Inpatient psychiatric facilities get proposed 2.7% increase

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The Centers for Medicare and Medicaid Services has issued a proposed rule to update Medicare payment policies and rates for the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) for fiscal year 2025, with CMS proposing to update the payment rates by 2.7%.

That's based on the proposed 2021-based IPF market basket increase of 3.1%, minus a proposed 0.4 percentage point productivity adjustment. CMS is proposing that if more recent data becomes available – for example, a more recent estimate of the market basket update or productivity adjustment – CMS would use this data, if appropriate, to determine the FY 2025 market basket update percentage increase and the productivity adjustment in the final rule.

The agency is also proposing to update the outlier threshold so that estimated outlier payments remain at 2% of total payments. CMS estimates this would result in a 0.1% decrease in aggregate payments due to updating the outlier threshold. 

Total estimated payments to IPFs are estimated to increase by 2.6%, or $70 million, in FY 2025 relative to IPF payments this year.

There are also proposed revisions to the methodology for determining the payment rates, with CMS suggesting revisions to the IPF patient-level adjustment factors. The patient-level adjustments include Medicare Severity Diagnosis Related Groups (MS–DRGs) assignment of the patient's principal diagnosis, selected comorbidities, patient age and the variable per diem adjustments.

An analysis of the latest IPF PPS claims and cost data found that ancillary costs for stays that include electroconvulsive therapy (ECT) treatments have increased since 2005 by a greater amount than the current ECT per treatment payment under the IPF PPS. Because of that, CMS is proposing to increase the per treatment amount. The current (FY 2024) ECT payment per treatment is $385.58, and the proposed 2025 ECT payment per treatment is $660.30. 

For FY 2025, the agency is proposing to adopt the CBSA Labor Market Areas for the IPF PPS wage index as defined in the OMB Bulletin 23-01. It's also proposing that providers transitioning from rural to urban based on these CBSA revisions would receive two-thirds of the rural adjustment in FY 2025, one-third of the rural adjustment in FY 2026 and no rural adjustment in FY 2027. 

CMS is also clarifying the eligibility criteria for the option to elect to file an all-inclusive cost report, and said it will make operational changes to ensure that only government-owned or tribally owned IPF hospitals are permitted to file an all-inclusive cost report for cost reporting periods beginning on or after October 1.

QUALITY REPORTING UPDATES

There are also proposed changes being floated for the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program, which requires that all IPFs submit certain specified quality data to CMS in a form and manner, and within the time frames that CMS prescribes. IPFs that do not submit the specified data on quality measures as required receive a two percentage point reduction to their annual payment update. The program aims to assess and foster improvement in the quality of care provided to patients in IPFs.

In the proposed rule, CMS is proposing to adopt one new measure, the 30-Day Risk-Standardized All-Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge measure (also referred to as the IPF ED Visit measure). This claims-based measure would assess the proportion of patients 18 and older with an emergency department visit, including observation stays, within 30 days of discharge from an IPF without subsequent admission. 

Patients who are then admitted to an acute care hospital or IPF are represented under the Thirty-Day All-Cause Unplanned Readmission Following Psychiatric Hospitalization in an Inpatient Psychiatric Facility measure, which is already in the IPFQR Program. By adopting the IPF ED Visit measure, the IPFQR Program would provide a more complete assessment of post-discharge acute care and encourage improvements in discharge planning and care coordination, said CMS.

Also, CMS is proposing to require IPFs to submit patient-level quality data on a quarterly basis (as opposed to the current annual basis). This, the agency said, would align with other quality reporting programs that require patient-level data submission on a quarterly basis, and it would reduce data strains on IPF systems.

THE LARGER TREND

CMS said it believes these policies will improve or maintain individual access to high-quality care by ensuring that payment rates reflect the best available data on the resources involved in inpatient psychiatric care and the costs of these resources. 

CMS is proposing a three-year budget-neutral phase-out of the rural adjustment for IPFs located in the 54 rural counties that will become urban. It will also provide a 5% cap on any decrease to the provider's wage index from its wage index in the prior year, as finalized in previous rulemaking.

The proposed rule also includes two requests for information on future revisions to the IPF PPS facility-level adjustment factors and development of the new standardized IPF Patient Assessment Instrument (IPF-PAI).
 

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.