Inpatient psychiatric facilities to get 2.7% payment rate update under proposed rule
Payments are expected to increase by 1.5%, or $50 million next year.
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Inpatient psychiatric facility payments are expected to increase by 1.5%, or $50 million next year under Medicare's Inpatient Psychiatric Facility Prospective Payment System proposed rule for fiscal year 2023.
The Centers for Medicare and Medicaid Services is proposing to update the payment rate by 2.7% based on the proposed market basket update of 3.1% percent, minus a 0.4 percentage point productivity adjustment.
If more recent data becomes available (for example, a more recent estimate of the market basket update or productivity adjustment), CMS said it would use the data to update the final rule. The expected payment rate increase of 1.5% is based on a comparison to the 2022 rate.
Additionally, CMS is proposing to update the outlier threshold so that estimated outlier payments remain at 2% of total payments. CMS estimates that this would result in a 1.2% overall decrease to aggregate payments due to updating the outlier threshold. CMS is also including a proposal to establish a permanent 5% cap policy to smooth the impact of year-to-year changes in psychiatric inpatient payments related to changes in the wage index.
CMS released the proposed rule late Thursday. The agency is seeking comments until May 31. CMS is not proposing any changes for the quality reporting program in the proposed rule.
WHY THIS MATTERS
To mitigate instability in payments due to significant wage index decreases that may affect providers in any given year, CMS is proposing for 2023 and subsequent years to apply a 5% cap on decreases in the wage index.
Specifically, CMS is proposing that an inpatient psychiatric facility wage index for 2023 and subsequent years would not be less than 95% of its final wage index calculated in the prior year.
CMS is also committed to addressing inequities in health outcomes through improving data collection to better measure and analyze disparities across programs and policies. As disparity initiatives expand, it is important to model efforts off of existing best practices, CMS said.
THE LARGER TREND
The Inpatient Psychiatric Facility Prospective Payment System was implemented in 2005 and uses the adjustment factors derived from the original regression model. Working in collaboration with a contractor, CMS has undertaken further analysis of more recent IPF cost and claim information.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
