Medicare Program; FY 2025 Inpatient Psychiatric Facilities Prospective Payment System-Rate Update

<RULE> DEPARTMENT OF HEALTH AND HUMAN SERVICES <SUBAGY>Centers for Medicare & Medicaid Services</SUBAGY> <CFR>42 CFR Part 412</CFR> <DEPDOC>[CMS-1806-F]</DEPDOC> <RIN>RIN 0938-AV32</RIN> <SUBJECT>Medicare Program; FY 2025 Inpatient Psychiatric Facilities Prospective Payment System—Rate Update</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). <HD SOURCE="HED">ACTION:</HD> Final action. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This final action updates the prospective payment rates, the outlier threshold, and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities (IPF), which include psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital. This final action also revises the patient-level adjustment factors, the Emergency Department adjustment, and the payment amount for electroconvulsive therapy. These changes will be effective for IPF discharges occurring during the fiscal year (FY) beginning October 1, 2024 through September 30, 2025 (FY 2025). In addition, this final action finalizes the adoption of a new quality measure. It does not finalize modifications to the reporting requirements under the IPF Quality Reporting Program beginning with the FY 2027 payment determination. Furthermore, this final action summarizes comments received through Requests for Information regarding potential future revisions to the IPF PPS facility-level adjustments and regarding the development of a standardized IPF Patient Assessment Instrument. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> This final action is effective on October 1, 2024. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> The IPF Payment Policy mailbox at <E T="03">IPFPaymentPolicy@cms.hhs.gov</E> for general information. Nick Brock (410) 786-5148, for information regarding the inpatient psychiatric facilities prospective payment system (IPF PPS) and regulatory impact analysis. Kaleigh Emerson (470) 890-4141, for information regarding the inpatient psychiatric facilities quality reporting program (IPFQR). </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <E T="03">Plain Language Summary:</E> In accordance with 5 U.S.C. 553(b)(4), a plain language summary of this rule may be found at <E T="03">https://www.regulations.gov/.</E> <HD SOURCE="HD1">Availability of Certain Tables Exclusively Through the Internet on the CMS Website </HD> Addendum A to this final rule summarizes the fiscal year (FY) 2025 IPF PPS payment rates, outlier threshold, cost of living adjustment factors (COLA) for Alaska and Hawaii, national and upper limit cost-to-charge ratios, and adjustment factors. In addition, Addendum B to this final rule shows the complete listing of ICD-10 Clinical Modification (CM) and Procedure Coding System (PCS) codes, the FY 2025 IPF PPS comorbidity adjustment, and electroconvulsive therapy (ECT) procedure codes. Addenda A and B to this final rule are available on the CMS website at: <E T="03">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientPsychFacilPPS/tools.html.</E> Tables setting forth the FY 2025 Wage Index for Urban Areas Based on Core Based Statistical Area (CBSA) Labor Market Areas, the FY 2025 Wage Index Based on CBSA Labor Market Areas for Rural Areas, and a county-level crosswalk of the FY 2024 CBSA Labor Market Areas to the FY 2025 CBSA Labor Market Areas are available exclusively through the internet, on the CMS website at <E T="03">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/IPFPPS/WageIndex.html.</E> <HD SOURCE="HD1">I. Executive Summary</HD> <HD SOURCE="HD2">A. Purpose</HD> This final rule updates the prospective payment rates, the outlier threshold, and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities (IPFs) for discharges occurring during fiscal year (FY) 2025 (beginning October 1, 2024, through September 30, 2025). This rule also adopts the Core-Based Statistical Area (CBSA) Labor Market Areas for the IPF PPS wage index as defined in the Office of Management and Budget (OMB) Bulletin 23-01. In addition, this rule refines the patient-level adjustment factors and increases the payment amount for electroconvulsive therapy (ECT) treatments. This final rule also clarifies the eligibility criteria for an IPF to be approved to file all-inclusive cost reports. This rule includes a summary of the public comments received to inform revisions to the payment adjustments for rural location and teaching status, along with a potential payment adjustment for safety net population. In addition, this final rule includes a summary of the public comments received in response to our request for information (RFI) regarding the creation of a patient assessment instrument (PAI), as mandated by section 4125 of the Consolidated Appropriations Act (CAA), 2023 (hereafter referred to as CAA, 2023) (Pub. L. 117-328). Lastly, this final rule updates quality measures and discusses reporting requirements under the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program. <HD SOURCE="HD2">B. Summary of the Major Provisions</HD> <HD SOURCE="HD3">1. Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS)</HD> For the IPF PPS, we are finalizing our proposals to: • Revise the patient-level IPF PPS adjustment factors and increase the ECT per treatment payment amount. • Update the IPF PPS wage index to use the CBSAs defined within OMB Bulletin 23-01. • Clarify the eligibility criteria for an IPF to be approved to file all-inclusive cost reports. Only a government-owned or tribally owned facility satisfies these criteria and is eligible to file its cost report using an all-inclusive rate or no charge structure. • Make technical rate setting updates: The IPF PPS payment rates will be adjusted annually for input price inflation, as well as statutory and other policy factors. This rule updates: ++ The IPF PPS Federal per diem base rate from $895.63 to $876.53. ++ The IPF PPS Federal per diem base rate for providers who failed to report quality data to $859.48. ++ The ECT payment per treatment from $385.58 to $661.52. ++ The ECT payment per treatment for providers who failed to report quality data to $648.65. ++ The labor-related share from 78.7 percent to 78.8 percent. ++ The wage index budget neutrality factor to 0.9996. This rule applies a refinement standardization factor of 0.9524. ++ The fixed dollar loss threshold amount from $33,470 to $38,110, to maintain estimated outlier payments at 2 percent of total estimated aggregate IPF PPS payments. <HD SOURCE="HD3">2. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program</HD> For the IPFQR Program, we are finalizing our proposal to adopt the 30-Day Risk- Standardized All-Cause Emergency Department (ED) Visit Following an IPF Discharge measure beginning with the FY 2027 payment determination. We are not finalizing our proposal to modify reporting requirements to require IPFs to submit patient-level data on a quarterly basis. We also refer readers to the summary of the comments to our RFI in which we solicited comments to inform elements to be included in the IPF PAI, which the CAA, 2023 requires the Centers for Medicare & Medicaid Services (CMS) to develop and implement for Rate Year (RY) 2028. <HD SOURCE="HD2">C. Summary of Impacts</HD> <GPH SPAN="3" DEEP="99"> <GID>ER07AU24.000</GID> </GPH> <HD SOURCE="HD1">II. Background</HD> <HD SOURCE="HD2">A. Overview of the Legislative Requirements of the IPF PPS</HD> Section 124 of the Medicare, Medicaid, and State Children's Health Insurance Program Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) required the establishment and implementation of an IPF PPS. Specifically, section 124 of the BBRA mandated that the Secretary of the Department of Health and Human Services (the Secretary) develop a per diem payment perspective system (PPS) for inpatient hospital services furnished in psychiatric hospitals and excluded psychiatric units including an adequate patient classification system that reflects the differences in patient resource use and costs among psychiatric hospitals and excluded psychiatric units. “Excluded psychiatric unit” means a psychiatric unit of an acute care hospital or of a Critical Access Hospital (CAH), which is excluded from payment under the Inpatient Prospective Payment System (IPPS) or CAH payment system, respectively. These excluded psychiatric units will be paid under the IPF PPS. Section 405(g)(2) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-17-3) extended the IPF PPS to psychiatric distinct part units of CAHs. Sections 3401(f) and 10322 of the Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by section 10319(e) of that Act and by section 1105(d) of the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) (hereafter referred to jointly as “the Affordable Care Act”) added subsection (s) to section 1886 of the Act. Section 1886(s)(1) of the Act titled “Reference to Establishment and Implementation of System,” refers to section 124 of the BBRA, which relates to the establishment of the IPF PPS. Section 1886(s)(2)(A)(i) of the Act requires the application of the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act to the IPF PPS for the rate year (RY) beginning in 2012 (that is, a RY that coincides with a FY) and each subsequent RY. Section 1886(s)(2)(A)(ii) of the Act required the application of an “other adjustment” that reduced any update to an IPF PPS base rate by a percentage point amount specified in section 1886(s)(3) of the Act for the RY beginning in 2010 through ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 477k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━