CY 2025 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule (CMS 1809-FC)

On November 1, 2024, the Centers for Medicare & Medicaid Services (CMS) issued Medicare payment rates for hospital outpatient and Ambulatory Surgical Center (ASC) services for calendar year (CY 2025). The Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System final rule is published annually.

In addition to finalizing payment rates, this year’s rule includes policies that align with several key goals of the Biden-Harris Administration, including responding to the maternal health crisis, addressing health disparities, expanding access to behavioral health care, improving transparency in the health system, and promoting safe, effective, and patient-centered care. The final rule advances the agency’s commitment to strengthening Medicare and uses the lessons learned from the COVID-19 public health emergency (PHE) to inform the approach to quality measurement, focusing on changes that would help address health inequities.Â

These payment policies affect approximately 3,500 hospitals and approximately 6,100 ASCs. CMS is publishing this final rule to meet the legal requirements to update Medicare payment policies for OPPS hospitals and ASCs annually. This fact sheet discusses the major provisions of the final rule (CMS-1809-FC), which can be downloaded at:Â https://www.federalregister.gov/public-inspection/2024-25521/medicare-and-medicaid-programs-hospital-outpatient-prospective-payment-and-ambulatory-surgical

Updates to OPPS and ASC payment rates

In accordance with Medicare law, CMS is finalizing an update to OPPS payment rates of 2.9% for hospitals that meet applicable quality reporting requirements. This update is based on the projected hospital market basket percentage increase of 3.4% reduced by a 0.5 percentage point productivity adjustment.

In the CY 2019 OPPS/ASC final rule with comment period, CMS finalized a proposal to apply the hospital market basket update to ASC payment system rates for an interim period of five years (CY 2019 through CY 2023). The CY 2024 OPPS/ASC final rule with comment period extended the interim period for an additional two years (through CY 2024 and CY 2025). Accordingly, using the hospital market basket update, CMS is finalizing an update factor to the ASC payment rates for CY 2025 of 2.9%. The update applies to ASCs meeting relevant quality reporting requirements. This update is based on the projected hospital market basket percentage increase of 3.4% reduced by a 0.5 percentage point productivity adjustment.

Intensive Outpatient Program
Intensive Outpatient Program (IOP) Rate Setting

The CY 2025 OPPS/ASC final rule updates Medicare payment rates for intensive outpatient program (IOP) services furnished in hospital outpatient departments and Community Mental Health Centers (CMHCs). The IOP is a distinct and organized outpatient program of psychiatric services provided for individuals who have an acute mental illness or substance use disorder, consisting of a specified group of behavioral health services paid on a per diem basis for a minimum of nine hours of IOP services per week under the OPPS, or another applicable payment system when furnished in Federally Qualified Health Centers (FQHCs) or Rural Health Clinics (RHCs). IOP services may also be furnished in Opioid Treatment Programs (OTPs) for the treatment of opioid use disorder (OUD).

Update to IOP Payment Rates in Hospital Outpatient Departments and CMHCs

CMS is maintaining the existing rate structure, with two IOP APCs for each provider type: one for days with three services per day and one for days with four or more services per day. For this CY 2025 rate setting, CMS is using the CY 2023 claims data and the latest available cost information from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking.

For CY 2025, CMS is maintaining the calculation of both hospital outpatient department and CMHC IOP payment rates for three services per day and four or more services per day based on cost per day using OPPS data that includes Partial Hospitalization Program (PHP) and non-PHP days. CMS believes continuing to use the OPPS data set will allow CMS to capture data from hospital claims that are not identified as PHP, but that include the service codes and intensity required for a PHP day.

Partial Hospitalization Program

Partial Hospitalization Program Rate Setting

The CY 2025 OPPS/ASC final rule updates Medicare payment rates for partial hospitalization program services furnished in hospital outpatient departments and CMHCs. The PHP is an intensive, structured outpatient program provided as an alternative to psychiatric hospitalization, consisting of a specified group of mental health services paid on a per diem basis for a minimum of 20 hours of PHP services per week under the OPPS, based on PHP per diem costs.

Update to PHP Per Diem Rates

CMS is maintaining the existing rate structure, with two PHP APCs for each provider type: one for days with three services per day and one for days with four or more services per day. Consistent with the OPPS, for this CY 2025 rate setting, CMS is using the CY 2023 claims data and the latest available cost information from cost reports beginning three fiscal years prior to the year that is the subject of the rulemaking.

