In 1999, a significant change in the landscape of mental health care payments was set in motion by Section 124 of the Balanced Budget Refinement Act (BBRA). This legislation mandated the creation of a per diem Prospective Payment System to standardize payments for inpatient psychiatric services. These services are provided in psychiatric hospitals, psychiatric units of acute care hospitals, and critical access hospitals.
The Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) aims to align financial incentives with the complexity and resource demands of treating diverse psychiatric conditions. It requires the implementation of a patient classification system which reflects the differences in patient resource use and costs among hospitals. This ensures that facilities treating more resource-intensive patients receive larger prospective payments.
Demystifying IPF PPS
The IPF PPS calculates a standardized federal per diem payment rate for all inpatient psychiatric facilities (IPF). This rate is based on the national average costs of routine operations, ancillary services, and capital expenses for each day of psychiatric care in an IPF, with adjustments made for budget neutrality. The federal per diem payment rate is further tailored to reflect specific patient and facility characteristics associated with notable cost variations.
Patient-level adjustments in the IPF PPS account for factors such as age, certain medical severity diagnosis-related groups (MS-DRGs), and selected comorbidity categories. Facility adjustments include modifications for wage index, rural location, teaching status, the presence of a qualifying emergency department, and a cost-of-living adjustment for facilities in Alaska or Hawaii.
Additionally, the IPF PPS incorporates an outlier policy to accommodate extraordinarily high-cost patients, an interrupted stay policy, and provides extra payments for each electroconvulsive therapy (ECT) treatment.
How the IPF PPS Integrates with the IPF Quality Reporting Program
All inpatient psychiatric facilities (IPFs) eligible to bill CMS under the IPF PPS can participate in the IPF Quality Reporting (IPFQR) Program. To receive a full Annual Payment Update, IPFs must meet all IPFQR Program requirements. Failure to report required quality data results in a 2.0 percentage point reduction in the annual payment update, which may cause the update to be less than zero for a given fiscal year. This reduction affects the federal per diem payment rate and ECT payment per treatment for the upcoming fiscal year. However, this reduction only applies to the fiscal year in question and is not factored into the payment calculation for subsequent fiscal years. The IPFQR Program collects quality measure data from participating facilities and publicly reports it to aid consumers.
Current IPFQR Program Measures
Chart-Abstracted Measures
Facilities must report on the following chart-abstracted measures annually:
- HBIPS-2: Hours of Physical Restraint Use
- HBIPS-3: Hours of Seclusion Use
- TR: Transition Record with Specified Elements Received by Discharged Patients
- SMD: Screening for Metabolic Disorders
- SUB-2 and SUB-2a: Alcohol Use Brief Intervention Provided or Offered
- SUB-3 and SUB-3a: Alcohol and Other Drug Use Disorder Treatment Provided or Offered at Discharge
- TOB-3 and TOB-3a: Tobacco Use Treatment Provided or Offered at Discharge
- IMM-2: Influenza Immunization
Structural Measure
Facilities must attest annually to the structural measure:
- FCHE: Facility Commitment to Health Equity
NHSN Measure
The following NHSN measure requires quarterly reporting:
- COVID HCP: COVID-19 Vaccination Coverage Among Health Care Personnel
Claims-Based Measures
Facilities are evaluated on the following claims-based measures, calculated by CMS:
- Follow-Up After Psychiatric Hospitalization
- 30-Day All-Cause Unplanned Readmission Following Psychiatric Hospitalization in an Inpatient Psychiatric Facility
- Medication Continuation Following Inpatient Psychiatric Discharge
New CMS Measure for the IPFQR Program
In the final rule, CMS is introducing a new measure for the IPF Quality Reporting Program: the 30-Day Risk-Standardized All-Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge measure (IPF ED Visit measure). This measure evaluates the percentage of patients aged 18 and older who visit an emergency department within 30 days of discharge from an inpatient psychiatric facility (IPF) without being readmitted.
This measure complements the existing Thirty-Day All-Cause Unplanned Readmission Following Psychiatric Hospitalization measure by focusing on patients who visit the emergency department without readmission. By adopting the IPF ED Visit measure, the program aims to provide a more comprehensive evaluation of post-discharge care, encouraging better discharge planning and care coordination.
Reporting
CMS has decided to maintain the current annual reporting requirement for these measures.
Barrins and Associates
Barrins can help you to implement a highly effective IPFQR program. Call us today to learn how we can assist you with this process.
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