FY 2025 IPPS Final Rule Home Page

This is the home page for the FY 2025 Hospital Inpatient PPS final rule. The list below centralizes any IPPS file(s) related to the final rule. The list contains the final rule (display version or published Federal Register version) and a subsequent published correction notices (if applicable), all tables, additional data and analysis files and the impact file. For files related to the Long-Term Care Hospital PPS, please visit http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html.

FY 2025 IPPS Final Rule

1. CMS-1808-F

Date of Display: August 1, 2024

Description: Medicare and Medicaid Programs and the Children’s Health Insurance Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2025 Rates; Quality Programs Requirements; and Other Policy Changes

2. CMS-1808-CN2

Date of Display: September 27, 2024

Date of Publication: TBD

Title: Medicare and Medicaid Programs and the Children’s Health Insurance Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2025 Rates; Quality Programs Requirements; and Other Policy Changes; Correction

3. CMS-1808-IFC

Date of Display: September 30, 2024

Date of Publication: October 3, 2024

Comment Period: To be assured consideration, comments must be received no later than 11:59 p.m. EDT on November 29, 2024

Title: Medicare Program; Changes to the Fiscal Year 2025 Hospital Inpatient Prospective Payment System (IPPS) Rates Due to Court Decision

Summary: In the FY 2020 Inpatient Prospective Payment System/Long-Term Care Hospital (IPPS/LTCH) PPS final rule (84 FR 42325 through 42339), CMS finalized a policy to address increasing wage index disparities between low wage index hospitals and other hospitals. We explained that those growing disparities are likely caused, at least in part, by the use of historical wage data to prospectively set hospitals’ wage indexes. That lag between when hospitals increase wages and when those wage increases are reflected in the historical data creates barriers to hospitals with low wage index values being able to increase employee compensation, because those hospitals will not receive corresponding increases in their Medicare payment for several years (84 FR 42327).

Accordingly, CMS finalized a policy that provided certain low wage index hospitals with an opportunity to increase employee compensation without the usual lag in those increases being reflected in the calculation of the wage index (as they would expect to do if not for the lag). The agency accomplished this by temporarily increasing the wage index values for certain hospitals with low wage index values and doing so in a budget neutral manner through an adjustment applied to the standardized amounts for all hospitals. We increased the wage index for hospitals with a wage index value below the 25th percentile wage index value for a fiscal year by half the difference between the otherwise applicable final wage index value for a year for that hospital and the 25th percentile wage index value for that year across all hospitals (the low wage index hospital policy).

On July 23, 2024, the Court of Appeals for the D.C. Circuit held that Department of Health and Human Services lacked authority under section 1886(d)(3)(E) of the Act or under the “adjustments” language of section 1886(d)(5)(I)(i) of the Act to adopt the low wage index hospital policy for FY 2020, and that the policy and related budget neutrality adjustment must be vacated. (Bridgeport Hosp. v. Becerra, 108 F.4th 882, 887-91 & n.6 (D.C. Cir. 2024))

This Interim Final Action with Comment (IFC) implements revised Medicare IPPS wage index values for FY 2025, establishes a transition for low wage hospitals significantly impacted by those revisions, and makes conforming changes to the IPPS payment rates for FY 2025. These changes reflect the removal of the low wage index hospital policy following the D.C Circuit Court decision in Bridgeport Hosp. v. Becerra. This IFC also makes conforming changes to IPPS rates and factors used to determine certain payments under the Long-Term Care Hospital Prospective Payment System (LTCH PPS).

FY 2025 Final Rule, Correction Notice and Interim Final Action with Comment Period Data and Supplemental Files