For CY 2025, CMS is maintaining the calculation of both hospital outpatient and CMHC PHP payment rates for three services per day and four or more services per day based on cost per day using OPPS data that includes PHP and non-PHP days. CMS believes continuing to use the OPPS data set will allow CMS to capture data from hospital claims that are not identified as PHP but that include the service codes and intensity required for a PHP day.

Access to Non-Opioid Treatments for Pain Relief

CMS is finalizing the implementation of Section 4135 of the Consolidated Appropriations Act (CAA), 2023, which provides temporary additional payments for certain non-opioid treatments for pain relief in the hospital outpatient department (HOPD) and ASC settings from January 1, 2025, through December 31, 2027. This policy is implementing several statutory provisions, including evidence requirements for medical devices and the requirements for the FDA-approved indications. To implement the statutory payment limitation, under which the additional payment must not exceed the estimated average of 18% of the OPPS payment for OPPS service, or group of services, with which the non-opioid treatment for pain relief is furnished, CMS is finalizing our proposal to utilize the top five OPPS procedures by volume, for each non-opioid drug or device, to calculate the payment limitation.Â

CMS is finalizing the policy to include drugs and devices that qualify as non-opioid treatments for pain relief, and these products will be paid separately in both the HOPD and ASC settings starting in CY 2025. The qualifying drugs have FDA-approved indications to reduce post-operative pain or produce postsurgical analgesia, and the qualifying medical devices have demonstrated through evidence that they reduce opioid usage when used in the post-operative setting. Paying separately to encourage the uptake of these non-opioid products is part of the Biden-Harris Administration’s commitment to reducing opioid use disorder and overdose.Â

All-Inclusive Rate (AIR) Add-On Payment for High-Cost Drugs Provided by Indian Health Service (IHS) and Tribal Hospitals

Under current regulations, IHS and tribal hospitals are excluded from payment under the OPPS. Instead, IHS and tribal outpatient departments are paid the Medicare outpatient hospital AIR for each encounter that provides hospital outpatient services. On an annual basis, IHS calculates and publishes, in the Federal Register, calendar year payment rates. These rates are often referred to as the AIR, which is updated annually based on a review of yearly cost reports. For CY 2024, the outpatient AIR is $667 in the lower 48 states.Â

IHS and tribal hospitals have continued to expand the breadth of services that they provide to their communities, which has increased access to care. Increasingly, this has meant providing higher-cost drugs along with more complex and expensive services, such as cancer-related services. To improve the payments to IHS and tribal hospitals, and better account for the costs of high-cost drugs furnished to people with Medicare seeking care at these facilities, we are finalizing our proposal to pay an add-on to the AIR for all drugs, whose per day cost exceeds two times the Medicare Outpatient per Visit Rate for the lower 48 states’ AIR ($1,334 in CY 2024), furnished to people with Medicare who receive care from IHS or tribal hospital outpatient departments. We believe this will increase access to high-cost drugs like certain chemotherapies in IHS and tribal hospital settings, and will help improve disparities in access to cancer-related care consistent with the goals of the Cancer Moonshot.Â

Request for Information: Paying all IHS and Tribally Operated Clinics the IHS Medicare Outpatient AIR

In response to the CMS Tribal Technical Advisory Group (TTAG) request that CMS amend its Medicare regulations to make all IHS and tribal hospitals eligible for payment at the IHS Medicare outpatient AIR, we requested information on the types of clinics and costs of services in these settings. This was a follow-up to a similar request for information in the CY 2022 PFS proposed rule. CMS will continue to evaluate the comments for potential future rulemaking and collaborate with the TTAG on improving health outcomes for tribal populations.Â

Improving Payment for High-Cost Diagnostic Radiopharmaceuticals

Under the OPPS, the payment for diagnostic radiopharmaceuticals is packaged into the payment for the nuclear medicine tests they are used with. While this payment approach generally works appropriately to support efficient care, we recognize that, in some specific circumstances, the payment amount for the nuclear medicine tests may not adequately account for the cost of certain high-cost diagnostic radiopharmaceuticals, even when those agents may be the most clinically appropriate. Consequently, we are finalizing refinements to the existing packaging policy to improve the accuracy of the overall payment amounts by paying separately for any diagnostic radiopharmaceutical with a per day cost greater than $630 and removing their costs from the payment amounts for the nuclear medicine APCs. All qualifying products will be paid separately at their mean unit cost (MUC), which is a payment rate derived from hospital claims data. Any diagnostic radiopharmaceutical with a per-day cost equal to or below that threshold will continue to be policy packaged, with payment for the nuclear medicine tests. This update should address challenges for patients in accessing these prescribed nuclear medicine tests with higher-cost radiopharmaceuticals.Â

