The Centers for Medicare & Medicaid Services (CMS) have proposed a 2.6% increase in Medicare payments for outpatient and ambulatory surgical centers (ASCs) in 2025. This proposal mirrors the projected market basket increase of 3% for hospitals, adjusted by a 0.4 percentage point productivity reduction. This adjustment aligns with the ASC Payment Systems proposed rule. Hospital groups have expressed dissatisfaction, stating that the proposed rate does not adequately address the financial challenges posed by the COVID-19 pandemic and rising costs of labor and supplies. Premier, a hospital group purchasing organization, criticized the proposal, asserting it will “continue to widen the chasm between Medicare reimbursement and hospitals’ actual operational costs.”
Despite these claims, major hospital operators have shown high profit margins in recent years, driven by government aid, increased patient volumes, and strong investment returns. The proposed rule also aims to solidify continuous coverage requirements for children in safety-net insurance programs, an initiative stemming from the Consolidated Appropriations Act passed two years ago. More than 5 million children were disenrolled from Medicaid due to redeterminations, highlighting the importance of continuous coverage. The CMS released guidance to states on implementing these requirements, with 46 states having adopted the 12-month extension by March.
The state of Florida sued the CMS over the continuous eligibility requirement, arguing it should be able to terminate coverage if premiums are unpaid. Although a district judge dismissed the suit, the state is appealing the decision. The CMS is also introducing new standards for obstetrical services in hospitals participating in Medicare. These standards include maternal quality assessment, performance improvement requirements, and annual staff training on evidence-based maternal health practices. “For too long, too many women in the United States have been dying during pregnancy or in the postpartum period, and this crisis has disproportionately affected women of color,” stated HHS Secretary Xavier Becerra. For Black women, that rate jumps to 70 deaths per 100,000 live births, according to the Centers for Disease Control and Prevention.
The proposed rule requires hospitals’ emergency departments to be prepared for emergency screening or stabilization, applying to all hospitals and critical access hospitals offering emergency services, regardless of specialty services like obstetrics. “CMS is using all of our tools to improve the safety, quality, and timeliness of the care that hospitals provide to pregnant women. Through these proposals, we will ensure people get timely access to quality care in their communities, leading to improved outcomes and better health.” said Dora Hughes, acting CMS chief medical officer. The administration aims to improve maternal health outcomes and ensure timely access to quality care, leading to better health outcomes.
The CMS also proposes changes to help Indian Health Services (IHS) and tribal facilities afford high-cost drugs and authorize federal reimbursement for Medicaid clinic services delivered outside traditional settings. Additionally, the proposal includes modifications to allow Medicare services for recently incarcerated individuals now on parole, probation, or home detention. The proposed rule outlines adjustments to quality reporting programs for outpatient hospitals, inpatient hospitals, Rural Emergency Hospitals, and ASCs, and seeks stakeholder comments on potential modifications to the Overall Hospital Quality Star Rating methodology. The proposed rule will be published in the Federal Register on July 22, with a 60-day comment period ending on September 9.
