CMS finalizes a 2.3% payment increase for inpatient psychiatric facilities

The Centers for Medicare & Medicaid Services July 29 issued a final rule for the inpatient psychiatric facility prospective payment system for fiscal year 2027. CMS will increase IPF payments by a net 2.3%, equivalent to $60 million, in FY 2027. The payment update reflects a market basket update of 3.2%, minus a productivity adjustment of 0.9 percentage points. CMS also finalized its proposal to implement a cap on outlier payments but will defer implementation until FY 2028 and exclude facilities with fewer than 50 stays per year. 

For the IPF Quality Reporting Program, CMS removes two measures focused on alcohol and tobacco use screening and treatment effective with the calendar year 2026 reporting/FY 2028 payment periods. CMS also will implement the standardized IPF Patient Assessment Instrument mandated by the Consolidated Appropriations Act of 2023 but with several modifications, including a lower compliance threshold and longer timeline before mandatory submission.

These updates become effective Oct. 1, 2026. AHA members will receive a Regulatory Advisory with more details.