Availability of the List of Essential Medicines Considered to be in Shortage for the Purposes of the Recently Finalized Separate IPPS Payment for Establishing and Maintaining Access to Essential Medicines

On Thursday, August 1, 2024, CMS issued the fiscal year (FY) 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) final rule. As part of the final rule, CMS finalized a Separate IPPS Payment for Establishing and Maintaining Access to Essential Medicines (89 FR 69387). Under this policy, small, independent hospitals of 100 beds or fewer that are not part of a chain organization may receive payment for the IPPS shares of the additional costs to voluntarily establish and maintain a 6-month buffer stock of one or more of 86 essential medicines.

In the final rule, CMS stated that “[w]e intend to make it clear to hospitals on or about the start of each calendar year quarter which drugs are or are not in shortage for the purposes of eligibility for separate payment for the costs of establishing or maintaining their respective buffer stocks” (89 FR 69399). Accordingly, CMS will post on its website a list of essential medicines considered to be in shortage for the purposes of this policy. As also stated in the final rule, hospitals will be informed “of all eligible medicines and their associated shortage status on a calendar quarter basis on or about the start of each quarter” (89 FR 69396). CMS intends to update the shortage status of the list of 86 essential medicines on or about the start of each calendar year quarter, i.e., October 1, January 1, April 1, and July 1. Updates to the list of medicines considered to be in shortage for the purposes of our policy will take effect on the first day of each respective calendar year quarter.