Health Reform WK-EDGE Inpatient psychiatric facilities will see increases in per diem payments in FY 2019
Wednesday, August 15, 2018

Inpatient psychiatric facilities will see increases in per diem payments in FY 2019

By Susan Smith, J.D., M.A.

CMS estimates that payments under the Medicare inpatient psychiatric facility prospective payment system (IPF PPS) will increase by 1.10 percent or $50 million in fiscal year (FY) 2019, while the IPF PPS federal per diem base rate will increase to $782.78 from $771.35 in FY 2018, according to the newly released Final rule. CMS noted that estimated payments to IPFs will be reduced by 0.24 percentage points due to updating the outlier fixed-dollar loss threshold amount. The final rule updates the PPS rates, the outlier threshold, and the wage index for inpatient services provided by Inpatient Psychiatric Facilities (IPFs) discharges beginning October 1, 2018, through September 30, 2019. It also updates the Inpatient Psychiatric Quality Reporting (IPQR) Program (Final rule, 83 FR 38576, August 6, 2018).

Proposed rule. The IPF PPS provides a per diem PPS for routine inpatient hospital services and psychiatric services provided by psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital for the diagnosis and treatment of mentally ill persons. The FY 2019 Proposed rule (83 FR 21104, May 8, 2018) included: (1) the IPF PPS per diem update; (2) changes to quality measures and reporting requirements under the IPFQR Program; (2) the IPF labor-related share; (3) the IPF wage index; and (5) minor technical corrections to the IPF regulations. The Proposed rule also included a Request for Information (RFI) on how to better achieve interoperability for the sharing of health care data between providers (see FY 2019 IPF PPS, quality reporting updates proposedMay 8, 2018).

IPF Payment update: The FY 2019 IPF PPS Final rule makes the additional payment updates:

  • The net IPF market basket update of 1.35 percent reflects the 2.9 percent IPF market basket update less the productivity adjustment of 0.80 percentage point and less the 0.75 percentage point reduction required by law.
  • The wage index adjustment to the labor-related portion of the federal rate will change from 75.0 percent in FY 2018 to 74.8 percent in FY 2019.
  • The labor related share of 74.8 percent and core base statistical area (CBSA) rural and urban wage indices for FY 2019, provided a wage index budget-neutrality adjustment of 1.0013.
  • The fixed dollar loss threshold amount has increased from $11,425 to $12,865 to maintain estimated outlier payments of 2 percent of the total estimated aggregate IPF PPS payments.
  • Providers who fail to report quality data for FY 2019 will receive the federal per diem rate of $767.33, reduced from $782.78 for FY 2018.
  • The electroconvulsive therapy (ECT) payment per treatment has increased from $332.08 to $337.00. Providers who fail to report quality data for FY 2019 will receive a FY 2019 payment of $330.35.

For FY 2019, CMS is maintaining the existing IPF MS-DRG adjustment factors as well as the same comorbidity adjustment factors in effect in FY 2018. In addition, CMS will continue to use the patient age adjustments currently in effect in FY 2018.

Inpatient Psychiatric Facility Quality Reporting Program

For FY 2019, CMS is removing five IPFQR Program measures beginning with the FY 2020 payment determination and subsequent years. CMS removed four of the measures because the costs associated with the measures outweigh the benefit of their continued use in the program. CMS removed the Tobacco Use measure because measure performance among IPFs is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made ("topped-out"). The five measures that will be removed are:

  • Influenza Vaccination Coverage among Healthcare Personnel (NQF #0431);
  • Alcohol Use Screening, SUB-1 (NQF #1661);
  • Assessment of Patient Experience of Care;
  • Use of an Electronic Health Record; and
  • Tobacco Use Screening, TOB-1 (NQF #1651).

Based on significant public comment emphasizing the importance of three measures CMS had proposed to remove were for patient safety and health issues specific to the patient population, CMS did not remove Hours of Physical Restraint (NQF #0640), Hours of Seclusion (NQF #0641, and Tobacco Use Treatment at Discharge TOB-3 and TOB-3a (NQF #1656). In addition, CMS is finalizing its proposal to no longer require facilities to submit sample size counts for measures for which sampling is performed beginning with the FY 2020 payment determination and subsequent years.

Regulatory changes. CMS has amended the regulations to replace references to: (1) ICD-9-CM with references to ICD-10-CM (see 42 C.F.R. §412.27(a). and (2) the former Rehabilitation, Psychiatric, and Long-Term Care (RPL) market basket with references to the IPF-specific market basic (see 42 C.F.R. §412.428(b)). In addition, CMS edited the definition of principal diagnosis a 42 C.F.R. §412.402 and made changes to the heading and introductory text of 42 C.F.R. §412.428. None of the changes impact policy.

FederalRegisterIssuances: FinalRules InpatientFacilityNews MedicarePartANews ProgramIntegrityNews QualityNews ReportingTransparencyNews VBPNews NewsFeed

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