Add-on Payment for Domestically Produced Technetium-99m (Tc-99m)

Radioisotopes are widely used in modern medical imaging. Technetium-99m (Tc‑99m), the radioisotope used in most diagnostic imaging services, is historically derived from legacy reactors outside of the United States using highly enriched uranium (HEU). Beginning in CY 2013, we finalized a policy to provide an additional payment of $10 for the marginal cost of Tc-99m produced by non-HEU sources.

CY 2025 is the final year of the add-on payment for Tc-99m when the Tc-99m is produced without the use of HEU, as the Secretaries of the U.S. Departments of Energy and of Health and Human Services have issued a certification that there is sufficient global supply of Tc-99m  without the use of HEU available to meet the needs of patients in the United States.

However, the Department of Energy and other interested parties have identified another issue affecting the domestic supply chain for molybdenum-99 (Mo-99), the source material for Tc-99m, that could cause payment inequity among outpatient hospital providers. Foreign Mo-99 production has historically been subsidized by foreign governments, resulting in prices below the true cost of production. These artificially low, foreign government-subsidized prices have created a disincentive for domestic investments in Mo-99 production infrastructure and a barrier to entry for new producers. We are finalizing our proposal to address the payment inequity in this rule by establishing a new add-on payment, of $10 per dose, for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99, starting on January 1, 2026. We believe the $10 add-on payment for domestically produced Tc-99m would ensure equitable payments, by paying providers who use domestically produced Tc-99m radiopharmaceuticals, when available, an amount that reflects the anticipated higher cost of these products. The $10 add-on payment will help to ensure access to domestically produced Tc-99m radiopharmaceuticals by addressing the additional cost of domestically produced Tc-99m radiopharmaceuticals.Â

Request for Information on Payment Adjustments for Additional Costs of Domestic Personal Protection Equipment (PPE)Â

Hospitals need to be able to access a reliable supply of PPE that are delivered on a timely basis in order to protect health care workers and their patients, and sustaining domestic production of these products is important for helping to maintain that assurance. Currently, CMS recognizes that hospitals may incur additional costs when purchasing domestically made NIOSH-approved surgical N95 respirators and makes additional hospital payments that would account for those costs. In the proposed rule, CMS sought information on potentially improving and expanding this policy. CMS greatly appreciates the many thoughtful and informative comments we received in response and intends to propose to expand the payment adjustments in 2026 rulemaking.

Payment Policy for Devices in Category B Investigational Device Exemption Clinical Trials and Drugs, and Devices with a Medicare Coverage with Evidence Development (CED) DesignationÂ

In the CY 2023 OPPS final rule with comment period, we finalized a policy to make a single blended payment for devices and services in Category B Investigational Device Exemption (IDE) studies, in order to preserve the scientific validity of these studies by avoiding differences in Medicare payment methods that would otherwise reveal the group (treatment or control) to which a patient had been assigned. We proposed to extend our coding and payment policy to drugs and devices being studied in clinical trials under a Coverage with Evidence Development (CED) National Coverage Determination (NCD)[1], for which the trial includes a treatment and control arm. Based on commenter feedback, we are not finalizing our proposal at this time. We believe that there are broader policy implications that require further consideration prior to finalizing a policy; therefore, we are not finalizing our proposal.

Individuals Formerly in the Custody of Penal AuthoritiesÂ

To support individuals returning to the community from incarceration and individuals who have been sentenced to probation or home detention without jail time, CMS is finalizing our proposal to narrow the definition of “custody” in Medicare’s payment exclusion rule and to revise the Medicare special enrollment period (SEP) for formerly incarcerated individuals. These modifications remove real or perceived barriers to Medicare access by individuals who have recently been released from incarceration or are on parole, probation, or home detention.

