On August 1, 2016, CMS published a notice updating prospective payment system (PPS) rates for Medicare services furnished by inpatient psychiatric facilities (IPFs) during fiscal year (FY) 2017. CMS is providing a 2.3% rate update for FY 2017, derived from a 2.8% IPF market basket update that is reduced by a 0.3 percentage point productivity adjustment and an additional 0.2 percentage point reduction under the Affordable Care Act. CMS also is updating the outlier fixed-dollar loss threshold amount from $9,580 to $10,120; CMS estimates that this will decrease payments by 0.1 percentage point. In addition, CMS is increasing the IPF PPS per diem rate from $743.73 to $761.37; IPFs that fail to report quality data will receive a FY 2017 per diem rate of $746.48. The notice also updates the wage index and the electroconvulsive therapy payment per treatment. CMS estimates that Medicare payments to IPFs will increase by 2.2% or $100 million in 2017 as a result of the various payment updates.