Notice2023-22850
Medicare Program; CY 2024 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 17, 2023
Effective
January 1, 2024
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This notice announces the inpatient hospital deductible and the hospital and extended care services coinsurance amounts for services furnished in calendar year (CY) 2024 under Medicare's Hospital Insurance (Part A) program. The Medicare statute specifies the formulas used to determine these amounts. For CY 2024, the inpatient hospital deductible will be $1,632. The daily coinsurance amounts for CY 2024 will be as follows: $408 for the 61st through 90th day of hospitalization in a benefit period; $816 for lifetime reserve days; and $204 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period.
Full Text
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<title>Federal Register, Volume 88 Issue 199 (Tuesday, October 17, 2023)</title>
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[Federal Register Volume 88, Number 199 (Tuesday, October 17, 2023)]
[Notices]
[Pages 71551-71555]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-22850]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8083-N]
RIN 0938-AV11
Medicare Program; CY 2024 Inpatient Hospital Deductible and
Hospital and Extended Care Services Coinsurance Amounts
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the inpatient hospital deductible and
the hospital and extended care services coinsurance amounts for
services furnished in calendar year (CY) 2024 under Medicare's Hospital
Insurance (Part A) program. The Medicare statute specifies the formulas
used to determine these amounts. For CY 2024, the inpatient hospital
deductible will be $1,632. The daily coinsurance amounts for CY 2024
will be as follows: $408 for the 61st through 90th day of
hospitalization in a benefit period; $816 for lifetime reserve days;
and $204 for the 21st through 100th day of extended care services in a
skilled nursing facility in a benefit period.
DATES: The deductible and coinsurance amounts announced in this notice
are effective on January 1, 2024.
FOR FURTHER INFORMATION CONTACT: Suzanne Codespote, (410) 786-7737.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1813 of the Social Security Act (the Act) provides for an
inpatient hospital deductible to be subtracted from the amount payable
by Medicare for inpatient hospital services furnished to a beneficiary.
It also provides for certain coinsurance amounts to be subtracted from
the amounts payable by Medicare for inpatient hospital and extended
care services. Section 1813(b)(2) of the Act requires the Secretary of
the Department of Health and Human Services (the Secretary) to
determine and publish each year the amount of the inpatient hospital
deductible and the hospital and
[[Page 71552]]
extended care services coinsurance amounts applicable for services
furnished in the following calendar year (CY).
II. Computing the Inpatient Hospital Deductible for CY 2024
Section 1813(b) of the Act prescribes the method for computing the
amount of the inpatient hospital deductible. The inpatient hospital
deductible is an amount equal to the inpatient hospital deductible for
the preceding CY, adjusted by our best estimate of the payment-weighted
average of the applicable percentage increases (as defined in section
1886(b)(3)(B) of the Act) used for updating the payment rates to
hospitals for discharges in the fiscal year (FY) that begins on October
1 of the same preceding CY, and adjusted to reflect changes in real
case-mix. The adjustment to reflect real case-mix is determined on the
basis of the most recent case-mix data available. The amount determined
under this formula is rounded to the nearest multiple of $4 (or, if
midway between two multiples of $4, to the next higher multiple of $4).
Under section 1886(b)(3)(B)(i)(XX) of the Act, the percentage
increase used to update the payment rates for FY 2024 for hospitals
paid under the inpatient prospective payment system (IPPS) is the
inpatient hospital operating market basket percentage increase,
otherwise known as the IPPS market basket update, reduced by an
adjustment based on changes in economy-wide productivity (the
productivity adjustment) (see section 1886(b)(3)(B)(xi)(II) of the
Act). Under section 1886(b)(3)(B)(viii) of the Act, for FY 2024, the
applicable percentage increase for hospitals that do not submit quality
data as specified by the Secretary is reduced by one quarter of the
market basket update. We are estimating that after accounting for those
hospitals receiving the lower market basket update in the payment-
weighted average update, the calculated deductible will not be
affected, since most hospitals submit quality data and receive the full
market basket update. Section 1886(b)(3)(B)(ix) of the Act requires
that any hospital that is not a meaningful electronic health record
(EHR) user (as defined in section 1886(n)(3) of the Act) will have
three-quarters of the market basket update reduced by 100 percent for
FY 2017 and each subsequent FY. We are estimating that after accounting
for these hospitals receiving the lower market basket update, the
calculated deductible will not be affected, since most hospitals are
meaningful EHR users and are expected to receive the full market basket
update.
