyze specific proposals’ potential impact on reimbursement and workflows. Reach out to colleagues in other departments to discuss changes that could have cross-functional impact and ensure that staff in your department are aware of the proposed changes.

Consider leaving feedback, due by June 9, on CMS’ proposals. For tips on writing and submitting comments and the importance of providing feedback to CMS, see NAHRI’s position paper Advocacy in Action: Commenting on Proposed Rules.