CMS Releases FY 2027 Inpatient Psychiatric Facilities Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system for inpatient psychiatric facilities (IPF) for fiscal year (FY) 2027.

Key provisions of the proposed rule include:

  • Increasing the IPF prospective payment system (PPS) federal per diem base rate by a net 2.2% after all adjustments, from $892.87 to $912.58 for IPFs that comply with the CMS IPF Quality Reporting Program (QRP) requirements. The rate for providers that fail to report quality data is $894.74.
  • Increasing the electroconvulsive therapy payment per treatment by a net 2.2% from $673.85 to $688.73 for IPFs that comply with IPF QRP requirements and $675.26 for IPFs that fail to report data.
  • Increasing the labor-related share from the current 79% to 79.1%.
  • Continuing to use the pre-reclassification and pre-floor hospital inpatient PPS wage indexes while soliciting input on alternative data sources, such as Bureau of Labor Statistics data for the IPF wage index.
  • Decreasing the cost outlier threshold by 3.9%, from $39,360 to $37,820, to achieve the 2% target for outlier payments compared with aggregate payments.
  • Limiting total outlier payments to no more than 20% of a facility’s total payments. If finalized, facilities that exceed this cap would no longer receive outlier payments.
  • Updating the IPF QRP to:
    • Remove two measures:
      • Alcohol Use Brief Intervention Provided or Offered and Alcohol Use Brief Intervention (SUB-2/2a) measure.
      • Tobacco Use Treatment Provided or Offered at discharge (TOB-3/3a) measure.
    • Implement the IPF-Patient Assessment Instrument (IPF-PAI) to collect and submit certain standardized patient assessment data beginning Oct. 1, 2027, for the FY 2029 payment determination. The CMS proposes two methods for IPF-PAI data submission: a free CMS-developed web application or two Fast Healthcare Interoperability Resource (FHIR) application programming interfaces. This would be the first time the CMS would include data submission via the FHIR standard in a QRP.

The MHA will provide facilities with a facility-specific impact analysis and additional details on the proposed rule in the coming weeks.  Members are encouraged to submit comments to the CMS by June 1 and notify Vickie Kunz at the MHA of any issues identified by May 22.