2025 IPPS Final Rule: What Your Hospital Needs to Know

CMS finalized the IPPS ruling on August 1, and with it came major changes for hospitals. Here’s our recap of the most important takeaways, but, as always, we recommend reviewing the official 2025 IPPS final rule (or, if you’re super crunched for time, the final rule fact sheet and the TEAM fact sheet) as you prepare for what’s ahead.

Inpatient Quality Reporting (IQR) Program Changes

eCQMs

CMS is incrementally increasing the electronic clinical quality measures (eCQMs) requirements from six mandatory eCQMs (by 2024) to eight (by 2026), then to nine (by 2027), and finally to 11 (by 2028). Although a more aggressive schedule had been proposed, CMS ultimately decided on an extended timeframe.

The new required eCQMs are all around Hospital Harm (Patient Safety).

In addition, CMS will be adding two new eCQMs to its IQR program inventory, both of which will be available in 2026. Notably, CMS has once again created eCQMs in the category of Hospital Harm. By 2026, there will be seven specific Hospital Harm eCQMs, which appear poised to replace the traditional Patient Safety Indicator (PSI) claims measures. Stay tuned for more guidance from us on each of these measures in the coming months.

NEW: Hospital Harm – Falls with Injury eCQM

Available 2026

This is a brand-new measure that assesses the number of inpatient hospitalizations where at least one fall with a major or moderate injury occurs for patients aged 18 years and older. This is a risk-adjusted measure and is reported as the number of inpatient hospitalizations with falls with moderate or major injury per 1,000 patient days.

NEW: Hospital Harm – Post-operative Respiratory Failure eCQM

Available 2026

This is a brand-new measure that assesses the number of elective inpatient hospitalizations for patients aged 18 years and older without an obstetrical condition who have a procedure resulting in postoperative respiratory failure (PRF) within 30 days of the first OR procedure.

eCQM Auditing Process (Validation)

Beginning in 2025, CMS will modify the data validation (audit) scoring system to include two distinct validation scores: one for clinical processes of care (CPoC) measures and one for eCQMs. Each score will carry an equal weight (50%). Hospitals must achieve passing scores in both measure types to secure the full annual payment update.

Previously, eCQM validation was assigned a weight of zero to allow hospitals time to gain experience with eCQM reporting and validation. However, hospitals that undergo audits from now on will have their eCQMs assessed for data accuracy, with a minimum acceptable accuracy threshold set at 75%.

Hybrid Measures

CMS did something they don’t normally do. In the 2025 OPPS Proposed Rule, they proposed a change to an IPPS program (the IQR program). CMS proposed that this hybrid reporting cycle (July 1, 2023 – June 30, 2024, Reporting Year 2024) remains voluntary instead of mandatory, as is the current status. Here’s the kicker; you won’t know if this proposal is finalized until after the submission window closes (October 1, 2024). Which means everyone still must submit their hybrid measures this year or risk the proposal not being finalized. They reference this proposal in the 2025 IPPS Final Rule.

Structural Measures

Hospitals must submit two new Structural measures in 2025.

NEW: Patient Safety Structural Measure

Required 2025

This measure assesses how well hospitals have implemented strategies and practices to strengthen their systems and culture for safety.

Hospitals attest to each of the five domains and corresponding elements representing complementary but separate safety commitments.

1. Domain 1: Leadership Commitment to Eliminating Preventable Harm

2. Domain 2: Strategic Planning & Organizational Policy

3. Domain 3: Culture of Safety & Learning Health Systems

4. Domain 4: Accountability & Transparency

5. Domain 5: Patient & Family Engagement

Each domain in the scoring system is worth 1 point, allowing for a total score ranging from 0 to 5. Hospitals are required to submit their data annually, adhering to the procedures outlined by the CDC's National Healthcare Safety Network (NHSN). Hospitals must attest starting in 2025, with the results being publicly posted in the fall of 2026.

NEW: Age-Friendly Hospital Structural Measure

Required 2025

This measure assesses the hospital’s commitment to improving care for patients 65 years or older receiving services in the hospital, operating room, or emergency department.

