HHS Unveils Comprehensive Healthcare Reforms to Boost Equity and Quality

The US Department of Health and Human Services (HHS) has announced updates to Medicare payments and policies to improve healthcare accessibility, equity, and quality for millions of Americans, according to a press release by the HHS.

The fiscal year 2025 rule update, issued by the Centers for Medicare & Medicaid Services (CMS), introduces significant reforms to inpatient and long-term care (LTC) hospitals.

Under the new guidelines, acute care hospitals meeting specific criteria will see a 2.9% increase in operating payment rates. This adjustment is expected to boost hospital payments by an estimated $2.9 billion. LTC hospitals will benefit from a 3.0% increase in standard federal payment rates, translating to a projected $45 million rise in overall payments.

The reforms place a strong emphasis on supporting underserved communities. Hospitals will receive higher payments for treating patients experiencing housing insecurity, acknowledging the additional resources required for their care. Furthermore, LTC hospitals will be required to report on social determinants of health, including housing, food stability, and transportation access.

“HHS continues to make health care more accessible and equitable. Every American should be able to get the care they need, regardless of whether they are struggling to afford their rent, the color of their skin, or what else is going on in the world,” said HHS Secretary Xavier Becerra. To address drug shortages, particularly in rural areas, the rule introduces separate payments for small independent hospitals to maintain essential medicine stocks. The update also increases new technology add-on payments to improve access to innovative treatments, such as gene therapy for sickle cell disease.

New quality initiatives are focusing on patient safety. These include digital measures for patient harm events, expanded infection monitoring in oncology wards, and structural measures to promote safety and age-friendly care.

Learning from the COVID-19 pandemic, CMS is implementing a streamlined data reporting structure for respiratory illnesses, enhancing the health care system's ability to respond to future public health emergencies.

In a bold move towards value-based care, CMS announced the Transforming Episode Accountability Model (TEAM), a 5-year mandatory program starting in January 2026. This model aims to reduce Medicare expenditures while maintaining or improving care quality for 5 common, costly procedures.

“Before and after surgery, people on Medicare often experience fragmented care, especially following hospital discharge. This can lead to complications, prolonged recovery, unnecessary care, and even readmissions,” said Liz Fowler, CMS Deputy Administrator and Director of the CMS Innovation Center. “By bundling all the costs of care for an episode, this model is designed to incentivize care coordination, improve patient care transitions and outcomes, and decrease the risk of an avoidable readmission.”

Reference

US Department of Health and Human Services. HHS finalizes new policies to support underserved communities, mitigate drug shortages, and promote patient safety in hospitals. Published August 1, 2024. Accessed August 22, 2024. https://www.hhs.gov/about/news/2024/08/01/hhs-finalizes-new-policies-support-underserved-communities-mitigate-drug-shortages-promote-patient-safety-hospitals.html