Health Reform WK-EDGE Payments to psychiatric facilities to increase $95 million in FY 2021
Thursday, August 13, 2020

Payments to psychiatric facilities to increase $95 million in FY 2021

By Sheila Lynch-Afryl, J.D., M.A.

The market basket for fiscal year 2021 is 2.2 percent, with a 0 percent productivity adjustment due to the economic consequences of COVID-19.

Payments to inpatient psychiatric facilities (IPFs) under the IPF prospective payment system (PPS) will increase approximately 2.3 percent, or $95 million, in fiscal year (FY) 2021. CMS did not make any changes to the IPF Quality Reporting Program in the IRF PPS final rule (Final rule, 85 FR 47042, August 4, 2020).

Annual update. CMS’ adjustment of the 2016-based IPF market basket update for economy-wide productivity per Social Security Act §1886(s)(2)(A)(i) was 0 percent, resulting in a final IPF payment rate update of 2.2 percent for FY 2021. In the FY 2021 IPF PPS proposed rule (85 FR 20628, April 14, 2020), CMS had proposed a market basket percentage increase of 3.0 percent based on the fourth quarter 2019 forecast of the 2016-based IPF market basket, but it was developed before the COVID-19 pandemic and its resulting economic impacts.

For providers that report quality data, the per diem base rate will increase from $798.55 to $815.22 ($799.27 for IPFs that failed to report quality data) and the electroconvulsive therapy (ECT) payment will increase from $343.79 per treatment to $350.97 ($344.10 for IPFs that failed to report quality data). CMS also increased (1) the labor-related share from 76.9 percent to 77.3 percent; and (2) the fixed dollar loss threshold amount from $14,960 to $14,630 to maintain estimated outlier payments at 2 percent of total estimated aggregate IPF PPS payments.

Wage index. CMS adopted the Office of Management and Budget (OMB) labor market area delineations issued in OMB Bulletin 18-04 for the FY 2021 IPF PPS wage index. To mitigate the negative effects of wage index changes, any decline in a provider’s wage index value from its FY 2020 wage index, regardless of the circumstance causing the decline, will be capped at a 5 percent decrease for FY 2021.

Quality reporting. CMS did not make any changes to the IPF Quality Reporting Program for FY 2021 and later.

Standard for progress notes. CMS finalized changes that the April 6, 2020, interim final rule (85 FR 19230) made to 42 C.F.R. §482.61(d), including the deletion of the modifier "independent" from the term "licensed independent practitioner(s)" (see CMS removes barriers, increases flexibility for providers during coronavirus pandemic, April 6, 2020). CMS emphasized that this revision reflects its belief that advanced practice providers, including physician assistants, nurse practitioners, psychologists, and clinical nurse specialists, should have the authority to practice more broadly and that nonphysician practitioners practicing in the psychiatric hospital setting should be able to record progress notes of psychiatric patients for whom they are responsible.

FederalRegisterIssuances: FinalRules AgencyNews GeneralNews InpatientFacilityNews MedicarePartANews ProviderPaymentNews QualityNews NewsFeed

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