Medicare is prohibited by statute from paying for an item or service if the individual receiving the item or service has no legal obligation to pay for it. Under Medicare regulations, an individual who is in the custody of penal authorities (e.g., in prison or jail) is presumed to have no legal obligation to pay for his or her health care; therefore, Medicare is presumed to be prohibited from paying for health care items or services furnished to such individuals. Currently, the definition of “custody” is very broad, including not only individuals who are physically detained in prison or jail but also potentially individuals who are not physically confined in jail or prison, such as individuals on bail, parole, probation, or home detention and individuals residing in halfway houses. Thus, applying the current definition of “custody,” there is a presumption that Medicare will not pay for health care items or services furnished to individuals who are on bail, parole, probation, or home detention, or who are required to reside in halfway houses.

CMS is finalizing our proposal to narrow the definition of “custody” to no longer include individuals who are on bail, parole, probation, and home detention. In the final rule, CMS is also narrowing the definition of “custody” to no longer include individuals who are required to reside in halfway houses. The finalized definition of “custody” removes the presumption that Medicare is prohibited from paying for health care items or services furnished to individuals on bail, parole, probation, or home detention and individuals who are required to reside in halfway houses, thus facilitating access to Medicare payment. To facilitate access to Medicare coverage, CMS is finalizing our proposal to revise the eligibility criteria for the special enrollment period for formerly incarcerated individuals to include individuals who have been released from incarceration or on bail, parole, probation, or home detention and align more closely with the Social Security Administration’s criteria for determining incarceration status. In addition, the eligibility criteria will be expanded to include individuals released from incarceration to residency in halfway houses.

Obstetrical Services’ Conditions of ParticipationÂ

The United States is currently facing a maternal health crisis, which has not only led to a maternal mortality rate that is among the highest in high-income countries, but also disproportionately affects people of color. To address this crisis, CMS is finalizing new national health and safety standards, known as conditions of participation (CoPs), for hospitals and Critical Access Hospitals (CAHs) that offer obstetrical (OB) services as part of CMS’ multi-pronged approach to improve maternal health outcomes. These CoPs include new requirements for maternal quality assessment and performance improvement (QAPI), baseline standards for the organization, staffing, and delivery of OB care, and staff training on evidence-based maternal health practices. These final requirements ensure that all Medicare and Medicaid participating hospitals and CAHs offering these services are held to a consistent standard of high-quality maternity care that protects the health and safety of pregnant, birthing, and postpartum patients.

CMS is also finalizing revisions to the CoP related to emergency readiness for hospitals and CAHs that provide emergency services. Lastly, CMS is finalizing revisions to the Discharge Planning CoP for all hospitals related to transfer protocols.

Given commenter feedback, CMS is finalizing a phased-in implementation for these new requirements in an effort to balance the need for improved maternal health outcomes, while addressing potential burden concerns raised and providing additional clarity on the standards, including flexibilities offered.Â

Provisions for OB Services’ CoP

Organization and Staffing

CMS is finalizing a requirement that OB services be well organized and provided in accordance with nationally recognized acceptable standards of practice for the health care (including physical and behavioral health) of pregnant, birthing, and postpartum patients. We are also finalizing that the organization of the OB services be appropriate to the scope of services offered by the facility and be integrated with other departments in the facility. Additionally, we are finalizing a requirement that OB patient care units be supervised by an individual with the necessary education and training, such as an experienced registered nurse (RN), certified midwife, nurse practitioner, physician assistant, or Doctor of Medicine or osteopathy. Lastly, we are finalizing a requirement that OB privileges be granted subject to written criteria for all practitioners providing OB care in accordance with the current requirements for hospitals and CAHs.

Delivery of serviceÂ

CMS will require that that basic equipment for treating OB cases (including a call-in-system, cardiac monitor, and fetal doppler/monitor) be kept at the facility and be readily available for treating OB cases in order to meet the needs of patients in accordance with the scope, volume, and complexity of services offered by the facility. While CMS is finalizing the requirement that this basic set of equipment should be in place in hospitals and CAHs providing OB services to ensure efficient, effective delivery of care as well as a timely response to emergency situations, we recognize that low-volume facilities may not need the same level of equipment as high-volume facilities. Therefore, we are finalizing this requirement with revisions to clarify that hospitals and CAHs must have this obstetrical equipment readily available at a minimum within the facility. We note that hospitals and CAHs may maintain these and other obstetrical emergency supplies in “crash carts,” “obstetrical emergency carts/bags/boxes/kits,”[2] “OB hemorrhage carts,”[3] or other readily accessible method for use when and where needed. We expect facilities to stock equipment in a manner that aligns with the facility’s scope, volume, and complexity of OB services offered (that is, per facility, per unit, or per room in order to meet the needs of patients).

