CHA News Article

CMS Issues FFY 2016 IPF PPS Proposed Rule
Payments estimated to increase by 1.6 percent

The Centers for Medicare & Medicaid Services (CMS) has issued the attached proposed rule updating the inpatient psychiatric facility (IPF) prospective payment system (PPS) for federal fiscal year (FFY) 2016. CMS is proposing to update payments to IPFs by 1.6 percent, an approximately $80 million increase compared to FFY 2015. The proposed update reflects a new IPF-specific market basket estimate of 2.7 percent, reduced by a 0.6 percentage point multi-factor productivity adjustment and a 0.2 percentage point reduction required by law, as well as an additional 0.3 percent decrease to aggregate payments due to updating the outlier threshold.

CMS proposes a new-IPF specific market basket to replace the rehabilitation, psychiatric and long-term care (RPL) market basket. For FFY 2016, the proposed IPF market basket would be based on 2012 data, rather than the RPL’s 2008 data, from both freestanding and hospital-based IPFs. CMS also proposes to adopt the newest Office of Management and Budget (OMB) delineations for the FFY 2016 IPF PPS wage index and implement the changes using a one-year transition, with a 50/50 blended wage index for all providers.

The proposed rule also includes updates to the IPF quality reporting program. CMS proposes to adopt five additional measures for FFY 2018 and remove three measures, two in FFY 2017 and one in FFY 2018. In addition, CMS proposes changes to the data reporting requirements — specifically by requiring IPFs to report measure data as a single, yearly count rather than by quarter and age, and to report aggregate population counts for discharges as a single, yearly count rather than by quarter.

CHA is currently reviewing the proposed rule and will provide members with a more detailed summary in the coming weeks. Comments on the proposed rule are due June 23.