Psychiatric PPS

Medicare beneficiaries with serious mental illnesses or alcohol- and drug-related problems may be treated in inpatient psychiatric facilities.

Medicare pays for these services through the IPF prospective payment system, which uses pre-determined rates based primarily on the patient’s condition (age, diagnosis, comorbidities) and length of stay, and the location of the IPF. Medicare also provides additional payment for IPFs that are teaching hospitals, located in Alaska and Hawaii, and/or have emergency departments.

The IPF PPS rates are intended to cover all routine, ancillary and capital costs that efficient providers are expected to incur in furnishing inpatient psychiatric care.

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