Lastly, CMS is finalizing a requirement that the facility ensure that it has adequate, readily available provisions and protocols consistent with nationally recognized and evidence-based guidelines for OB emergencies, complications, immediate post-delivery care, and other patient health and safety events. Although we are not requiring specific items, examples of provisions would include equipment, supplies, and blood used in treating emergency cases.

Staff Training

CMS is finalizing a requirement that hospitals and CAHs develop policies and procedures to ensure that relevant staff are trained on certain topics aimed at improving the delivery of maternal care. CMS requires that these training topics reflect the scope and complexity of services offered, including, but not limited to, facility-identified, evidence-based, best practices and protocols to improve the delivery of maternal care within the facility. Additionally, CMS is finalizing a requirement that hospitals and CAHs use findings from their QAPI programs to inform staff training needs and any additions, revisions, or updates to training topics on an ongoing basis. While we proposed that each hospital and CAH must identify and document which staff must complete training on an annual basis, we are modifying our finalized policy based on public comment to require that: 1) relevant new staff receive initial training and 2) that the hospital and CAH identify which staff must complete training every two years instead of annually. Hospitals and CAHs must also document in staff personnel records that training was successfully completed and be able to demonstrate staff knowledge on the training topics identified.

Quality Assessment and Performance Improvement (QAPI) Program

CMS is finalizing requirements that hospitals or CAHs providing OB services must use their QAPI programs to assess and improve health outcomes and disparities among OB patients on an ongoing basis. This marks the first time that facilities must use their QAPI programs to address health disparities. Specifically, at a minimum, the facility will have to:Â

We will also require that obstetrical services’ leadership engage in OB QAPI activities. Lastly, CMS is finalizing a requirement that if a Maternal Mortality Review Committee (MMRC) is available at the state, Tribal, or local jurisdiction in which the facility is located, hospitals and CAHs that offer OB services must have a process for incorporating publicly available information and data from the MMRC into the hospital or CAH QAPI program.

Emergency Services’ Readiness

CMS is finalizing a revised Emergency Services’ CoP to improve facility readiness in caring for emergency services’ patients, including pregnant, birthing, and postpartum women. These new requirements apply to all hospitals and CAHs offering emergency services, regardless of whether they provide specialty services, such as OB services. CMS will require that hospitals and CAHs with emergency services have adequate provisions and protocols to meet the emergency needs of patients. Specifically, hospitals and CAHs must have protocols consistent with nationally recognized and evidence-based guidelines for the care of patients with emergency conditions. Additionally, we are requiring that applicable staff be trained on these protocols and provisions annually, and documentation would be expected to show that staff have successfully completed such training and can demonstrate knowledge on these topics.Â

Lastly, CMS is finalizing, for hospitals only, a requirement that such facilities set aside provisions for emergencies. Such provisions include equipment, supplies, and medication used in treating emergency cases. Although we are not requiring specific items, the available provisions must include:

Of note, the emergency supply requirements would not be necessary for CAHs and Rural Emergency Hospitals (REHs), as CAHs and REHs already have emergency supply requirements included in their CoPs.

Transfer Protocols

CMS is finalizing the requirement for a hospital to have written policies and procedures for transferring patients under its care, which will include intra-hospital transfers of hospital inpatients (for example, transfers from the emergency room to inpatient admissions, transfers between inpatient units in the same hospital, and transfers between inpatient units at different hospitals), to the appropriate level of care as needed to meet the patient’s needs. Lastly, we are finalizing the proposed requirement that hospitals must provide training to the relevant staff regarding the hospital policies and procedures for transferring patients under its care, with the modification that the training must be done annually. This modification ensures that hospital staff are following the same procedures regarding patient transfers, that staff are informed about any changes in transfer protocols, and that staff conduct transfers safely and by minimizing errors.

Implementation Phase-In

CMS received many comments requesting sufficient time for hospitals and CAHs to meet these new requirements. CMS is, therefore, implementing these provisions in three phases over two years:Â

We believe this approach will balance the need to address the maternal health crisis and improve patient outcomes, while also addressing concerns about the burden and unintended consequences raised by commenters.

