The AAMC submitted comments on Nov. 27 (PDF) to the Centers for Medicare & Medicaid (CMS) in response to a Fiscal Year (FY) 2025 Inpatient Prospective Payment System (IPPS) interim final rule. The interim final rule was released to address changes to the low wage index policy and the associated budget neutrality adjustment following a recent court decision invalidating the policy [refer to Washington Highlights, Oct. 4]. The low wage index policy directly raised the wage index of the lowest quartile wage index hospitals by half the difference between the 25th percentile wage index value and the hospital’s individual wage index. However, the low wage index policy did so at the expense of all hospitals nationwide, due to the associated budget neutrality adjustment, which lowered payment for all hospitals.
In its comments, the AAMC welcomed the removal of the associated budget neutrality adjustment for FY 2025. However, the association continued to urge the CMS to explore new policy options in future rulemaking that bolster low wage index hospitals without harming the financial standing of other hospitals. Additionally, the AAMC requested that if the CMS were to be tasked with crafting a remedy for implementation of the policy in previous years, that the agency not require low wage hospitals to refund payments received based on the agency’s regulatory changes later found to be inconsistent with the law.