The Centers for Medicare & Medicaid Services (CMS) is proposing to increase Medicare inpatient psychiatric facility (IPF) payments by $75 million – a 1.7% boost – in fiscal year (FY) 2020. Specifically, CMS proposes a net market basket update of 1.85%, reflecting a 3.1% market basket update reduced by two statutory reductions. CMS estimates that payments will be further reduced by 0.15 percentage points due to a proposed outlier fixed-dollar loss threshold adjustment. If finalized, the IPF prospective payment system (PPS) federal per diem base rate would increase from $782.78 in FY 2019 to $803.48 in FY 2020 (with a $787.70 per diem base rate for providers who fail to report quality data).

Other proposed provisions include: rebasing the IPF market basket using a 2016 base year (instead of 2012) base year; the addition of a new medication continuation measure for the FY 2021 payment determination; and elimination of the current one-year lag in wage index data. CMS will accept comments on the proposed rule until June 17, 2019.