1. FY 2025 Final Rule, Correction Notice and Interim Final Action with Comment Period  Impact File (ZIP): This file contains data elements by provider that were used in calculating the FY 2025 rates and impacts. 
2. AOR/BOR File (Final Rule and Correction Notice) (ZIP): This zip file for the FY 2025 final rule contains one excel spreadsheet with multiple tabs: one for the After Outliers Removed (AOR) and one for the Before Outliers Removed (BOR). There are also two tabs containing the variable descriptions. The variables in these files are used in the calculations of the relative weights as well as other calculations for the inpatient PPS. This file also contains the arithmetic and geometric mean lengths of stay which was previously included in Tables 7A and 7B. All text files in the zip file are for 508 compliance.
3. Case Mix Index File (Final Rule and Correction Notice) (ZIP): This file contains the non-transfer adjusted case mix index (CMI) based on the MS-DRGs billed on the claim in the year the claim was incurred (that is, during FY 2023, using the V40 Grouper).
4. FY 2025 Final Rule: HCRIS Data File (ZIP): CMS uses hospital cost report data from the Medicare Cost Report, Hospital Form 2552-10, to calculate the Cost-to-Charge Ratios (CCRs) used in the cost based MS-DRG relative weight methodology. The database for the Medicare cost reports is the Healthcare Cost Report Information System (HCRIS).  The CCRs used in the calculation of the MS‑DRG relative weights for the FY 2025 IPPS Final Rule are derived from the March 31, 2024 quarterly update of the FY 2022 HCRIS.  (HCRIS is updated on a quarterly basis).
5. Cost Center HCRIS Lines Supplemental Data File (ZIP): This supplemental data file shows the cost report lines that are used for the Cost Center CCR calculations, which are part of the MS-DRG Relative Weights calculations. In addition, the FR FY 2025 normalization factor is included on the second tab.
6. Standardizing File (Final Rule and Correction Notice) (ZIP): This file is used to standardize charges for the rate building process.
7. County to CBSA Crosswalk File and Urban CBSAs and Constituent Counties for Acute Care Hospitals File (ZIP): This file contains two tabs: A crosswalk of county codes to CBSAs (including the revised CBSA delineations for FY 2025) and a list of Urban CBSAs and Constituent Counties for Acute Care Hospitals Files.
8. FY 2025 Wage Index Public Use Files (ZIP): Open Attached Zip file. Attached is a PDF with a description of each zip file. Main zip file contains 5 zip files:
   • FY 2025 Final Rule Wage Index PUFs; S3 Part II and Occ Mix Data
   • FY 2025 Final Rule Occupational Mix Adjusted and Unadjusted Average Hourly Wages and Occupational Mix Factor by Provider
   • FY 2025 Final Rule Occupational Mix Adjusted and Unadjusted Average Hourly Wages and Pre-Reclass Wage Indexes by CBSA
   • FY 2025 Final Rule AHW by Provider Area Listing
9. Imputed State Floors Public Use File (Final Rule, Correction Notice and Interim Final Action with Comment Period) (ZIP): Contains multiple tabs demonstrating step by step calculation of the imputed floor.
10. FY 2025 IPPS Final Rule, Correction Notice and Interim Final Action with Comment Period Medicare DSH Supplemental Data File (ZIP): This spreadsheet has 4 tabs (text files for each tab are included for Section 508 compliance):   The first tab is the File Layout for second tab of the spreadsheet. The second tab contains the FY 2025 final rule Factor 3 and data used to calculate Factor 3 to implement Section 3133 of the ACA, Improvements to Medicare DSH Payments. The third tab contains a list of hospitals that have undergone a merger where the data of the merging hospitals have been combined to calculate the Factor 3 for the surviving hospital for FY 2025. The fourth tab contains the Medicare DSH estimates to support the calculation of the final Factor 1.
11. Hospital Readmissions Reduction Program Supplemental Data File (ZIP): This file contains the final FY 2025 payment adjustment factors CMS applies to discharges that occur on or after October 1, 2024. It also contains information on the number of discharges used to determine the ratio of condition/procedure-specific payments to total base operating diagnosis-related (DRG) payments.
12. FY 2026 New Technology Add-On Payment Thresholds (Interim Final Action with Comment Period) (ZIP): Contains the cost thresholds by MS-DRG for the cost criteria for new technology add-on payments for applications for FY 2026.
13. Supplementary Provider-level file with Beneficiary Characteristics (Final Rule and Correction Notice) (ZIP): This file is a supplemental file to Table III. Provider Deciles by Beneficiary Characteristics in the Appendix of the final rule and contains the percentage of discharges at each hospital for each of the following characteristics: race/ethnicity, dual eligibility for Medicaid and Medicare, Medicare low income subsidy (LIS) enrollment, a joint indicator for dual or LIS enrollment, presence of an ICD-10-CM Z code indicating a “social determinant of health” (SDOH), presence of a behavioral health diagnosis code, receiving ESRD Medicare coverage, qualifying for Medicare due to disability, living in a rural area, and living in an area with an area deprivation index (ADI) greater than or equal to 85.
14. Outlier Reconciliation Public Use File (ZIP): Contains data used to identify hospitals that would have met the criteria to be referred for outlier reconciliation under CR 13566 as if they had been in place at the time of final cost report settlement as well as the data for these hospitals that was used in the calculation of the outlier reconciliation amounts used for the FY 2025 outlier threshold.
     

