• CMS Publishes Update to Inpatient Psychiatric Facility PPS
  • May 6, 2010 | Author: Christina Ann Gonzalez
  • Law Firm: King & Spalding LLP - Houston Office
  • On April 30, 2010, the Centers for Medicare & Medicaid Services (CMS) published an update to the Inpatient Psychiatric Facilities Prospective Payment System for Rate Year beginning July 1, 2010 (RY 2011) (75 Fed. Reg. 23106). As a result of the update, inpatient psychiatric facilities (IPFs) will see a net increase in prospective payment system (PPS) payments of approximately $95 million from RY 2010 to RY 2011.

    The net increase in payments is due, in part, to a 2.4% market basket increase, although provisions of the Patient Protection and Affordable Care Act (Pub. L. 111-148) require the application of an “Other Adjustment” that reduces any update to the IPF PPS base rate by 0.25%. Noting the process for calculating the outlier fixed dollar loss threshold amount contained in the May 2006 IPF PPS final rule, CMS stated in the notice that such amount is decreased to $6,372 in order to “maintain estimated outlier payments at 2 percent of total estimated IPF payments for RY 2011.” (75 Fed. Reg. at 23120).

    The notice also updates the per diem payment rates published in the May 2009 IPF PPS, increasing the base rate from $651.76 to $665.71 after application of the market basket increase, the “Other Adjustment,” and the wage index budget neutrality factor of 0.9999 to the RY 2010 per diem base rate. The updated PPS rates for IPFs are effective for discharges occurring on or after July 1, 2010 through June 30, 2011.

    The notice also discussed comments to the May 2009 IPF PPS that suggested CMS modify the IPF PPS resident cap policy to allow the cap to increase in situations where residents from a psychiatry residency program must be relocated from one program to another due to facility or program closure.

    CMS responded that it will consider all comments in regard to such a policy change in the future. CMS did not request comment on the April 30 notice, finding it “unnecessary to undertake notice and comment rule making for the update in this notice because the update does not make any substantive changes in policy, but merely reflects the application of previously established methodologies.” (75 Fed. Reg. at 23121).