Hospitals attest to each of the five domains and corresponding elements representing complementary but separate safety commitments.

1. Domain 1: Eliciting Patient Healthcare Goals

2. Domain 2: Responsible Medication Management

3. Domain 3: Frailty Screening and Intervention

4. Domain 4: Social Vulnerability

5. Domain 5: Age-Friendly Care Leadership

Each domain in the scoring system is worth 1 point, allowing for a total score ranging from 0 to 5. Hospitals are required to submit their data via HQR’s web-based data collection tool. Hospitals must attest starting in 2025.

NHSN HAI Measures

CMS is proposing to add two new mandatory NHSN healthcare-associated infection (HAI) measures. Both beginning in Calendar Year 2026 reporting period

NEW: Catheter-Associated Urinary Tract Infection (CAUTI) Standardized Infection Ratio Stratified for Oncology Locations measure (CAUTI-ONC)

Required 2026

This risk-adjusted measure assesses the number of annually observed CAUTIs among acute care hospital inpatients in oncology wards. This observed number is divided by the number of predicted CAUTIs. The Standardized Infection Ratio (SIR) compares the actual number of cases to the expected number of cases.

Hospitals must collect the numerator and denominator for the CAUTI-ONC measure each month and submit the data to the NHSN. The data from all 12 months will be calculated into quarterly reporting periods, which would then be used to determine the SIR for CMS performance calculation and public reporting purposes.

NEW: Central Line-Associated Bloodstream Infection Standardized Infection (CLABSI) Ratio Stratified for Oncology Locations measure (CLABSI-ONC)

Required 2026

This is also a risk-adjusted measure. It’s essentially the same as above but for CLABSI. The measures assess the number of annually observed CLABSIs among acute care hospital inpatients in oncology wards. This observed number is divided by the number of predicted CLABSIs. And the Standardized Infection Ratio (SIR) compares the actual number of cases to the expected number of cases. The submission process is the same as the CAUTI-ONC measure above.

New Conditions of Participation (CoPs) Requirements: COVID-19, RSV, Influenza reporting

Beginning on November 1, 2024, hospitals and CAHs must electronically report certain data elements about COVID-19, influenza, and respiratory syncytial virus (RSV) on a weekly basis. The information includes confirmed infections of respiratory illnesses, including COVID-19, influenza, and RSV, among hospitalized patients, hospital bed census, and capacity. Additionally, you must submit limited patient demographic information, including age.

HACHAPS

CMS has modified the HCAHPS measures and added three new categories, which they call “sub-measures” The sub-measures are Care Coordination, Restfulness of Hospital Environment, and Information about Symptoms. These three new sub-measures will be publicly reported beginning in October 2026.

REMOVE

They will remove the “Care Transition” reporting on Care Compare in January 2026.

They will remove these four measures from the survey in 2025.

1. During this hospital stay, after you pressed the call button, how often did you get help as soon as you wanted it?

2. During this hospital stay, staff took my preferences and those of my family or caregiver into account in deciding what my health care needs would be when I left.

3. When I left the hospital, I had a good understanding of the things I was responsible for in managing my health.

4. When I left the hospital, I clearly understood the purpose for taking each of my medications.

ALTER

The “Responsiveness of Hospital Staff” sub-measure would be altered starting in January 2025, with the “Call Button” questions being removed from the survey and a new “Get Help” question being added.

ADD

They are adding seven new measures to the survey in 2025.

1. During this hospital stay, how often were you able to get the rest you needed?

2. During this hospital stay, did doctors, nurses and other hospital staff help you to rest and recover?

3. During this hospital stay, how often were doctors, nurses and other hospital staff informed and up-to-date about your care?

4. During this hospital stay, how often did doctors, nurses and other hospital staff work well together to care for you?

5. Did doctors, nurses or other hospital staff work with you and your family or caregiver in making plans for your care after you left the hospital?

6. During this hospital stay, when you asked for help right away, how often did you get help as soon as you needed?

7. Did doctors, nurses or other hospital staff give your family or caregiver enough information about what symptoms or health problems to watch for after you left the hospital?