Under section 1886 of the Act, the percentage increase used to
update the payment rates (or target amounts, as applicable) for FY 2024
for hospitals excluded from the inpatient prospective payment system is
as follows:
<bullet> The percentage increase for long-term care hospitals is
the LTCH market basket percentage increase reduced by the productivity
adjustment (see section 1886(m)(3)(A) of the Act). In addition, these
hospitals may also be impacted by the quality reporting adjustments and
the site-neutral payment rates (see sections 1886(m)(5) and 1886(m)(6)
of the Act).
<bullet> The percentage increase for inpatient rehabilitation
facilities is the IRF market basket percentage increase reduced by the
productivity adjustment in accordance with section 1886(j)(3)(C)(ii)(I)
of the Act. In addition, these hospitals may also be impacted by the
quality reporting adjustments (see section 1886(j)(7) of the Act).
<bullet> The percentage increase for inpatient psychiatric
facilities is the IPF market basket percentage increase reduced by the
productivity adjustment (see section 1886(s)(2)(A)(i) of the Act). In
addition, these hospitals may also be impacted by the quality reporting
adjustments (see section 1886(s)(4) of the Act).
<bullet> The percentage increase used to update the target amounts
for other types of hospitals that are excluded from the inpatient
prospective payment system and that are paid on a reasonable cost
basis, subject to a rate-of-increase ceiling, is the IPPS operating
market basket percentage increase, which is described at section
1886(b)(3)(B)(ii)(VIII) of the Act and 42 CFR 413.40(c)(3). These other
types of hospitals include cancer hospitals, children's hospitals,
extended neoplastic disease care hospitals, religious nonmedical health
care institutions, and hospitals located outside the 50 states, the
District of Columbia, and Puerto Rico.
The IPPS operating market basket percentage increase for FY 2024 is
3.3 percent and the productivity adjustment is 0.2 percentage point, as
announced in the final rule that appeared in the Federal Register on
August 28, 2023, entitled ``Hospital Inpatient Prospective Payment
Systems for Acute Care Hospitals and the Long-Term Care Hospital
Prospective Payment System and Policy Changes and Fiscal Year 2024
Rates; Quality Programs and Medicare Promoting Interoperability Program
Requirements for Eligible Hospitals and Critical Access Hospitals;
Rural Emergency Hospital and Physician-Owned Hospital Requirements; and
Provider and Supplier Disclosure of Ownership; and Medicare
Disproportionate Share Hospital (DSH) Payments: Counting Certain Days
Associated With Section 1115 Demonstrations in the Medicaid Fraction''
(88 FR 59035). Therefore, the percentage increase for hospitals paid
under the inpatient prospective payment system that submit quality data
and are meaningful EHR users is 3.1 percent (that is, the FY 2024
market basket update of 3.3 percent less the productivity adjustment of
0.2 percentage point). The average payment percentage increase for
hospitals excluded from the inpatient prospective payment system is
3.35 percent. This average includes long-term care hospitals, inpatient
rehabilitation facilities, inpatient psychiatric facilities, and other
hospitals excluded from the inpatient prospective payment system.
Weighting these percentages in accordance with payment volume, our best
estimate of the payment-weighted average of the increases in the
payment rates for FY 2024 is 3.13 percent.
To develop the adjustment to reflect changes in real case-mix, we
first calculated an average case-mix for each hospital that reflects
the relative costliness of that hospital's mix of cases compared with
those of other hospitals. We then computed the change in average case-
mix for hospitals paid under the Medicare inpatient prospective payment
system in FY 2023 compared with FY 2022. (We excluded from this
calculation hospitals whose payments are not based on the inpatient
prospective payment system because their payments are based on
alternate prospective payment systems or reasonable costs.) We used
Medicare bills from prospective payment hospitals that we received as
of July 2023. These bills represent a total of about 6.0 million
Medicare discharges for FY 2023 and provide the most recent case-mix
data available at this time. Based on these bills, the change in
average case-mix in FY 2023 is -1.0 percent. Based on these bills and
past experience, we expect the overall FY 2023 case mix change to be -
1.0 percent as the year progresses and more FY 2023 data become
available.
