CMS Releases FY 2024 Inpatient Psychiatric Facility Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system (PPS) for inpatient psychiatric facilities (IPF) for fiscal year (FY) 2024, beginning Oct. 1, 2023. Key provisions of the proposal include:

  • A 3.1% net increase to the IPF federal per diem base rate for providers that comply with the CMS IPF quality reporting (QR) program requirements, resulting in a proposed rate of $892.58, up from the current $865.63.
  • A 3.1% increase to the electroconvulsive therapy (ECT) per diem payment rate from the current $372.67 to $384.27 for providers that comply with the CMS IPF QR program requirements.
  • A rebased IPF PPS market basket to use FY 2021 data instead of FY 2016.
  • An increase in the labor-related share from the current 77.4% to 78.5%.
  • A 41% increase in the outlier threshold amount from the current $24,630 to $34,750 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.
  • Modifying the excluded unit regulation to allow a hospital to open a new IPF unit and begin being paid under the IPF PPS at any time during the cost reporting period if the hospital meets certain requirements. Currently, facilities cannot attain excluded unit status in the middle of a cost reporting period.
  • Changes to the IPF QRP including:
    • Adopting four new quality measures, including one on patient experience.
    • Modifying the COVID-19 Vaccination Coverage Among Health Care Personnel measure.
    • Removing two measures:
      • Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification (HBIPS-5).
      • Tobacco Use Brief Intervention Provided or Offered and Tobacco Use Brief Intervention Provided (TOB-2/2a).
    • Adopting a data validation pilot program starting with data submitted in 2025.

The MHA will provide IPFs with a facility-specific impact analysis and additional details on the proposed rule in the near future. The MHA also encourages members with IPF operations to review the proposed rule, provide comments to Vickie Kunz at the MHA by May 25 and submit comments to the CMS by June 5. The CMS is expected to release a final rule around Aug. 1, for an Oct. 1, 2023, effective date.

Members with questions should contact Vickie Kunz at the MHA.