Separate IPPS Payment for Establishing and Maintaining Access to Essential Medicines
Separate IPPS Payment for Establishing and Maintaining Access to Essential Medicines
In the fiscal year (FY) 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule, CMS finalized a policy to provide separate IPPS payment to certain hospitals that voluntarily establish and maintain a 6-month buffer stock of one or more of 86 essential medicines, effective for cost reporting periods beginning on or after October 1, 2024 (89 FR 68989). Small, independent hospitals, that is hospitals with 100 beds or fewer that are not part of a chain organization, are eligible for these payments. These hospitals can establish their buffer stock(s) directly, or through contractual arrangements with a pharmaceutical manufacturer, distributor or intermediary.
Medicare will not pay for a newly established buffer stock of an essential medicine if that medicine is currently in shortage. However, CMS will continue to pay for a buffer stock of an essential medicine that had already been established prior to the essential medicine going into shortage. CMS will post on this webpage a file each quarter at the National Drug Code (NDC) level so that hospitals will know what NDCs are considered in shortage for that quarter for purposes of determining whether or not Medicare will pay for a newly established buffer stock of that NDC.
As an example, if a hospital wants to determine the shortage status of the NDC 0113-0227-71 for the purposes of newly establishing a 6-month buffer stock of the medicine in November of 2024, they would refer to the Excel document for the October to December 2024 calendar year quarter that was posted on or about October 1, 2024. Because that NDC is listed as not being in shortage per the applicable shortage status list on this website, the hospital would be able to newly establish a 6-month buffer stock of that medicine under our policy.
- 2024 Essential Medicines Shortage Lists
Page Last Modified:
09/20/2024 10:24 AM