Biden Ties Medicare Reimbursement to Sepsis Treatment

Aaron O’Neill

Associate Editor

Loyola University Chicago School of Law, JD 2024


The Centers for Medicare and Medicaid Services (CMS), under the Department of Health and Human Services (HHS), finalized  CMS-1785-P in August, a rule that links Medicare reimbursement to the treatment of sepsis. Previously, hospitals were required to report on their sepsis treatment patients, but there was no penalty for not adhering to treatment guidelines. Beginning in Fall 2024, hospitals must meet the specific treatment benchmarks integrated into Medicare’s Hospital Value-Based Purchasing Program (MHVBPP) specifically the provisions outlined in the Severe Sepsis/Septic Shock Management Bundle (SEP-1).  Failing to meet these benchmarks could result in significant financial losses for hospitals, ranging from thousands to millions of dollars for larger entities. While hospitals should presently be aware of these requirements and implement plans to meet them, there are concerns about whether the proposed rule is the optimal solution for improving outcomes for sepsis patients.

What are hospitals required to do?

The new rule imposes a reporting and compliance requirement that can result in a reduction in reimbursement percentage if the guidelines are not met. In the past, failing to meet these requirements was not penalized; only failing to report could result in reimbursement penalties.  

Under the measurement specifications (chart on rule printed page 27029 of MHVBPP), treatment requirements are categorized by timeframe. In the first three hours of severe sepsis presentation, the clinicians must (1) measure the initial lactate level, (2) administer broad spectrum antibiotics, and (3) conduct blood cultures before administering antibiotics. If the initial lactate is elevated, clinicians must repeat the lactate level measurement within six hours of initial presentation. Within three hours of initial hypotension or septic shock, providers must perform resuscitation with 30 mL/kg crystalloid fluids. If hypotension persists after fluid administration, vasopressors must be administered within six hours of septic shock presentation. Lastly, within six hours of septic shock, if hypotension continues after fluid administration or initial lactate measurement, they must reevaluate volume status and tissue perfusion.

What is CMS aiming to accomplish?

Sepsis, stemming from fungal, viral, or bacterial infections, is highly deadly, killing approximately 1.7 million people annually. Timely action is critical for patient survival, yet 270,000 patients succumb to this infection each year. Consequently, the administration aims to improve outcomes and survival rates for affected patients by penalizing providers for failing to meet CMS treatment guidelines.

The goal is that requiring a timely response to symptoms will halt the progression of sepsis before it can progress into severe sepsis, septic shock, and death. CMS is leveraging its negotiation power to enforce treatment protocols and influence patient outcomes, particularly as many providers continue to face financial challenges.

Are CMS’s guidelines appropriate?

CMS-1785-P has faced substantial criticism regarding its effectiveness in achieving desired outcomes. The AMA and Infectious Disease Society (IDS) have both opposed the rule and advocated for alternative guidelines. They, along with many others, argue that the mandate places significant strain on healthcare providers to provide a bundle of care within three hours of potential symptoms. Moreover, there is concern that the rapid administration of antibiotics without proper diagnosis may lead to overuse and antibiotic resistance. Additionally, they worry the measures do not consider that many serious conditions present similarly to sepsis.

Supporting these arguments, independent analysis has shown that compliance with the treatment standards does not significantly impact patient outcomes. Rather, as suspected, it results in increased antibiotic use, lab testing, and fluid administration. IDS recommends that CMS focus on diagnostic strategies, comprehensive hospital care, and rehabilitation treatment plans for sepsis survivors to reduce mortality rates, rather than strict treatment guidelines for initial presentation.

In addition to the AMA and IDS, the Pediatric Infectious Diseases Society, the Society for Healthcare Epidemiology of America, the Society of Hospital Medicine, and the Society of Infectious Diseases Pharmacists all oppose the new part of the rule. In an article from Relias Media, Dorothy Brooks noted that this coalition has suggested that “increasing the focus on the SEP-1 bundle risks diverts attention and resources from more effective measures and comprehensive sepsis care. Instead, the group maintained that a better approach is for CMS to retire SEP-1 and focus on new sepsis metrics that focus on patient outcomes.”

Where do we stand?

For now, hospitals’ compliance, risk management, and billing/reimbursement departments should thoroughly review CMS-1785-P to offer guidance to clinical staff and update their internal sepsis treatment protocols. Failing to meet CMS guidelines and report properly can significantly impact reimbursement percentages, particularly for smaller entities, which is especially concerning given the current financial climate.

However, considering the research and current stance of national medical institutions, providers should continue to invest in advocacy, research and policies addressing other aspects of sepsis treatment. Studies indicate that these specific guidelines have minimal impact on mortality outcomes and are likely to undergo further modifications, especially in the wake of medical coalition groups’ criticism. It is evident that CMS prioritizes sepsis treatment, so by adhering to current guidelines and addressing other areas of the treatment process, providers may regain some negotiation leverage with CMS in the future.