CMS issued a proposed rule on April 4 that would update Medicare payment policies and rates for the Inpatient Psychiatric Facility Prospective Payment System.
Six things to know:
1. Total estimated payments to inpatient psychiatric facilities are estimated to increase by 1.9 percent, or $55 million, in fiscal 2024 relative to IPF payments in fiscal 2023.
2. For fiscal 2024, CMS is proposing to update the IPF prospective payment system rates by 3 percent, based on the proposed 2021-based IPF market basket increase of 3.2 percent, minus a proposed 0.2 percentage point productivity adjustment.
3. CMS is proposing to update the outlier threshold so that estimated outlier payments remain at 2 percent of total payments, which is estimated to result in a 1 percent decrease to aggregate payments due.
4. CMS last rebased and revised the IPF market basket in the 2020 rule, which adopted a 2016-based IPF market basket. CMS is proposing a 2021-based IPF market basket and includes proposed changes to the market basket cost weights, price proxies, market basket update, and labor-related share.
5. The new proposed labor-related share is 78.5 percent, a 1.1 percentage point increase from 2023.
6. CMS is proposing to allow hospitals to open a new IPF unit at any time during the cost reporting period, beginning in FY 2024. This proposal would allow a hospital unit to start being paid under the IPF PPS, as long as 30-day advance notice is provided to the CMS Regional Office and Medicare Administrative Contractor.