On August 1, 2024, CMS issued the federal fiscal year (FFY) 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule, which includes the requirements to qualify for the Medicare low-volume inpatient adjustment. The Consolidated Appropriations Act, 2024 extended the low-volume adjustment definition and payment provisions only through a portion of FFY 2025. Through December 31, 2024, the provisions specify that a hospital qualifies as a low-volume hospital in FFY 2025 if it is more than 15 road miles from another subsection (d) hospital and has less than 3,800 total discharges. Beginning on January 1, 2025, the definition of a low-volume hospital will revert back to its original definition, which specifies that a low-volume hospital is more than 25 road miles from another hospital and has less than 200 total discharges.
As stated in the FFY 2025 final rule and similar to the requirements in prior years, a hospital receiving the low-volume hospital payment adjustment for FFY 2024 may continue to receive a low-volume hospital payment adjustment for FFY 2025 with a request to the Medicare Administrative Contractor (MAC) by verifying the hospital continues to meet the mileage criteria (of more than 15 road miles from another subsection (d) hospital) and the total discharge criterion (of less than 3,800 total discharges per its most recently submitted Medicare cost report prior to the beginning of FFY 2025).
If the hospital is requesting the low-volume adjustment for the first time, it must include sufficient documentation to establish that the hospital meets the applicable mileage and discharge data. For example, the hospital can include a Google Maps image with its application indicating that it meets the mileage requirements to the surrounding subsection (d) hospitals within a certain radius of the hospital.
According to CMS, the low-volume written request needs to be received by the MAC by September 1, 2024 for payments to be applied for its discharges for the FFY beginning October 1, 2024. If a hospital’s written request for low-volume hospital status for FFY 2025 is received after September 1, 2024, and if the MAC finds that the hospital meets the criteria to qualify as a low-volume hospital, the MAC will apply the low-volume hospital payment adjustment to determine the payment for the hospital’s FFY 2025 discharges, effective prospectively within 30 days of the MAC’s low-volume hospital status determination date.
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