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CMS Issues FY 2023 Inpatient Psychiatric Facility PPS Proposed Rule

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The Centers for Medicare & Medicaid Services (CMS) has released its proposed rule updating payments to inpatient psychiatric facilities (IPFs) for fiscal year (FY) 2023. Comments on the proposed rule are due by 2 p.m. (PT) on May 31. 

For FY 2023, CMS proposes to update the IPF prospective payment system (PPS) payment rates by 2.7% based on the IPF market basket update of 3.1%, less a 0.4 percentage point productivity adjustment. In addition, the proposed rule contains an adjustment to the outlier threshold to maintain outlier payments at 2% of total payments. Overall, CMS estimates IPF payments for FY 2023 would increase by 1.5% (or $50 million) relative to payments in FY 2022. 

CMS also proposes a policy intended to mitigate instability in the wage index. Specifically, for FY 2023 and subsequent years, CMS proposes to apply a 5% cap on decreases in the IPF PPS wage index.  

In addition, CMS seeks comments on its IPF PPS refinement analysis, which studies potential changes to the payment adjustments using the most recently available data, and reassesses important aspects of the IPF PPS payment regression model. Currently, the IPF PPS uses adjustment factors derived from the original regression model used for implementation of the IPF PPS in 2005.  

CMS does not propose any changes for the IPF Quality Reporting Program for FY 2023. However, the agency seeks comments on five specific areas to inform its approach to advancing health equity by leveraging the quality reporting programs: identification of goals and approaches for measuring health care disparities and using measure stratification across CMS quality programs; guiding principles for selecting and prioritizing measures for disparity reporting across CMS quality programs; principles for social risk factor and demographic data selection and use; identification of meaningful performance differences; and guiding principles for reporting disparity results. 

Additional information is available in a CMS fact sheet.