AHA Comments on CMS Inpatient Psychiatric Facility FY 2026 Proposed Payment Rule

June 10, 2025

The Honorable Mehmet Oz, M.D.
Administrator
Centers for Medicare & Medicaid Services
Hubert H. Humphrey Building
200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201

RE: Medicare Program; FY 2026 Inpatient Psychiatric Facilities Prospective Payment System – Rate Update (CMS-1831-P)

Dear Administrator Oz:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, and our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) inpatient psychiatric facility (IPF) prospective payment system (PPS) proposed rule for fiscal year (FY) 2026.

Ensuring timely access to high-quality psychiatric care remains one of the most pressing challenges in our health care system. IPFs play a vital role in stabilizing individuals in crisis and supporting recovery. As communities across the country face rising demand for mental health services, it is essential that Medicare payment policies support the sustainability and availability of these specialized providers.

To that end, we support several of the IPF PPS proposed rule provisions, including the proposed increases in the facility-level adjustments. We also appreciate the agency’s interest in deregulatory activities in the Medicare program and have submitted our comments through the request for information (RFI) website. We also support several aspects of CMS’ quality-related proposals, including its proposed removal of four measures from the quality reporting program.

However, we continue to have strong concerns about the proposed payment updates. The proposed net payment update of 2.4% is simply inadequate given the unrelenting financial headwinds faced by hospitals and health systems. Without adequate and sustainable payment updates, IPFs will struggle to maintain access to essential psychiatric services, particularly in underserved communities where these services are already limited. We are particularly concerned with the inappropriately large productivity cut that is being proposed. We urge the agency to re-examine the magnitude of this adjustment and its impact on Medicare payments.

View the detailed letter below.