In a Sept. 30 interim final rule with comment period (PDF) on the fiscal year (FY) 2025 Inpatient Prospective Payment System (IPPS), the Centers for Medicare & Medicaid Services (CMS) reversed a low wage index policy and its related budget neutrality adjustment the agency had previously finalized in the FY 2025 IPPS final rule [refer to Washington Highlights, Aug. 2]. Hospitals in the bottom quartile of wage index values will no longer receive an increase in their wage index values from this policy.
To mitigate the impact to these hospitals, the agency is implementing a transitional exception policy for hospitals that benefited from the low wage index policy in FY 2024 and would experience a decrease of more than 5% from their FY 2024 wage index because of this change. Although the interim final rule took effect on Sept. 30, the CMS is accepting comments on it until Nov. 29.