Fiscal Year 2024 Medicare Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) and Quality Reporting (IPFQR) Updates Proposed Rule (CMS-1783-P)
On April 4, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update Medicare payment policies and rates for the Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) for fiscal year (FY) 2024. CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for IPFs on an annual basis.
This fact sheet discusses the major provisions of the proposed rule, including proposed annual updates to the prospective payment rates, the outlier threshold, the wage index, and associated impact analysis. In addition, the rule includes a proposal to rebase and revise the IPF market basket, as well as a proposal to modify regulations to allow hospitals to open and begin billing Medicare for an excluded IPF unit anytime within the cost reporting year, which CMS believes will help increase access to essential inpatient psychiatric services and available beds.
This proposed rule also includes a request for information to inform future revisions to the IPF PPS, which are required by the Consolidated Appropriations Act, 2023 (CAA, 2023).
Lastly, for the IPF Quality Reporting (IPFQR) Program, CMS is proposing to adopt four new measures, modify one existing measure, remove two existing measures, and adopt and implement a data validation pilot. One of the measures being proposed is a patient experience survey measure, which is also a requirement of the CAA, 2023. CMS is also proposing to codify the IPFQR Program’s requirements and policies at 42 C.F.R. § 412.433 in alignment with CMS’ other quality reporting programs.
The FY 2024 IPF PPS proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/2023-07122/medicare-program-fy-2024-inpatient-psychiatric-facilities-prospective-payment-system---rate-update.
Proposed Changes to Payments Under the IPF PPS
Proposed Updates to IPF Payment Rates
Total estimated payments to IPFs are estimated to increase by 1.9%, or $55 million, in FY 2024 relative to IPF payments in FY 2023. For FY 2024, CMS is proposing to update the IPF PPS payment rates by 3.0%, based on the proposed 2021-based IPF market basket increase of 3.2% less a proposed 0.2 percentage point productivity adjustment. Additionally, CMS is proposing to update the outlier threshold so that estimated outlier payments remain at 2.0% of total payments. CMS estimates that this would result in a 1.0% decrease to aggregate payments due to updating the outlier threshold. (Note: due to rounding, the 3.0% increase to payment rates and the 1.0% decrease to outlier payments result in a 1.9% overall increase in IPF payments).
Proposal to Rebase and Revise the IPF PPS Market Basket
Since the IPF PPS was implemented, the market basket used to update IPF PPS payments has been rebased and revised to reflect more recent data on IPF cost structures. CMS last rebased and revised the IPF market basket in the FY 2020 IPF PPS rule, where a 2016-based IPF market basket, using Medicare cost report data for both Medicare participating freestanding psychiatric hospitals and hospital-based psychiatric units, was adopted. The proposal for FY 2024 would be to adopt a 2021-based IPF market basket and includes proposed changes to the market basket cost weights, price proxies, market basket update, and labor-related share.
Proposed Update to the Labor-Related Share
As a result of the proposed rebasing and revising of the IPF market basket, the proposed FY 2024 labor-related share (LRS) is 78.5%, which is a 1.1 percentage point increase relative to the FY 2023 LRS of 77.4%.
Proposed Modification to the Regulation on Excluded Units Paid Under the IPF PPS
In response to increased mental health needs, including the need for availability of inpatient psychiatric beds, CMS is proposing changes to the regulations to allow greater flexibility for hospitals to open and bill Medicare for a new inpatient psychiatric distinct part unit. Beginning in FY 2024, CMS is proposing to amend the regulations at 412.25(c) to allow hospitals to open a new IPF unit at any time during the cost reporting period. This proposal would allow a hospital unit to start being paid under the IPF PPS, as long as 30-day advance notice is provided to the CMS Regional Office and Medicare Administrative Contractor. CMS believes this proposal would alleviate unnecessary burden and administrative complexity placed upon hospitals when opening new psychiatric units, helping to expand access to behavioral health care in line with the CMS Behavioral Health Care Strategy.
Request for Information (RFI) to Inform the Revisions to the IPF PPS Required by the Consolidated Appropriations Act, 2023 (CAA, 2023)
As part of ongoing work to refine the IPF PPS, CMS has continued to analyze more recent IPF cost and claim information. In the FY 2023 IPF PPS proposed rule, CMS issued a technical report and sought comments on the results of the latest refinement analysis in preparation to propose IPF PPS patient-level and non-regression-derived refinements to be effective in FY 2024. Subsequently, new provisions in the CAA, 2023 require CMS to revise payments under the IPF PPS for Rate Year 2025 (which, under the IPF PPS, is FY 2025) as the Secretary determines appropriate. Accordingly, CMS is including a request for information (RFI) that will be used to inform future payment revisions. Also in the proposed rule, CMS is addressing the specific types of data and information that the CAA, 2023 suggests CMS may collect, as well as soliciting comments on additional data and information that could be collected to inform future payment revisions.
