Fact Sheets

FY 2020 Proposed Medicare Payment and Quality Reporting Updates for Inpatient Psychiatric Facilities (CMS-1712-P)

FY 2020 Proposed Medicare Payment and Quality Reporting Updates for Inpatient Psychiatric Facilities (CMS-1712-P)

On April 18, 2019, the Centers for Medicare & Medicaid Services (CMS) is proposing a rule that further advances our continuing efforts to strengthen the Medicare program by better aligning payment rates for these facilities with the costs of providing care.   The proposed rule would update Medicare payment policies and rates for the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) and the IPF Quality Reporting (IPFQR) Program for Fiscal Year (FY) 2020.

The policies in the IPF PPS and IPFQR proposed rule represent updates to the inpatient psychiatric facilities’ payments and quality measures. These policies support the agency’s priority of “Strengthening Medicare” and help guarantee that seniors can access the care they need at the site of care they choose. 

This fact sheet discusses major provisions of the proposed rule. The deadline for submitting comments on the proposed rule is June 17, 2019. The proposed rule (CMS‑1712‑P) can be downloaded from the Federal Register at:

Background on the IPF Prospective Payment System

The Balanced Budget Requirement Act of 1999 required CMS to pay for inpatient psychiatric services provided in a psychiatric facility on a per diem basis under the prospective payment system (PPS) for Inpatient Psychiatric Facilities (IPF).  The per diem prospective payment system was implemented for inpatient psychiatric services that are furnished in a psychiatric hospital, or in psychiatric units in acute care hospitals or critical access hospitals.

The primary purpose of this IPF PPS proposed rule is to update the payment rates for FY 2020 using the most recently available data.  The IPF PPS applies to approximately 1,600 inpatient psychiatric facilities and is associated with furnishing covered inpatient psychiatric services, including services in psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital.

Background on the IPFQR Program

The IPFQR Program gives consumers care quality information to help them make more informed decisions about their healthcare options. This includes providing consumers with data about quality measures that aim to assess and foster improvement in the quality of care provided to patients in psychiatric facilities.  All IPFs paid under the IPF PPS have to meet IPFQR Program requirements. The IPFQR Program encourages facilities and clinicians to improve the quality of inpatient care. The program helps by making sure that providers know about and report on the best practices for their facilities and type of care they give by submitting quality data to CMS annually.

Proposed Changes to Payments under IPF

Update to IPF Payments
CMS estimates total IPF payments to increase by 1.7 percent or $75 million in FY 2020. The IPF market basket update, which is used to update IPF payment rates, is 3.1 percent.  After adjusting that 3.1 percent by two reductions required by law (the productivity adjustment of 0.5 percentage point and a 0.75 percentage point reduction), the net market basket update to IPF payment rates is 1.85 percent. Additionally, estimated payments to IPFs are reduced by 0.15 percentage point due to updating the threshold amount used in calculating outlier payments.

Revise and Rebase the IPF PPS Market Basket
For FY 2020, CMS is proposing to rebase and revise the IPF market basket to reflect a 2016 base year from a 2012 base year.  Since the IPF PPS inception, the market basket used to update IPF PPS payments has been rebased and revised to reflect more recent data.

Inpatient Psychiatric Facility Quality Reporting Program
For FY 2020, CMS is proposing to adopt of one new claims-based measure beginning with the FY 2021 payment determination and subsequent years.  This measure, Medication Continuation Following Inpatient Psychiatric Discharge (National Quality Forum #3205), assesses whether patients admitted to IPFs with diagnoses of Major Depressive Disorder (MDD), schizophrenia, or bipolar disorder filled at least one evidence-based medication within two days prior to discharge or during the 30-day post-discharge period.

The FY 2020 IPF PPS proposed rule can be downloaded from the Federal Register at: CMS encourages comments on this proposed rule and will accept comments until June 17, 2019.