Inpatient psychiatric facilities get a proposed 1.9% payment increase in 2024

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Inpatient psychiatric facility payments are estimated to increase by 1.9%, or $55 million in 2024, relative to 2023, in the Inpatient Psychiatric Facility Prospective Payment System proposed rule released by the Centers for Medicare and Medicaid Services on Tuesday. 

For 2024, CMS is proposing to update the payment rates by 3%, based on the proposed 2021-based Inpatient Psychiatric Facility market basket increase of 3.2%, less a proposed 0.2 percentage point productivity adjustment. 

This is similar to the Inpatient Rehabilitation Facility payment update which was also released this week.

But unlike that proposed rule, 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% decrease to aggregate payments due to updating the outlier threshold. 

Due to rounding, the 3% increase to payment rates and the 1% decrease to outlier payments result in a 1.9% overall increase in IPF payments. 

WHY THIS MATTERS 

CMS is proposing to adopt four new measures, modify one existing measure, remove two existing measures, and adopt and implement a data validation pilot. One of the measures being proposed is a patient experience survey measure.

In response to increased mental health needs, including the need for availability of inpatient psychiatric beds, CMS is proposing changes to the regulations to allow greater flexibility for hospitals to open and bill Medicare for a new inpatient psychiatric distinct part unit. 

Beginning in 2024, CMS is proposing to amend the regulations to allow hospitals to open a new IPF unit at any time during the cost reporting period. This proposal would allow a hospital unit to start being paid, as long as 30-day advance notice is provided to the CMS Regional Office and Medicare Administrative Contractor. 

CMS said it believes this would help increase access to essential inpatient psychiatric services and available beds, and help to alleviate unnecessary burden and administrative complexity placed upon hospitals when opening new psychiatric units. Helping to expand access to behavioral healthcare is in line with the CMS Behavioral Health Care Strategy, CMS said.

CMS is proposing to adopt three measures focused on health equity.

One is the Facility Commitment to Health Equity measure beginning with the FY 2026 payment determination. This measure will ask IPFs to attest to their efforts to address health equity across five domains: Equity is a Strategic Priority, Data Collection, Data Analysis, Quality Improvement and Leadership Engagement. 

Second, CMS is proposing to adopt the Screening for Social Drivers of Health (SDOH) measure beginning with voluntary reporting of 2024 data and required reporting beginning with the 2027 payment determination. This measure assesses the percentage of patients aged 18 years and over at time of admission who are screened for five specific health-related social needs: food insecurity, housing instability, transportation needs, utility difficulties and interpersonal safety.

Third, CMS is proposing to adopt the Screen Positive Rate for SDOH measure beginning with voluntary reporting of 2024 data and required reporting beginning with the 2027 payment determination. This process measure assesses the percent of patients screened under the Screening for SDOH measure who screen positive for each of the five health-related social needs.

THE LARGER TREND

CMS last rebased and revised the IPF market basket in the 2020 rule, where a 2016-based market basket was adopted that used Medicare cost report data for both Medicare participating freestanding psychiatric hospitals and hospital-based psychiatric units. 

The proposal for 2024 would be to adopt a 2021-based market basket and would include proposed changes to the market basket cost weights, price proxies, market basket update and labor-related share.

The proposed 2024 labor-related share is 78.5%, which is a 1.1 percentage point increase relative to the 2023 labor-related share of 77.4%.

The program requires that all IPFs must submit certain specified quality data to CMS. IPFs that do not submit the specified data on quality measures as required receive a 2 percentage point reduction to their annual payment update.
 
The IPFQR Program began collecting data in 2013. Each year since the program began, approximately 97% of participating IPFs meet all IPFQR Program requirements and receive their full payment update.
 
 

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org

Juan Nanez will offer more detail in the HIMSS23 session "How Care Provider Access to Regional Data Reduces Hospital Readmissions." It is scheduled for Tuesday, April 18 at 11 a.m. – 11:30 a.m. CT at the South Building, Level 1, room S104.