Background on the Inpatient Psychiatric Facility Quality Reporting (IPFQR) Program
The IPFQR Program requires that all IPFs paid under the IPF PPS must submit certain specified quality data to CMS, in a form and manner and within the timeframes that CMS prescribes. IPFs that do not submit the specified data on quality measures as required by the IPFQR Program receive a 2.0 percentage point reduction to their annual payment update.
The IPFQR Program aims to assess and foster improvement in the quality of care provided to patients in IPFs. By requiring IPFs to submit quality data to CMS annually and by CMS publicly reporting these data under the IPFQR Program, CMS ensures that IPFs are aware of best practices and that patients are able to make more informed decisions about their healthcare options.
The IPFQR Program began collecting data in FY 2013. Each year since the IPFQR Program began, approximately 97% of participating IPFs meet all IPFQR Program requirements and receive their full payment update.
Proposed Updates to the IPFQR Program
In this proposed rule, CMS is proposing to adopt three measures focused on health equity for the IPFQR Program. First, CMS is proposing to adopt the Facility Commitment to Health Equity measure beginning with the FY 2026 payment determination. This measure assesses an IPF’s commitment to health equity by asking the IPF to attest to its efforts to address health equity across five domains: (1) Equity is a Strategic Priority; (2) Data Collection; (3) Data Analysis; (4) Quality Improvement; and (5) Leadership Engagement. Second, CMS is proposing to adopt the Screening for Social Drivers of Health (SDOH) measure beginning with voluntary reporting of CY 2024 data and required reporting beginning with the FY 2027 payment determination. This measure assesses the percentage of patients, aged 18 years and over at time of admission, who are screened for five specific health-related social needs (HRSNs) — food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety. Third, CMS is proposing to adopt the Screen Positive Rate for SDOH measure beginning with voluntary reporting of CY 2024 data and required reporting beginning with the FY 2027 payment determination. This process measure assesses the percent of patients screened under the Screening for SDOH measure who screen positive for each of the five HRSNs.
CMS is also proposing to adopt one patient experience of care measure, which would fulfill the requirement under the CAA, 2023 to add a measure to the IPFQR Program on a patient’s perspective of care. The PIX survey measure calculates one overall score and scores on four domains (relationship with treatment team, nursing presence, treatment effectiveness, and healing environment) based on patient responses to a 23-item survey administered within 24 hours prior to discharge. CMS is proposing to adopt the PIX survey measure beginning with voluntary reporting of CY 2025 and CY 2026 data and required reporting of CY 2027 data beginning with the FY 2029 payment determination.
In addition, CMS is proposing to modify the COVID-19 Vaccination Coverage Among Healthcare Personnel measure, beginning with the fourth quarter of CY 2023 and affecting the FY 2025 payment determination. The proposed modification of this measure tracks the percentage of healthcare personnel (HCP) in IPFs who are considered “up-to-date” with recommended COVID-19 vaccination in accordance with the CDC’s most recent guidance. The current version of this measure reports only on whether HCP had received the primary vaccination series for COVID-19, while the proposed modification of this measure would require IPFs to report the cumulative number of HCP who are up-to-date with recommended COVID-19 vaccinations in accordance with the CDC’s most recent guidance. CMS is also making the same proposal for other quality reporting programs, including, but not limited to, acute care hospitals and long-term care hospitals.
CMS is also proposing to remove two measures beginning with the FY 2025 payment determination. The first measure proposed for removal is the Patients Discharged on Multiple Antipsychotic Medications with Appropriate Justification (HBIPS-5) measure. CMS is proposing to remove this measure because the clinical guidelines, which form the basis for this measure, have been updated and therefore the measure no longer aligns with the current clinical guidelines. The second measure proposed for removal is the Tobacco Use Brief Intervention Provided or Offered and Tobacco Use Brief Intervention Provided (TOB-2/2a) measure. CMS is proposing to remove this measure because it is duplicative of the Tobacco Use Treatment Provided or Offered at Discharge and Tobacco Use Treatment at Discharge (TOB-3/3a) measure, which will remain in the IPFQR Program’s measure set and similarly measures tobacco cessation interventions provided by IPFs.
CMS is also proposing to adopt a data validation pilot program beginning with data submitted in CY 2025 and continuing until a full data validation program is proposed and adopted in future rulemaking.
Finally, CMS is proposing to codify the IPFQR Program’s requirements and policies at 42 C.F.R. § 412.433 in alignment with CMS’ other quality reporting programs.