The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service prospective payment system (PPS) for inpatient psychiatric facilities (IPF) for fiscal year (FY) 2027.
Key provisions of the final rule include:
- Increasing the IPF PPS federal per diem base rate by a net 2.2% after all adjustments, from $892.87 to $912.40 for IPFs that comply with CMS IPF Quality Reporting Program requirements. The rate for providers that failed to report quality data is $894.56.
- Increasing the electroconvulsive therapy payment per treatment by a net 2.2%, from $673.85 to $688.59 for IPFs that comply with IPF Quality Reporting Program requirements and to $675.13 for IPFs that fail to report data.
- Decreasing the labor-related share slightly from the current 79% to 78.9%.
- Continuing to use the pre-reclassification and pre-floor hospital inpatient PPS wage indexes.
- Increasing the cost outlier threshold by 3.5%, from the current $39,360 to $40,750, to achieve the 2% target for outlier payments compared with aggregate IPF payments.
- Limiting total outlier payments to no more than 20% of a facility’s total IPF PPS payments. An IPF that exceeds this cap would no longer receive outlier payments, with an exemption for IPFs with fewer than 50 stays per year.
- Updating the IPF Quality Reporting Program to:
- Remove two measures:
- Alcohol Use Brief Intervention Provided or Offered and Alcohol Use Brief Intervention measure.
- Tobacco Use Treatment Provided or Offered at Discharge measure.
- Implementing the IPF-Patient Assessment Instrument to collect and submit certain standardized patient assessment data beginning Oct. 1, 2027, for the FY 2029 payment determination. The CMS will require that the Mobility: Chair/Bed-to-Chair Transfer assessment item be collected at admission only and that the Special Services, Treatments and Interventions in the Inpatient Psychiatric Setting assessment item be collected at discharge only. The CMS did not finalize the inclusion of the Social Security number in the administration category of the IPF-Patient Assessment Instrument; the Medicare number is required only when Medicare is the primary payer.
The MHA will provide IPFs with an updated facility-specific impact analysis and additional details on the final rule in the coming weeks. Members with questions should contact the MHA health finance team.
The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service prospective payment system (PPS) for inpatient psychiatric facilities (IPF) for fiscal year (FY) 2027.