FY 2025 Final Rule, Correction Notice and Interim Final Action with Comment Period Tables

1. Table 1A-1E (Final Rule, Correction Notice and Interim Final Action with Comment Period) (ZIP): This excel spreadsheet contains the FY 2025 Operating and Capital National Standardized Amounts.
2. FY 2025 Tables 2, 3 and 4A and 4B (Wage Index Tables) (Final Rule, Correction Notice and Interim Final Action with Comment Period) (ZIP):  
   • Table 2- Case-Mix Index and Wage Index Table by CMS Certification Number (CCN)
   • Table 3- Wage Index Table by CBSA
   • Table 4A - List of Counties Eligible for the Out-Migration Adjustment under Section 1886(d)(13) of the Act
   • Table 4B - Counties Redesignated under Section 1886(d)(8)(B) of the Act (LUGAR COUNTIES)
3. Table 5 (Final Rule and Correction Notice) (ZIP): MS-DRGs, Relative Weighting Factors and Geometric and Arithmetic Mean Length of Stay
4. Tables 6A-6K and Tables 6P.1a-6P.4d (ZIP): Table 6A-New Diagnosis Codes; Table 6B-New Procedure Codes; Table 6C-Invalid Diagnosis Codes; Table 6D – Invalid Procedure Codes; Table 6E-Revised Diagnosis Code Titles; Table 6F – Revised Procedure Code Titles; Table 6G.1- Secondary Diagnosis Order Additions to the CC Exclusions List; Table 6G.2- Principal Diagnosis Order Additions to the CC Exclusions List; Table 6H.1- Secondary Diagnosis Order Deletions to the CC Exclusions List; Table 6H.2- Principal Diagnosis Order Deletions to the CC Exclusions List; Table 6I. – Complete MCC List; Table 6I.1- Additions to the MCC List; Table 6J. – Complete CC List; Table 6J.1- Additions to the CC List; and Table 6J.2 – Deletions to the CC List; Table 6K. – Complete CC Exclusions List.  Tables 6P.1a-6P.4d (ICD-10-CM and ICD-10-PCS Codes for MS-DRG Changes and Analysis with Application of the NonCC Subgroup Criteria): See summary tab in excel spreadsheet called “CMS-1808-F TABLE 6P ICD-10-CM and ICD-10-PCS Codes for MS-DRG Changes and Analysis with Application of the NonCC Subgroup Criteria.xlsx” for a complete description of all tables.
5. Tables 8A, 8B, and 8C (ZIP): Tables 8A and 8B contain the FY 2025 IPPS operating and capital statewide average cost-to-charge-ratios. Table 8C contains the FY 2025 LTCH statewide average cost-to-charge-ratios.
6. Table 15: FY 2025 Hospital Readmissions Reduction Program Payment Adjustment Factors (ZIP): This table contains the final FY 2025 payment adjustment factors CMS applies to discharges occurring on or after October 1, 2024.
7. Tables 16A and 16B Hospital Value-Based Purchasing (VBP) Program Adjustment Factors:
   • Table 16A (ZIP): Contains updated proxy adjustment factors under the Hospital VBP Program that were calculated using historical baseline and performance periods. These proxies for the FY 2024 Hospital VBP payment adjustment factors will not be used to adjust hospital payments. This file includes the proxy adjustment factors published for the FY 2025 IPPS Final Rule (CMS-1808-F).
   • Table 16B: Contains the actual payment adjustment factors under the Hospital VBP Program for FY 2025. These actual factors are based on the finalized baseline and performance period for FY 2025 and will be used to adjust base operating DRG payments to eligible hospitals for discharges occurring in FY 2025. Note: Table 16B will be available in the Fall of 2024.
8. Table 18 Final Rule (Final Rule, Correction Notice and Interim Final Action with Comment Period) (ZIP): FY 2025 Medicare DSH Uncompensated Care Payment Factor 3.

FY 2025 MAC Implementation Files

This page contains the following files as described in the Fiscal Year (FY) 2025 Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) PPS Changes Change Request (CR) 13734.

1. MAC Implementation File 1 (ZIP) – Certain FY 2025 IPPS factors, including applicable percentage increase, budget neutrality factors, High Cost Outlier (HCO) threshold, and Cost-of-Living adjustment (COLA) factors. 
2. MAC Implementation File 2 (ZIP) – (Updated 10/01/2024) Certain FY 2025 LTCH PPS factors, including High Cost Outlier (HCO) threshold, and Cost-of-Living adjustment (COLA) factors.
3. MAC Implementation File 3 (ZIP) – (Updated 9/6/2024) A list of hospitals that will receive the statutory reduction to the annual payment update for FY 2025 under the Hospital Inpatient Quality Reporting (IQR) Program.
4. MAC Implementation File 4 (ZIP) – Lists of counties that will no longer be deemed urban under section 1886(d)(8)(B) of the Act effective October 1, 2024.
5. MAC Implementation File 5 (ZIP) – Instructions to Fill Out the PSF for the Wage Index and Reclassification.
6. MAC Implementation File 6 (ZIP) –FY 2025 MS-DRG Grouper Changes.
7. MAC Implementation File 7 (ZIP) – FY 2025 MS-DRGs Subject to the Replaced Devices Policy.  
8. MAC Implementation File 8 (ZIP) – FY 2025 New Technology Add-on Payment.
9. MAC Implementation File 9 (ZIP) – Instructions to Fill Out the PSF for LTCHs receiving a capped LTCH PPS wage index value or a capped applicable IPPS comparable wage index value in FY 2025.