Psychiatric facilities get 2.5% payment bump in final rule

Inpatient Psychiatric Facilities (IPFs) will get a 2.5% payment bump under the IPF Prospective Payment System final rule issued by the Centers for Medicare and Medicaid Services.

The increase is based on the final 2021-based IPF market basket increase of 3.2% reduced by a 0.7 percentage point productivity adjustment. CMS is also updating the outlier threshold so outlier payments remain at 2% of total payments.

Total estimated payments to IPFs are expected to increase by 2.4%, or $70 million, in fiscal year 2026, relative to IPF payments in FY 2025, CMS said.

WHAT’S THE IMPACT

The current IPF PPS facility-level adjustment factors for teaching status and rural location were derived from a regression model implemented in 2005, said CMS, and haven’t been updated since then. The agency is increasing the adjustment factors for facility teaching status and rural location beginning in FY 2026, based on more recent claims and cost data from FY 2020, 2021, and 2022.

CMS is also recognizing the increases to IPF teaching caps for resident full-time equivalents awarded under Section 4122 of the Consolidated Appropriations Act. These updates will be made in a budget-neutral manner, the agency said.

In the final rule, CMS is finalizing changes to quality measures under the IPF Quality Reporting Program. Specifically, it’s modifying the reporting period of one measure – the 30-Day Risk-Standardized All-Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge measure (also referred to as the IPF ED Visit measure) – from a one-year, calendar year reporting period to a two-year, fiscal year reporting period.

This, CMS said, is to bring this measure’s reporting period into alignment with another program measure with which it is intended to be comparable. 

CMS is also removing four measures, all beginning with the CY 2024 reporting period and FY 2026 payment determination: Facility Commitment to Health Equity; COVID–19 Vaccination Coverage among Health Care Personnel; Screening for Social Drivers of Health; and Screen Positive Rate for Social Drivers of Health. 

THE LARGER TREND

CMS is changing the IPFQR Program’s Extraordinary Circumstances Exceptions policy to explicitly include extensions as a type of relief that CMS may grant if circumstances affect the ability of an IPF to fulfill its reporting requirements. The agency is also codifying the process for requesting or granting an ECE – CMS initially proposed shortening this timeframe to 30 days from the current 90 days, but instead is finalizing a change to 60 days based on public comment.

The agency sought input on potential future star rating systems for the IPFQR Program for display on the Compare tool on Medicare.gov. The Compare tool currently displays star ratings for many providers and facility types, but doesn’t include IPFs. CMS’ Request for Information (RFI) solicited feedback on the development of a five-star methodology for IPFs that can meaningfully describe an IPF’s quality of care.