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FFY 2024 Inpatient Prospective Payment System Proposed Rule
Webinar: May 9, 2023 – 10 a.m. PDT

Please join Toyon on Tuesday May 9, from 10-11:30 a.m. PDT for our presentation of the FFY 2024 Inpatient Prospective Payment System (IPPS) Proposed Rule. Interested participants can register here for the webinar.

Toyon’s service line leaders will discuss key changes in the Proposed Rule, including:

  • Market Basket and updates to FFY 2024 payment rates
  • Wage Index, with emphasis on changes to “rural floor” indices
  • Disproportionate Share (DSH) funding and allowable 1115 waiver days
  • Request for Information on safety-net hospitals
  • Graduate Medical Education and Allied Health reimbursement

Provider Impact Analysis
Please see Toyon’s estimated Medicare FFY 2024 IPPS payments for your hospital(s) here. Estimates can be rendered by selecting your hospital(s) in the top left of the dashboard under “Provider.” The estimated FFY 2024 payments are compared to FFY 2023 and are broken down by each component of the Medicare rate as provided by CMS.

Please contact Fred Fisher at 888.514.9312 or with any questions or for additional information.

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Medicare Graduate Medical Education and Organ Acquisition Payment Policy Changes

On Monday December 27, CMS published Federal Register / Vol. 86. No. 245 [CMS–1752–FC3. This Final Rule with comment period includes new teaching slots for graduate medical education, modifications to organ acquisition reimbursement, and postpones potential changes related to Section 1115 waiver days for empirical DSH payments. February 25 is the deadline to submit comments to CMS for the issues (discussed below) whereby CMS is seeking feedback. 

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Court Grants Government’s Motion to Remand Part C Cases Post-Allina II

Service Line Contact: 
Karen Kim, Vice President Appeal Services 888.514.9312



This week, the DC District Court granted the Secretary of Health and Human Services motion for voluntary remand of all cases related to Azar v. Allina Health Services, 139 S. Ct. 1804 (2019) (“Allina II”).


As you may know, Toyon has been helping Providers in appealing HHS’s decision to arbitrarily include Part C days in the Medicare fraction between 2004 and 2012, on the grounds that only Medicare Part A days should be included in the SSI ratio and that dual eligible Part C days belong in the numerator of the Medicaid ratio.
Last year, the Supreme Court in Allina II ruled in favor of our Providers, holding that HHS violated its rulemaking obligations by including Part C days in the Medicare fraction between 2004 and 2012. This court ruling should have resulted in CMS restoring the status quo and reinstating HHS’s prior-to-2004 policy (wherein Part C days were NOT included in the Medicare fraction) and distributing substantial additional DSH reimbursement to Providers.
Instead, HHS had requested voluntary remand of the cases to the agency to “re-examine these claims in light of [Allina II] and take further action as necessary to comply with the applicable legal standards announced therein.” Providers opposed remand and pushed the court to instead vacate the agency’s “invalid determinations” and enter judgment “with instructions to promptly pay the hospitals any additional DSH payments due,” pursuant to the Allina I and II decisions.
The Court on Tuesday ruled in HHS’s favor, stating that the agency has “already begun further action to address the Allina II decision,” and so the Court thought remand appropriate to allow the agency “to cure its own mistakes.” A copy of the Court’s order can be found here.
What this means to you
Unfortunately, the agency’s attempt to “address the Allina II decision” as referenced by the Court was publication of a proposed rule in August 2020 wherein CMS stated it would “adopt the same policy of including Medicare Advantage patient days in the Medicare fraction that was prospectively adopted in the FY 2014 IPPS/LTCH PPS final rule and to apply this policy retroactively to any cost reports that remain open for cost reporting periods starting before October 1, 2013.”
Thus, for many reasons, including the delays it would cause, our attorneys fought against the voluntary remand. The agency’s proposed rule and request for remand show that HHS likely plans to leave the problematic policy intact and to refuse correcting the illegal payment determinations for Providers.
What now?
Toyon is working with our attorneys (Ropes & Gray) to determine a strategy for next steps. We will provide you with additional updates as this matter unfolds.
Please contact Karen S. Kim at (925) 685-9312 or if you have any questions or concerns.
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