CMS Proposes 2.7% Medicare Payment Increase to Inpatient Psychiatric Facilities

The U.S. Centers for Medicare & Medicaid Services (CMS) has released its 2023 proposed payment rule for Medicare-reimbursed inpatient psychiatric facilities (IPFs).

In particular, the agency is looking to raise the Medicare rates for IPF operators by 2.7%. The boost follows a 2% payment bump finalized for fiscal year 2022.

“For FY 2023, CMS is proposing to update the IPF [prospective payment system] payment rates by 2.7%, based on the proposed IPF market basket update of 3.1%, less [than] a 0.4 percentage point productivity adjustment,” CMS noted in its announcement.


Under the proposed payment rule, released late Thursday, overall Medicare payments to IPFs are estimated to increase by 1.5% – or about $50 million – compared to this year.

The proposed rule from CMS would also set a 5% cap on decreases in the IPF prospective payment system’s wage index to mitigate instability in the payment system due to wage-index decreases.

“Specifically, CMS is proposing that an IPF’s wage index for FY 2023 and subsequent years would not be less than [95%] of its final wage index calculated in the prior FY,” the agency explained.


The proposed rule includes a request for comment on the data analysis behind the IPF payment adjustments. It also does not include any changes to the IPF Quality Reporting Program.

It also includes a request for information (RFI) to help CMS address “persistent inequities in health outcomes in the U.S. through improving data collection to better measure and analyze disparities across programs and policies.”

The RFI is intended to help CMS’ considerations in five areas: identifying approaches to measuring health care disparities across CMS quality programs; guiding principles for selecting disparity reporting measures; principles for social risk factor and demographic data selection and use; identification of meaningful performance differences; and guiding principles for reporting disparity results.

The issuance of the proposed rule begins a comment period that ends on May 31.

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