CMS Releases FY 2022 Inpatient Psych Facility Prospective Payment System Final Rule

The Centers for Medicare & Medicaid Services (CMS) released a final rule  to update the Medicare fee-for-service prospective payment system (PPS) for inpatient psychiatric facilities (IPFs) for fiscal year (FY) 2022, which begins Oct. 1, 2021. 

The IPF rule will:

  • Provide a net 2.2 % increase to the federal per diem base rate, increasing it from $815.22 to $832.94 while also increasing the payment for electroconvulsive therapy treatment from $350.97 to $358.86. IPFs that fail to comply with CMS quality reporting program requirements are subject to a 2 percentage point reduction to the federal rates.
  • Result in a very slight decrease to the labor-related share from 77.3% to 77.2%
  • Decrease the cost outlier threshold by 4% from the current $14,630 to $14,030, which should result in slightly more cases qualifying for an outlier payment.
  • Update the IPF PPS teaching policy for IPF hospital closures and displaced residents, making it consistent with changes included in the FY 2021 inpatient PPS final rule.
  • Modify the IPF quality reporting program by:
    • Finalizing its proposal to incrementally begin requiring reporting of patient-level data information for numerators and denominators for nine chart-abstracted program measures. For FY 2023 payment determination, the CMS will permit voluntary patient-level data submission. For FY 2024 payment determination, IPFs will be required to submit the patient-level data for all the chart-abstracted measures.  
    • Adopting the COVID-19 Healthcare Personnel Vaccination measure for the FY 2023 payment determination and subsequent years.
    • Replacing the Follow-up after Hospitalization for Mental Illness Measure with the Follow-up After Psychiatric Hospitalization measure for the FY 2024 payment determination and subsequent years.
    • Removing the Timely Transmission of Transition Record (Discharges from an Inpatient Facility to Home/Self Care or Any Other Site of Care) measure starting with the FY 2024 determination.
    • Maintaining two measures that were proposed for removal: Alcohol Use Brief Intervention Provided or Offered and Alcohol Use Brief Intervention (SUB-2/2a) and Tobacco Use Brief Intervention Provided or Offered and Tobacco Use Brief Intervention (TOB-2/2a).

The CMS continues to review input received on the agency’s Request for Information to close the health equity gap in the CMS quality programs to make reporting of health disparities based on social risk factors and race and ethnicity more comprehensive and actionable for facilities, providers and patients. The agency will respond to this input in a future rule.  

The MHA will provide IPFs with an updated estimated impact analysis and summary of the final rule soon. Members with questions should contact Vickie Kunz at the MHA.