Health Reform WK-EDGE Psychiatric facilities to see $65 million more in reimbursement for FY 2020
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Tuesday, August 13, 2019

Psychiatric facilities to see $65 million more in reimbursement for FY 2020

By Sheila Lynch-Afryl, J.D., M.A.

For fiscal year 2020, CMS increased payments to psychiatric facilities by $65 million and adopted a new quality measure.

Payments to inpatient psychiatric facilities (IPFs) will increase 1.5 percent, or $65 million, in fiscal year (FY) 2020 under the IPF prospective payment system (PPS). CMS also updated quality reporting requirements in the IRF PPS final rule (Final rule, 84 FR 38424, August 6, 2019).

Annual update. CMS rebased and revised the 2012-based IPF market basket to a 2016 base year reflecting both freestanding IPFs and hospital-based IPFs. The 2016-based IPF market basket update of 2.9 percent was reduced by the.4 percent productivity adjustment mandated by section 10319(e) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) and an additional .75 percentage point "other" adjustment as also required by the ACA, resulting in an estimated IPF payment rate update of 1.75 percent for FY 2020.

For providers that report quality data, the per diem base rate will increase from $782.78 to $798.55 ($782.85 for IPFs that failed to report quality data) and the electroconvulsive therapy (ECT) payment will increase from $337 per treatment to $343.79 ($337.03 for IPFs that failed to report quality data). CMS also increased (1) the labor-related share from 74.8 percent to 76.9 percent; and (2) the fixed dollar loss threshold amount from $12,865 to $14,960 to maintain estimated outlier payments at 2 percent of total estimated aggregate IPF PPS payments.

Wage index. CMS removed the one-year lag in the use of the pre-floor, pre-reclassified inpatient prospective payment system (IPPS) hospital wage index. Beginning in FY 2020, it will use the pre-floor, pre-reclassified IPPS hospital wage index from the FY concurrent with the IPF fiscal year as the basis for the IPF wage index. CMS explained that this will change result in the most up-to-date wage data being used and more consistency with the wage index methodologies used by other Medicare payment systems.

Quality reporting. CMS adopted the Medication Continuation Following Inpatient Psychiatric Discharge (NQF #3205) measure for the FY 2021 payment determination and later. This brings the total number of measures in the IPF quality reporting program to 14.

FederalRegisterIssuances: FinalRules InpatientFacilityNews MedicarePartANews ProviderPaymentNews QualityNews

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