CMS Publishes Final Rule on IPF PPS & QRP

August 2, 2023

CMS has published its final rule on the Inpatient Psychiatric Facility (IPF) Prospective Payment System (PPS) and Quality Reporting Program for fiscal year 2024 (FY24) – CMS’ factsheet can be found here . 

Changes to regulations in the final rule will take effect on October 1, 2023. 

Notably, finalized changes to the regulations include: 

  • IPF Payment Rates: The agency projects that total payments to IPFs will increase by 2.3 percent from FY23. The finalized rule will update the IPF PPS payment rates by 3.3 percent as well as update the outlier threshold resulting in estimated outlier payments at 2 percent of total payment, which is estimated to produce a 0.9 percent decrease in aggregate payments. 
  • IPF Market Basket Rebase: CMS’ final rule will update the IPF market basket cost weights to a 2021 base year (from 2016) to reflect the most recent and complete set of hospital cost report data. 
  • Excluded Unit Change: In response to stakeholder feedback, updates to the regulations, applied to IPFs and Inpatient Rehabilitation Facilities, will allow a hospital unit to be paid under the IPF PPS if 30-day advance notice is provided to CMS.  
  • IPF PPS Revisions: Aligned with requirements established in the Consolidated Appropriations Act of 2023 (CAA 2023), CMS solicited stakeholder information to be considered in future rulemaking on additional data and information that psychiatric hospitals and units may report that would be valuable when considering revisions to the payment rates methodology. 
  • IPF QRP: Also consistent with CAA 2023, CMS is finalizing several changes under the IPF QRP – such as adoption of three measures around health equity (inclusive of screening for social drivers of health), adoption of the Psychiatric Inpatient Experience survey, removes the Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification and two Tobacco Use measures beginning in FY25, as well as finalizing its proposed data validation program starting with CY25 submitted data. 

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