Hospital Inpatient Quality Reporting (IQR) ProgramÂ

The Hospital IQR Program is a pay-for-reporting quality program that reduces payments to hospitals that do not meet program requirements. Hospitals that do not submit quality data or do not meet all Hospital IQR Program requirements are subject to a one-fourth reduction in their Annual Payment Update under the Inpatient Prospective Payment System.Â

In the CY 2025 OPPS/ASC final rule, CMS is finalizing its proposal to continue voluntary reporting of the core clinical data elements (CCDEs) and linking variables for both the Hybrid Hospital-Wide Readmission and Hybrid Hospital-Wide Standardized Mortality measures, for the performance period of July 1, 2023, through June 30, 2024, impacting the FY 2026 payment determination for the Hospital IQR Program. After consideration of public comment and further analysis, CMS is also extending the voluntary reporting of the CCDEs and linking variables for the July 1, 2024, through June 30, 2025, performance period, which is associated with the FY 2027 payment determination.

Hospital Outpatient Quality Reporting (OQR) Program

The Hospital OQR Program is a pay-for-reporting quality program for hospital outpatient departments that requires hospitals to meet quality reporting requirements or receive a reduction of 2 percentage points to their Annual Payment Update under the OPPS if these requirements are not met.

In the CY 2025 OPPS/ASC final rule, CMS is finalizing its proposals to adopt: (1) the Hospital Commitment to Health Equity measure beginning with the CY 2025 reporting period/CY 2027 payment determination; (2) the Screening for Social Drivers of Health measure beginning with voluntary reporting in the CY 2025 reporting period, followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment determination; (3) the Screen Positive Rate for Social Drivers of Health measure beginning with voluntary reporting in the CY 2025 reporting period, followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment determination; and (4) the Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery, Patient Reported Outcome-Based Performance measure beginning with voluntary reporting in the CY 2026 reporting period, followed by mandatory reporting beginning with the CY 2027 reporting period/CY 2029 payment determination.

In addition, CMS is finalizing its proposals to remove: (1) the MRI Lumbar Spine for Low Back Pain measure beginning with the CY 2025 reporting period/CY 2027 payment determination and (2) the Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery measure beginning with the CY 2025 reporting period/CY 2027 payment determination.Â

CMS is also finalizing proposals to: (1) modify the immediate measure removal policy to an immediate measure suspension policy for adopted Hospital OQR Program measures; (2) require that electronic health record (EHR) technology be certified to all electronic clinical quality measures available to report in the Hospital OQR Program; and (3) publicly report the Median Time from Emergency Department (ED) Arrival to ED Departure for Discharged ED Patients measure-Psychiatric/Mental Health Patients strata on the Compare tool hosted by HHS, available at: https://www.medicare.gov/care-compare/.

Rural Emergency Hospital Quality Reporting (REHQR) Program

Section 125 of Division CC of the CAA, 2021 added section 1861(kkk) to the Social Security Act (the Act), which established a new Medicare provider type, Rural Emergency Hospitals (REHs). An REH is a facility that, in relevant part as of December 27, 2020, was a Critical Access Hospital (CAH) or a subsection (d) hospital with not more than 50 beds located in a county (or equivalent unit of local government) that is in a rural area (defined at section 1886(d)(2)(D) of the Act), or was a subsection (d) hospital with not more than 50 beds that was treated as being in a rural area (pursuant to section 1886(d)(8)(E) of the Act). An REH must submit quality measure data to the Secretary, and the Secretary shall establish procedures to make the data available to the public on a CMS website.

In the CY 2025 OPPS/ASC final rule, CMS is finalizing its proposals to adopt: (1) the Hospital Commitment to Health Equity measure beginning with the CY 2025 reporting period/CY 2027 program determination; (2) the Screening for Social Drivers of Health measure beginning with voluntary reporting in the CY 2025 reporting period, followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 program determination; and (3) the Screen Positive Rate for Social Drivers of Health measure beginning with voluntary reporting in the CY 2025 reporting period, followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 program determination.Â

CMS is also finalizing its proposals to: (1) extend the reporting period for the Risk-Standardized Hospital Visits Within 7 Days After Hospital Outpatient Surgery measure from one year to two years beginning with the CY 2025 reporting period; and (2) establish when, after conversion to REH status, REHs would be required to report data under the REHQR Program, such that an REH would begin submitting data to the REHQR Program on the first day of the quarter following the date that a hospital has been designated as converted to an REH.

Ambulatory Surgical Center Quality Reporting (ASCQR) Program

The ASCQR Program is a pay-for-reporting quality program for ASCs that requires facilities to meet quality reporting requirements or receive a reduction of 2 percentage points to their Annual Payment Update under the ASC fee schedule if these requirements are not met.

