CMS: Mitigating Drug Shortages, Addressing Inadequate Housing

The Centers for Medicare & Medicaid Services (CMS) has released a segment of the Inpatient Prospective Payment System (IPPS) final rule, addressing critical issues affecting patient care in hospitals across the nation.

The new policies focus on mitigating drug shortages and addressing the healthcare needs of patients with inadequate housing.

Addressing Drug Shortages

Drug shortages have impacted many hospitals, affecting the availability of essential medications such as antibiotics and emergency drugs. These shortages can lead to medication errors, delays in critical treatments, increased risks of hospital-acquired infections, and in-hospital mortality.

Consequently, this affects the quality of care and increases costs for the Medicare program, which must cover expenses for services that might have been avoidable if the necessary medications had been available.

To address this issue, CMS is finalizing a policy to provide separate payments under the IPPS for small, independent hospitals. These payments are intended to help these hospitals establish and maintain a buffer stock of essential medicines, serving as a preventive measure against future shortages.

Small, independent hospitals are particularly vulnerable to supply disruptions during drug shortages due to their limited resources compared to larger hospitals or those that are part of a chain organization. The new policy aims to ensure a more reliable and resilient supply of essential medicines for patients in these hospitals.

CMS plans to assess the program’s impact in the future and consider expanding and revising it as necessary to ensure the availability of essential medicines for all patients.

Supporting Patients with Inadequate Housing

Another significant aspect of the IPPS final rule is the change in the severity designation for diagnosis codes related to inadequate housing and housing instability. IPPS payments are based on the use of hospital resources in treating patients, considering the severity of illness, complexity of service, and resource consumption. Generally, a higher severity level designation of a diagnosis code results in a higher payment to reflect increased hospital resource use.

CMS conducted a data analysis using claims data, which revealed that cases involving inadequate housing and housing instability had higher average resource costs compared to similar cases without these diagnosis codes. Based on this analysis, CMS is finalizing the proposal to change the severity designation of seven ICD-10-CM diagnosis codes describing inadequate housing and housing instability from non-complication or comorbidity (Non CC) to complication or comorbidity (CC).

This policy builds on last year’s change in severity designation for diagnosis codes describing homelessness. By reclassifying these diagnosis codes, CMS aims to more accurately reflect the resource costs associated with treating patients facing housing challenges. This change ensures fair compensation for hospitals and improves the reliability and validity of coded data.

Conclusion

The policies finalized in the IPPS final rule on August 1 represent significant steps towards addressing critical issues in healthcare delivery. By providing separate payments to small, independent hospitals for maintaining essential medicines and recognizing the increased resource costs associated with treating patients with inadequate housing, CMS aims to foster a more resilient healthcare system.

These measures are intended to ensure that all patients receive the care they need, regardless of their circumstances.