CMS Releases FY 2023 Inpatient Psychiatric Facility Final Rule

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service (FFS) prospective payment system (PPS) for inpatient psychiatric facilities (IPFs) for fiscal year (FY) 2023, which begins Oct. 1, 2022. In response to comments received urging the CMS to recognize the inflationary pressures currently faced by IPFs and other providers, the final rule provides a 3.9% net rate increase, up from the proposed 2.9% net increase.

Key provisions of the final rule include a:

  • 3.9% increase in the IPF federal per diem base rate for providers that comply with the CMS IPF quality reporting (QR) program requirements, resulting in a rate of $865.63, up from the current $832.94.
  • 3.9% increase to the electroconvulsive therapy treatment rate from the current $358.60 to $372.67 for providers that comply with the CMS IPF QR program requirements.
  • Permanent limit of 5% for annual decreases to the wage index.
  • Slight increase in the labor-related share from the current 77.2% to 77.4%, which will increase payments for IPFs with a wage index greater than 1.0.
  • 54% increase in the outlier threshold amount from the current $16,040 to $24,630 to maintain estimated outlier payments at 2% of total estimated aggregate IPF PPS payments. This will result in fewer cases qualifying for an outlier payment.

The MHA continues to review details of the final rule and will provide IPFs with an updated impact analysis for Medicare FFS patients in the near future. Members with questions should contact Vickie Kunz at the MHA.