Claims Measures

CMS will replace the PSI-04 Claims measure with a new claims measure called the Thirty-day Risk-Standardized Death Rate among Surgical Inpatients with Complications (Failure-to-Rescue) claims-based measure beginning with the July 1, 2023 – June 30, 2025, reporting period, which impacts the FY 2027 payment determination.

CMS will remove the four payment claims measures and replace them with the Medicare Spending per Beneficiary (MSPB) measure.

1. AMI Payment Hospital-level, Risk-Standardized Payment Associated with a 30-Day Episode of Care for Acute Myocardial Infarction (performance period July 1, 2021 – June 30, 2024)

2. HF Payment Hospital-level, Risk-Standardized Payment Associated with a 30-Day Episode of Care for Heart Failure (performance period July 1, 2021 – June 30, 2024)

3. PN Payment Hospital-level, Risk-Standardized Payment Associated with a 30-Day Episode of Care for Pneumonia (performance period July 1, 2021 – June 30, 2024)

4. THA/TKA Payment Hospital-level, Risk-Standardized Payment Associated with a 30-day Episode of Care for Elective Primary Total Hip Arthroplasty and/or Total Knee Arthroplasty (performance period April 1, 2021 – March 31, 2024)

Promoting Interoperability Program Changes

CMS is proposing to modify the PI program with basically every change from the IQR program. In addition, starting in 2025, they are splitting out the Antimicrobial Use and Resistance (AUR) Surveillance measure into two measures.

1. Antimicrobial Use (AU) Surveillance

2. Antimicrobial Resistance (AR) Surveillance

CMS is also proposing to increase the scoring threshold from 60 points to 70 points in 2025 and finally to 80 points in 2026.

Hospital Value-Based Purchasing (HVBP) Program Changes

CMS is proposing three changes to the HVBP program.

• From FY 2027 to FY 2029, the scoring for the HCAHPS Survey in the Person and Community Engagement area will only consider the six original parts of the survey. This is while the IQR HCAHPS updates are adopted and publicly reported.

• Starting in FY 2030, they will include new parts of the HCAHPS Survey scoring in the Person and Community Engagement area. And they will update the scoring to include those changes.

• Adopt the Patient Safety Structural measure beginning in Calendar Year 2025.

• Move up the start date for publicly displaying hospital performance on the Hospital Commitment to Health Equity measure to January 2026.

TEAM Model Program

Transforming Episode Accountability Model

CMS has finalized a brand-new bundled payment model. The hospitals selected are required to participate beginning January 1, 2026, through December 31, 2030. Hospitals may also elect to voluntarily participate if they weren’t included in the selection list. The model pairs episode-based pricing linked to quality measure performance.

The TEAM model only includes five specific episodes.

1. Coronary Artery Bypass Graft (CABG)

2. Lower Extremity Joint Replacement (LEJR)

3. Major Bowel Procedure

4. Surgical Hip/Femur Fracture Treatment (SHFFT)

5. Spinal Fusion

Your performance on these Quality measures will determine your payment or penalty.

1. (For all episodes) Hybrid Hospital-Wide All-Cause Readmission Measure

   Year 1 = July 1, 2024 – June 30, 2025

2. (For all episodes) PSI 90

   Year 1 = July 1, 2023 – June 30, 2025

3. (For LEJR episodes only) THA/TKA PRO-PM (Inpatient)

   Year 1 = July 1, 2024 – June 30, 2025

TEAM is mandatory for acute care hospitals who bill for these episodes, are paid under the IPPS, have a CMS Certification Number (CCN), and have a primary address located in one of the ~200 geographic areas selected for participation in TEAM.

Download: TEAM Eligible Geographic Areas List >>

In this new model, you could make or lose money (for those episodes) based on how well you performed on those quality measures and how much you spent. Year 1, you get only an upside for good performance. After that, you could gain or lose money based on those factors.

For more information on TEAM, read our article What is TEAM? An overview of the CMS TEAM Model.