CMS Boosts FY24 Payment Rates for Inpatient Psychiatric and Rehab Facilities

July 28, 2023 - CMS has finalized payment increases for inpatient psychiatric facilities (IPFs) and inpatient rehabilitation facilities (IRFs).

IPF Prospective Payment System

The IPF prospective payment system (PPS) for fiscal year (FY) 2024 includes a payment update of 2.3 percent or $70 million relative to FY 2023. The update reflects a 3.3 percent increase based on the 3.5 percent market basket update and a 0.2 percentage point decrease for productivity. CMS also updated the outlier threshold, leading to a 0.9 percent decrease in the rate.

The rule finalized regulation changes that will allow more flexibility for hospitals to open and bill Medicare for new excluded inpatient psychiatric distinct part units. Hospitals can open a new excluded IPF unit anytime during the cost-reporting period. The unit can receive reimbursement through the IPF PPS if the hospital provides at least a 30-day notice.

CMS also finalized changes to the IPF Quality Reporting (IPFQR) program, which requires IPFs to submit certain quality data to CMS to avoid a 2.0 percentage point reduction to their annual payment rate.

The agency has added three health equity measures to the IPFQR program. The Facility Commitment to Health Equity measure assesses an IPF’s commitment to health equity by gathering data on IPF efforts across five areas: equity is a strategic priority, data collection, data analysis, quality improvement, and leadership engagement.

The second measure is the Screening for Social Drivers of Health (SDOH) measure which assesses the share of patients screened for five specific health-related social needs: food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety.

Third, the agency is adding the Screen Positive Rate for SDOH measure, which assesses the share of patients screened under the Screening for SDOH measure that screen positive for each of the five health-related social needs.

CMS is adding a patient experience of care measure, modifying the COVID-19 Vaccination Coverage Among Healthcare Personnel measure, and removing the Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification and the Tobacco Use Brief Intervention Provided or Offered and Tobacco Use Brief Intervention Provided measures.

The IPF PPS rule also finalized the adoption of a data validation pilot program and codified the IPFQR program’s requirements and policies related to statutory authority, participation and withdrawal, data submission, and quality measure retention and removal.

The final rule can be found here.

IRF Prospective Payment System

Under the FY 2024 IRF PPS final rule, CMS updated payment rates by 4.0 percent or $335 million relative to FY 2023. The increase reflects a 3.6 percent market basket update, a 0.2 percentage point productivity decrease, and a 0.6 percentage point increase from the outlier threshold adjustment.

Similar to the IPF PPS, CMS finalized regulation changes to allow hospitals to open a new IRF unit that can receive payments under the IRF PPS at any time during the cost reporting period. These modifications are expected to alleviate unnecessary administrative burden for hospitals and increase access to care, CMS said.

The final rule added two new measures to the IRF Quality Reporting Program (QRP).

The Adopt the Discharge Function Score measure assesses functional status by determining the share of IRF patients who meet or exceed an expected discharge function score. The measure uses mobility and self-care items already collected on the IRF Patient Assessment Instrument. This measure will replace the Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan measure.

CMS is also adopting the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure, which reports the share of stays in which IRF patients are up to date with recommended COVID-19 vaccinations in accordance with CDC guidance.

The rule modified the COVID-19 Vaccination Coverage Among Healthcare Personnel and removed three measures: the Application of Functional Assessment/Care Plan measure, the IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients measure, and the IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients measure.

CMS also finalized a public reporting policy that shares the percentage of patient stays with a discharge assessment indicating that a current reconciled medication list was provided to the subsequent provider or patients at discharge or transfer.

The final rule can be found here.