FR 2025-06298

The proposed rule by the Centers for Medicare & Medicaid Services (CMS) seeks to update how Inpatient Psychiatric Facilities (IPFs) are paid for under Medicare. This document is vital as it outlines payment changes that could significantly affect how these facilities operate and serve patients. The proposed updates aim to increase payments by 2.4% for the fiscal year 2026, with adjustments in several reporting and payment methodologies.

General Summary

CMS is proposing changes to payment rates and quality reporting measures for IPFs. The key financial adjustment is a proposed increase in payment, using a market basket increase factor of 3.2%, reduced by a productivity adjustment to net a 2.4% rise. Alongside, there are proposed changes to various data reporting processes in an effort to reduce administrative burdens. Importantly, CMS plans to remove several quality measures from the reporting requirements, such as COVID-19 vaccination coverage and health equity commitment, citing that their cost outweighs the benefits.

Significant Issues and Concerns

There are multiple significant issues within the proposal. A primary concern is the proposed increase in the rural payment adjustment from 17% to 18% without providing a detailed justification or necessity analysis. Moreover, the recalibration of the teaching adjustment based on recent costs analysis raises questions on how this directly improves patient care.

CMS proposes to remove multiple quality reporting measures, citing cost concerns. This could lead to essential data not being collected, which might impact the assessment of care quality. Additionally, the rule's complex language could obstruct understanding, particularly among stakeholders not specialized in regulatory jargon.

There is also a lack of substantial discussion on potential downsides or alternatives to the regulatory actions proposed, especially regarding the removal of certain measures that might affect the transparency and quality of healthcare services.

Impacts on the Public

Broadly, the proposal could lead to changes in how psychiatric facilities deliver services to Medicare patients. A payment increase to IPFs might enhance service delivery if effectively used. However, removing certain measures might obscure the public's understanding of a facility's quality and safety performance, potentially impacting patient choice and public trust.

Impacts on Specific Stakeholders

For rural facilities, the increase in the rural payment adjustment might provide more resources; yet, the rationale for this increase needs clarity to ensure equitable allocation of funds. Teaching hospitals might see adjustments in payments due to changes in the teaching factor, which could impact educational aspects of psychiatric training.

Removing the reporting requirements may ease administrative pressures on facilities but might reduce the accountability and transparency of healthcare delivery. This, in turn, might negatively affect patients by limiting the available data with which to compare facility performance. For policymakers and healthcare administrators, these changes might necessitate a recalibration of oversight strategies to maintain or enhance quality of care without the previously required measures.

The proposal introduces updates to the Extraordinary Circumstance Exception (ECE) policy, which could provide flexibility in reporting relief during extraordinary events. However, the lack of detailed examples or scenarios in the rule may lead to inconsistent application by facilities.

Overall, this rulemaking could considerably alter the operational landscape for IPFs, affecting how facilities receive and report on payments under Medicare. While it aims to reduce administrative burdens and streamline processes, it must ensure that essential quality data is not sacrificed in the pursuit of cost efficiency.

The proposed rule document outlines several financial adjustments and implications regarding the Medicare prospective payment system for Inpatient Psychiatric Facilities (IPFs). These updates reflect significant financial changes and allocations that impact various aspects of healthcare delivery in psychiatric facilities.

One of the primary financial references is the increase of the IPF PPS Federal per diem base rate from $876.53 to $891.99. This adjustment represents a typical update to ensure the rates reflect current cost structures and economic conditions. The update is derived from a market basket increase of 3.2%, which is then reduced by a 0.8% productivity adjustment. Such updates are routine but significant as they directly influence the payments that facilities receive.

A similar adjustment was made for electroconvulsive therapy (ECT) treatments, with the payment per treatment proposed to increase from $661.52 to $673.19. Again, this reflects the broader adjustments in payment rates meant to account for inflation and changes in economic factors affecting healthcare provision costs.

The proposal also considers altering the fixed dollar loss threshold amount from $38,110 to $39,360, which is crucial for maintaining the estimated outlier payments at 2% of total payments. Outlier payments are designed to compensate for extremely high-cost cases, which might otherwise financially burden facilities disproportionately.

Within the document, there are cost references related to the administrative burden of specific measures under the IPFQR Program. For instance, the removal of the Facility Commitment to Health Equity measure is noted to alleviate an estimated annual burden of approximately 267 hours at a cost of $11,978. Similarly, the removal of the COVID-19 Vaccination Coverage Among Healthcare Personnel measure and other social drivers of health measures are expected to save on data collection and reporting costs significantly, with calculated savings amounting to $1,731,712 for the CY 2026 and an increase in savings forecast to $1,746,474 beginning CY 2027.

Regarding labor costs, the document reflects an update to the wage estimates for activities performed by Medical Records Specialists from $52.12/hr to $55.38/hr and for activities by individuals from $24.04/hr to $25.63/hr. These adjustments ensure that the financial impacts of staffing and administrative functions are measured accurately in the economic evaluations.

One of the identified issues with these financial allocations is the increased rural payment adjustment from 17% to 18% for rural IPFs without clear justification. This increase could raise questions about the necessity of such a change and whether the additional financial burden on the system reflects improved patient care outcomes in these areas.

Additionally, there is a significant focus on the cost implication of removing certain measures related to health equity and COVID-19 within the IPFQR Program. The justification predominantly centers around the cost outweighing the benefits of retaining these measures. However, stakeholders might question whether this removal undermines critical data collection that could inform healthcare improvements and policy decisions.

These financial proposals, while aimed at modernizing and correctly aligning payments, raise potential concerns about whether the cost-saving measures adequately consider the broader implications on healthcare quality and equity. Thus, while these changes in financial allocations reflect necessary regulatory updates, their impact on healthcare delivery quality, especially concerning regulatory measures, necessitates careful consideration and transparency to ensure stakeholders are aligned on the benefits and drawbacks.