The Centers for Medicare & Medicaid Services (CMS) released its final rule for the 2025 Medicare Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) on Wednesday.

The new rule makes changes to Medicare payments as well as to the Inpatient Psychiatric Facilities Quality Reporting Program. The payment adjustments include a 2.5% net rate increase, patient-level and wage-based payment methodologies, and a big increase in rates for electroconvulsive therapy (ECT). It also issues a new request for information about standardized patient assessments and ancillary data collection.

For the federal fiscal year 2024, CMS will raise IPF PPS rates by 2.8% but will adjust the rate downward for outlier payments. Cumulative rates will decrease what CMS will pay in 2025 by about 0.3%. The net increase represents a $65 million increase in overall spending. However, the reimbursement rate for electroconvulsive therapy will increase from $385.58 per treatment in federal fiscal year 2024 to $661.52 in fiscal year 2025, a 72% increase.

ECT is a longstanding therapy for severe mental health symptoms. It is called the gold standard for suicidality and severe depression.

Patient-level adjustment factors to payment rates have been updated to reflect data from calendar years 2019 through 2021. CMS is also seeking feedback for facility-level payment adjustments. It will also tie wage index-based adjustments to Core‑Based Statistical Area (CBSA) Labor Market Areas data.

The quality reporting program will require facilities to report 30-day, all-cause emergency department visits following an inpatient psychiatric facility stay. The reports are risk-adjusted and will track adults. CMS already requires facilities to track readmissions after psych facility stays. The quality program will not, however, require patient-level data to be reported on a quarterly basis as previously proposed based on public feedback.