Section 1813 of the Act requires that the inpatient hospital
deductible be adjusted only by that portion of the case mix change that
is determined to be real. Real case-mix is that portion of case-mix
that is due to changes in the mix of cases in the hospital and not due
to coding optimization. COVID-19 has complicated the determination of
real case-mix changes. COVID-19 cases
[[Page 71553]]
typically have higher-weighted MS DRGs, which would cause a real
increase in case-mix, while hospitals have experienced a reduction in
the number of lower-weighted cases, which would also cause a real
increase in case-mix. The lower number of COVID-19 cases in 2023
compared with the last several years would therefore mean a decrease in
real case mix. Because of the uncertainty, we are assuming that all of
the recently observed care is not due to coding optimization and that
all of the -1.0 percent is real.
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
3.13 percent, and the real case-mix adjustment factor for the
deductible is -1.0 percent. Accordingly, using the statutory formula as
stated in section 1813(b) of the Act, we calculate the inpatient
hospital deductible for services furnished in CY 2024 to be $1,632.
This deductible amount is determined by multiplying $1,600 (the
inpatient hospital deductible for CY 2023 (86 FR 64217)) by the
payment-weighted average increase in the payment rates of 1.0313
multiplied by the decrease in real case-mix of 0.99, which equals
$1,633.58 and is rounded to $1,632. (based on rounding to the nearest
multiple of 4).
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for CY 2024
The coinsurance amounts provided for in section 1813 of the Act are
defined as fixed percentages of the inpatient hospital deductible for
services furnished in the same CY. The increase in the deductible
generates increases in the coinsurance amounts. For inpatient hospital
and extended care services furnished in CY 2024, in accordance with the
fixed percentages defined in the law, the daily coinsurance for the
61st through 90th day of hospitalization in a benefit period will be
$408 (one-fourth of the inpatient hospital deductible as stated in
section 1813(a)(1)(A) of the Act); the daily coinsurance for lifetime
reserve days will be $816 (one-half of the inpatient hospital
deductible as stated in section 1813(a)(1)(B) of the Act); and the
daily coinsurance for the 21st through 100th day of extended care
services in a skilled nursing facility (SNF) in a benefit period will
be $204 (one-eighth of the inpatient hospital deductible as stated in
section 1813(a)(3) of the Act).
IV. Cost to Medicare Beneficiaries
Table 1 summarizes the deductible and coinsurance amounts for CYs
2023 and 2024, as well as the number of each that is estimated to be
paid.
Table 1--Medicare Part A Deductible and Coinsurance Amounts for CYs 2023 and 2024
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Value Number paid (in millions)
Type of cost sharing ---------------------------------------------------------------
2023 2024 2023 2024
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Inpatient hospital deductible................... $1,600 $1,632 5.15 5.05
Daily coinsurance for 61st-90th day............. 400 408 1.29 1.26
Daily coinsurance for lifetime reserve days..... 800 816 0.64 0.63
SNF coinsurance................................. 200 204 26.99 25.28
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The estimated total decrease in costs to beneficiaries is about
$240 million (rounded to the nearest $10 million) because of (1) the
increase in the deductible and coinsurance amounts and (2) the decrease
in the number of deductibles and daily coinsurance amounts paid. We
determine the decrease in cost to beneficiaries by calculating the
difference between the CY 2023 and CY 2024 deductible and coinsurance
amounts multiplied by the estimated decrease in the number of
deductible and coinsurance amounts paid.
V. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment prior to a rule taking
effect in accordance with section 1871 of the Act and section 553(b) of
the Administrative Procedure Act (APA). Section 1871(a)(2) of the Act
provides that no rule, requirement, or other statement of policy (other
than a national coverage determination) that establishes or changes a
substantive legal standard governing the scope of benefits, the payment
for services, or the eligibility of individuals, entities, or
organizations to furnish or receive services or benefits under Medicare
shall take effect unless it is promulgated through notice and comment
rulemaking. Unless there is a statutory exception, section 1871(b)(1)
of the Act generally requires the Secretary to provide for notice of a
proposed rule in the Federal Register and provide a period of not less
than 60 days for public comment before establishing or changing a
substantive legal standard regarding the matters enumerated by the
statute. Similarly, under 5 U.S.C. 553(b) of the APA, the agency is
required to publish a notice of proposed rulemaking in the Federal
Register before a substantive rule takes effect. Section 553(d) of the
APA and section 1871(e)(1)(B)(i) of the Act usually require a 30-day
delay in effective date after issuance or publication of a rule,
subject to exceptions. Sections 553(b)(B) and 553(d)(3) of the APA
provide for exceptions from the advance notice and comment requirement
and the delay in effective date requirements. Sections 1871(b)(2)(C)
and 1871(e)(1)(B)(ii) of the Act also provide exceptions from the
notice and 60-day comment period and the 30-day delay in effective
date. Section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act
expressly authorize an agency to dispense with notice and comment
rulemaking for good cause if the agency makes a finding that notice and
comment procedures are impracticable, unnecessary, or contrary to the
public interest.
The annual inpatient hospital deductible and the hospital and
extended care services coinsurance amounts announcement set forth in
this notice does not establish or change a substantive legal standard
regarding the matters enumerated by the statute or constitute a
substantive rule, which would be subject to the notice requirements in
section 553(b) of the APA. However, to the extent that an opportunity
for public notice and comment could be construed as required for this
notice, we find good cause to waive this requirement.
Section 1813(b)(2) of the Act requires publication of the inpatient
hospital deductible and the hospital and extended care services
coinsurance amounts between September 1 and September 15 of the year
preceding the year to which they will apply. Further, the statute
requires that the agency
[[Page 71554]]
determine and publish the inpatient hospital deductible and hospital
and extended care services coinsurance amounts for each CY in
accordance with the statutory formulas, and we are simply notifying the
public of the changes to the deductible and coinsurance amounts for CY
2024. We have calculated the inpatient hospital deductible and hospital
and extended care services coinsurance amounts as directed by the
statute; the statute establishes both when the deductible and
coinsurance amounts must be published and what information must be
considered by the Secretary in establishing the deductible and
coinsurance amounts, and therefore we do not have any discretion in
that regard. We find notice and comment procedures to be unnecessary
for this notice and we find good cause to waive such procedures under
section 553(b)(B) of the APA and section 1871(b)(2)(C) of the Act, if
such procedures may be construed to be required at all. Through this
notice, we are simply notifying the public of the updates to the
inpatient hospital deductible and the hospital and extended care
services coinsurance amounts, in accordance with the statute, for CY
2024. As such, we note that even if notice and comment procedures were
required for this notice, for the reasons stated above, we would find
good cause to waive the delay in effective date of the notice, as
additional delay would be contrary to the public interest under section
1871(e)(1)(B)(ii) of the Act. Publication of this notice is consistent
with section 1813(b)(2) of the Act, and we believe that any potential
delay in the effective date of the notice, if such delay were required
at all, could cause unnecessary confusion both for the agency and
Medicare beneficiaries.
VI. Collection of Information Requirements
This document does not impose information collection requirements--
that is, reporting, recordkeeping, or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
VII. Regulatory Impact Analysis
Although this notice does not constitute a substantive rule, we
nevertheless prepared this Regulatory Impact Analysis section in the
interest of ensuring that the impacts of this notice are fully
understood.
A. Statement of Need
This notice announces the Medicare Part A inpatient hospital
deductible and associated coinsurance amounts for hospital and extended
care services applicable for care provided in CY 2024, as required by
section 1813 of the Act. It also responds to section 1813(b)(2) of the
Act, which requires the Secretary to provide for publication of these
amounts in the Federal Register between September 1 and September 15 of
the year preceding the year to which they will apply. As this statutory
provision prescribes a detailed methodology for calculating these
amounts, we do not have the discretion to adopt an alternative approach
on these issues.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), Executive Order 14094 entitled ``Modernizing
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the
Social Security Act, section 202 of the Unfunded Mandates Reform Act of
1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C.