In the CY 2025 OPPS/ASC final rule, CMS is finalizing its proposals to adopt: (1) the Facility Commitment to Health Equity measure beginning with the CY 2025 reporting period/CY 2027 program determination; (2) the Screening for Social Drivers of Health measure beginning with voluntary reporting in the CY 2025 reporting period, followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment determination; and (3) the Screen Positive Rate for Social Drivers of Health measure beginning with voluntary reporting in the CY 2025 reporting period, followed by mandatory reporting beginning with the CY 2026 reporting period/CY 2028 payment determination.Â

CMS is also finalizing its proposal to modify the immediate measure removal policy to an immediate measure suspension policy for adopted ASCQR Program measures.

Additionally, CMS summarizes the comments it received in response to its Request for Information on the Development of Frameworks for Specialty Focused Reporting and Minimum Case Number for Required Reporting to achieve the following outcomes: (1) the addition of case minimums for measure reporting for specialty measures, defined as measures related to clinical procedures performed only by a subset of ASCs; (2) the removal of the zero case attestation requirement for specialty measures to decrease reporting burden; and (3) the verification of case counts using claims data to determine which specialty measures would be required for reporting for individual ASCs.Â

Overall Hospital Quality Star Rating Request for InformationÂ

The Overall Hospital Quality Star Rating provides a summary of certain existing hospital quality information on Medicare.gov based on publicly available quality measure results reported through CMS’ hospital quality measurement programs, by assigning hospitals between one and five stars, in a way that is simple and easy for patients to understand. Measures reported on the provider comparison tool on Medicare.gov (https://www.medicare.gov/care-compare/) that meet the criteria for inclusion in the Overall Hospital Quality Star Rating are organized into five conceptually coherent measure groups: Safety of Care, Mortality, Readmission, and Patient Experience (all of which include outcome measures), and Timely and Effective Care (which includes a selection of process measures).

As part of the national commitment to improving patient safety, we sought feedback on whether hospitals that performed in the bottom quartile (lowest-performing 25%) in the Safety of Care measure group should be eligible to receive the highest 5-star rating. We are considering modifying the Overall Hospital Quality Star Rating methodology, specifically the Safety of Care measure group, to reinforce our dedication to emphasize patient safety across CMS.Â

We sought comments on potential modifications to the Safety of Care measure group in the Overall Hospital Quality Star Rating methodology. We requested input from interested parties on the following options: (1) reweighting the Safety of Care measure group; (2) applying a policy-based adjustment that reduces the Star Rating of any hospital in the lowest quartile of Safety of Care (based on at least three measures in the group) by one star; and (3) reweighting the Safety of Care measure group combined with a policy-based 4-star rating maximum on the Star Rating of any hospital in the lowest quartile of Safety of Care. In this final rule, we summarize the comments CMS received.Â

Medicaid and CHIP Continuous Eligibility

Section 5112 of Title V, subtitle B of the Consolidated Appropriations Act, 2023 (CAA, 2023) amended section 1902(e)(12) of the Act and added a new paragraph (K) to section 2107(e)(1) of the Act to make the previously optional, continuous eligibility policy a requirement under the state plan or a waiver of the state plan for children enrolled in Medicaid and CHIP, effective January 1, 2024. In this final rule, CMS has amended the Medicaid and CHIP regulations to codify the requirements of the CAA, 2023. Specifically, CMS is finalizing the requirement to provide 12 months of continuous eligibility for children under the age of 19 enrolled in Medicaid and CHIP. CMS is also finalizing a policy removing the previous options of applying continuous eligibility to a subgroup of enrollees or limiting continuous eligibility periods to less than 12 months. CMS is also removing failure to pay premiums as an optional exception to continuous eligibility in CHIP.

Medicaid Clinic Services’ Four Walls Exceptions

CMS amended the Medicaid clinic services’ regulation to authorize Medicaid coverage for clinic services furnished by IHS/Tribal clinics outside the “four walls” of their facility. In addition, states implementing the Medicaid clinic services’ benefit can opt to cover clinic services furnished outside the “four walls” of behavioral health clinics or clinics located in rural areas. For clinics located in rural areas, based on comments received, CMS is finalizing an approach to defining “rural area” where states will select either a definition used by a federal agency for programmatic purposes, or a definition adopted by a state agency with a role in setting state rural health policy.

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