What’s inside:
The new CMS IPPS 2025 rule offers a game-changing add-on payment for small, independent hospitals. It’s a reward for maintaining a six-month buffer stock of essential medicines to combat drug shortages. But here’s the kicker: getting that money isn’t automatic. Hospitals must have airtight documentation.
This is where IDENTI Medical becomes your secret weapon. Learn how automated tracking systems do the heavy lifting, helping your hospital meet all the new CMS compliance standards with ease.
In response to rising drug shortages and acquisition costs, CMS finalized a new policy under the Inpatient Prospective Payment System (IPPS) for FY 2025, offering an add-on payment to help qualifying hospitals that purchase and maintain a six-month buffer stock of essential medicines.
But securing that reimbursement won’t happen automatically. Without reliable tracking methods, hospitals risk falling short on documentation and losing out on reimbursement. That’s where IDENTI Medical comes in, offering automated tracking systems able to help hospitals meet CMS’s new documentation and compliance standards with ease.
What is the New CMS Essential Medicine Buffer Stock Payment?
More than 75% of the nation’s acute-care hospitals are reimbursed under the IPPS. Under this model, hospitals receive a single bundled payment based on the patient’s diagnosis (DRG), regardless of the specific drugs or supplies used. This can create significant financial strain when high-cost medicines are required unexpectedly or infrequently.
How the IPPS Add-on Payment Works
To address this gap, CMS introduced a quarterly add-on payment to offset the cost burden of establishing and maintaining a buffer stock of essential medicines, excluding the cost of acquiring the drugs themselves. The goal is to enhance readiness, minimize delays, and increase access to lifesaving treatment during emergencies.
Who Qualifies and What are the Requirements?
The following criteria must be met to qualify:
Hospital requirements:
- 100 beds or fewer
- Independently operated (not part of a multi-facility system)
Drug requirements:
- One of 86 essential medicines designated by CMS
- A six-month buffer stock must be maintained
- Stock can be held directly onsite, or via a contract with a manufacturer, distributor, or intermediary
Meeting these CMS buffer stock requirements isn’t just about storing drugs; it’s about tracking, proving, and reporting them. That’s where IDENTI makes the difference.
How IDENTI Medical Helps Hospitals Secure CMS Reimbursement
To confidently participate, hospitals need robust tracking tools to meet CMS documentation and compliance standards. Automated Dispensing Cabinets offer secure, computer-controlled management of medications (including controlled drugs), ensuring full visibility over stock and location through an interoperable system. Paired with the IDENTIPlatform, a cloud-based inventory management platform, hospitals gain comprehensive, item-level tracking, analytics, and insights—powered by AI, RFID, and image recognition—across procedural and operating room environments. IDENTI equips hospitals with the secure tracking, expiration alerts, and auditable reporting needed to document compliance, rotate buffer stock, avoid waste, and ultimately unlock quarterly IPPS payments under the FY 2025 policy, while reinforcing overall safety and revenue management.
Automated, Real-Time Inventory Tracking
Full data is critical for CMS audits and ongoing policy compliance, and IDENTI’s RFID-enabled smart cabinets and tracking systems provide full visibility into:
- What essential drugs are in stock
- Where they’re stored
- When they expire
Minimize Waste from Expired Drugs
IDENTI’s system sends automatic alerts when an item is near expiration, and supports hospital inventory stock rotation to ensure efficiency. This reduces write-offs and aligns with CMS’s desire to maintain a usable buffer, not just a documented one.
Auditable Data for Streamlined Reporting
CMS requires documentation, not just anecdotal proof. IDENTI helps streamline reimbursement and support regulatory compliance for essential medicine by providing:
- Stock levels over time
- Expiration logs
- Access records
- Reports that justify eligibility and operational costs
Enhanced Documentation and Revenue Integrity
While the CMS buffer payment centers on inventory readiness, IDENTI also helps hospitals protect revenue across other high-cost drug scenarios with its real-time charge capture.
Improved Safety, Efficiency, and Compliance
IDENTI’s smart cabinets allow staff to instantly and securely access the correct medication, supporting CMS’s operational goals of patient safety and buffer stock readiness.
Unlock Your Hospital’s IPPS 2025 Payments
With IDENTI’s AI-powered solutions hospitals can:
- Prove compliance with CMS’s essential medicine requirements
- Track and rotate buffer stock to avoid waste
- Generate the documentation needed to receive quarterly payments
- Eliminate manual errors that could jeopardize reimbursement
- Improve readiness and patient safety while protecting revenue
IDENTI doesn’t just help you store buffer stock; it helps you get paid for it.
With real-time tracking, expiration alerts, auditable reports, and automated inventory documentation, IDENTI removes the friction from compliance and gives your hospital the tools to unlock essential buffer stock funding. Contact us today to learn more about how IDENTI can help your hospital qualify for the CMS buffer stock payment and optimize your inventory systems.