804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). The
Executive Order 14094 entitled ``Modernizing Regulatory Review''
(hereinafter, the Modernizing E.O.) amends section 3(f)(1) of Executive
Order 12866 (Regulatory Planning and Review). The amended section 3(f)
of Executive Order 12866 defines a ``significant regulatory action'' as
an action that is likely to result in a rule (1) having an annual
effect on the economy of $200 million or more in any 1 year (adjusted
every 3 years by the Administrator of the Office of Information and
Regulatory Affairs (OIRA) for changes in gross domestic product) or
adversely affecting in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, territorial, or tribal governments
or communities; (2) creating a serious inconsistency or otherwise
interfering with an action taken or planned by another agency; (3)
materially altering the budgetary impacts of entitlement grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising legal or policy issues, for which a centralized
review would meaningfully further the President's priorities, or the
principles set forth in this Executive order, as specifically
authorized in a timely manner by the Administrator of OIRA in each
case.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory action/s and/or significant effects as per
section 3(f)(1) of Executive Order 12866 ($200 million or more in any 1
year). Based on our estimates OMB's Office of Information and
Regulatory Affairs has determined that this rulemaking is significant
per section 3(f)(1) as measured by the $200 million or more in any 1
year, and hence also a major rule under Subtitle E of the Small
Business Regulatory Enforcement Fairness Act of 1996 (also known as the
Congressional Review Act).
As stated in section IV of this notice, we estimate that the total
decrease in costs to beneficiaries associated with this notice is about
$240 million because of (1) the increase in the deductible and
coinsurance amounts and (2) the decrease in the number of deductibles
and daily coinsurance amounts paid.
C. Accounting Statement and Table
As required by OMB Circular A-4 (available at <a href="https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf">https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf</a>), in Table 2, we have prepared an accounting
statement showing the estimated total decrease in costs to
beneficiaries of about $240 million, which is due to the increase in
the deductible and coinsurance amounts and the decrease in the number
of deductibles and daily coinsurance amounts paid. As stated in section
IV of this notice, we determined the decrease in cost to beneficiaries
by calculating the difference between the CY 2023 and CY 2024
deductible and coinsurance amounts multiplied by the estimated decrease
in the number of deductible and coinsurance amounts paid.
[[Page 71555]]
Table 2--Estimated Transfers for CY 2024 Deductible and Coinsurance
Amounts
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Category Transfers
------------------------------------------------------------------------
Annualized monetized transfers......... -$240 million.
From Whom to Whom...................... Beneficiaries to Providers.
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D. Regulatory Flexibility Act
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by being nonprofit organizations
or by meeting the Small Business Administration's definition of a small
business (having revenues of less than $9.0 million to $47 million in
any 1 year). Individuals and states are not included in the definition
of a small entity. This annual notice announces the Medicare Part A
deductible and coinsurance amounts for CY 2024 and will have an impact
on certain Medicare beneficiaries. As a result, we are not preparing an
analysis for the RFA because the Secretary has certified that this
notice will not have a significant economic impact on a substantial
number of small entities.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 604 of the RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a metropolitan statistical area and has fewer
than 100 beds. This annual notice announces the Medicare Part A
deductible and coinsurance amounts for CY 2024 and will have an impact
on certain Medicare beneficiaries. As a result, we are not preparing an
analysis for section 1102(b) of the Act because the Secretary has
certified that this notice will not have a significant impact on the
operations of a substantial number of small rural hospitals.
E. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2023, that
threshold is approximately $177 million. This notice will not impose a
mandate that will result in the expenditure by state, local, and Tribal
Governments, in the aggregate, or by the private sector, of more than
$177 million in any 1 year.
F. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. This notice will not have a substantial direct effect on
state or local governments, preempt state law, or otherwise have
Federalism implications.
G. Congressional Review
This notice is subject to the Congressional Review Act provisions
of the Small Business Regulatory Enforcement Fairness Act of 1996 (5
U.S.C. 801 et seq.) and has been transmitted to the Congress and the
Comptroller General for review.
Chiquita Brooks-LaSure, Administrator of the Centers for
Medicare & Medicaid Services, approved this document on October 11,
2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-22850 Filed 10-12-23; 4:15 pm]
BILLING CODE 4120-01-P
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