Inpatient rehabilitation facilities will receive a 3% increase in pay for fiscal 2025 while inpatient psychiatric facilities will have a 2.8% pay bump for the next fiscal year, CMS says in its finalized pay rules released Wednesday (July 31), which also expand new social determinants of health reporting metrics and rebase the wage indexes.
The Biden administration had proposed a lower pay hike earlier this year, adjusting it 0.2% up from 2.8% for inpatient rehabilitation facilities and 2.6% for inpatient psychiatric facilities after CMS reviewed the IHS Global Inc.âs second quarter 2024 forecast.
Like it did for the fiscal 2025 hospice final pay rule, CMS used the White House Office of Management and Budgetâs core-based statistical areas to update the wage index for both facilities. CMS assures providers the permanent cap will keep facilities from losing more than 5% of their pay due to the change.
Facilities that will transition from rural to urban status under the new base will have their rural adjustments phased out over three years beginning in fiscal 2025, CMS says. Eight inpatient rehabilitation facilities will be affected, and up to 68 inpatient psychiatric facilities could be reclassified under the new system, the administration estimates.
Inpatient Rehabilitation Facilities
In addition to approving a 3% payment increase, CMS finalized updates to the outlier threshold to maintain outlier payments at 3% of total payments. It estimates these final technical rate setting changes will net IRF payments $280 million, or a $300 million increase in payment rates minus $20 million due to the update for the outlier threshold.
CMS also finalized the addition of three new areas to the IRF Quality Reporting Program under the social determinants of health category: living situation, food and utilities. This will bring the IRF requirements in line with the housing instability, food insecurity and utility difficulties data that hospitals began reporting in January 2024 and that inpatient psychiatric facilities are scheduled to begin reporting in January 2025. IRFs will be required to report this data in 2028.
â[T]he collection of the proposed SDOH assessment items will support IRFs that wish to understand the health disparities that affect their populations, facilitate coordinated care, foster continuity in care planning, and assist with the discharge planning process from the IRF setting,â CMSâ final IRF rule says.
Some commenters on the proposed rule were worried these new reporting requirements could increase administrative burdens on providers, but other stakeholders commended CMS for the additional data points and said many providers already collect this information as part of their intake activities.
Inpatient Psychiatric Facilities
Psychiatric facilitiesâ pay increase for fiscal 2025 is more complicated. The outlier threshold update adjusts the 2.8% increase in pay next fiscal year down to a 2.5%, or $65 million, pay bump. While this is less than the proposed 2.6% pay hike from earlier this year, CMS raised the proposed market basket increase by 0.2% after stakeholders raised concerns that it was less than previous years and might be insufficient to meet skyrocketing costs.
âThey stated that with the significant increase in the costs of labor, pharmaceuticals, and supplies, the payment update is inadequate,â the final rule says. âCommenters stated that labor-related inflation has been driven in large part by a severe workforce shortage. The commenters also stated that hospitals are turning to costlier contract labor to sustain operations; one commenter noted that they believed that contract labor costs increased 258 percent from 2019 through 2023.â
CMS should give inpatient psychiatric facilities a more robust payment update in fiscal 2025 until the administration can adopt a more accurate prospective payment system, stakeholders said. They also cited the Medicare Payment Advisory Commission report, which found Medicare has failed to cover the cost of caring for patients in hospital-based and freestanding nonprofit psychiatric facilities since at least 2016.
CMS did not directly address stakeholdersâ requests to adopt a more accurate prospective payment system, but it pointed out the company CMS contracts to forecast the price proxies of the market basket considers labor cost trends.
The rule finalized Wednesday also changes certain reporting requirements so only government or tribally owned IPFs will file all-inclusive cost reports beginning Oct. 1, 2024.
âBy improving the reporting of ancillary costs and charges, CMS will be able to increase accuracy of future payment refinements to the IPF PPS, which will further advance behavioral health treatment and support IPFs that provide care to people with more complex and costlier conditions,â a CMS fact sheet says.
CMS also finalized a new measure in the IPF Quality Reporting Program: the 30-Day Risk-Standardized All-Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge measure. This claims-based measure will quantify how many adults had an emergency department visit, including observation stays, within 30 days of discharge from an inpatient psychiatric facility without subsequent admission. CMS says this new measure will provide a better assessment of post-discharge acute care and encourage improvements in discharge planning and care coordination.
The final pay rule includes a significant bump in reimbursements for electroconvulsive therapy — or as Medicare claims still call it âelectroshock therapyâ — going from $385.58 in fiscal 2024 to $661.52. CMS says while pay for the mental health treatment has been updated annually, it has not been recalculated based on more recent cost data since the inpatient psychiatric facility pay rule was created in 2005.
The prevalence of ECT therapy has declined from 6% of all stays in 2002 to 1.7% in 2022, though a total of 288 facilities had stays with ECT treatment in 2022. These stays are three times more costly than ones without the therapy — $44,687.50 per stay vs. $15,432.30 per stay, CMS estimates.
The agency decided not to finalize its proposal to have facilities submit patient-level quality data more frequently, instead keeping the report annual.
Inpatient Rehab, Psych Facilities Get Slight Pay Bump In Final Reg
bgov.com
August 1, 2024 3:58 pm
Inpatient rehabilitation facilities will receive a 3% increase in pay for fiscal 2025 while inpatient psychiatric facilities will have a 2.8% pay bump for the next fiscal year, CMS says in its finalized pay rules released Wednesday (July 31), which also expand new social determinants of health reporting metrics and rebase the wage indexes.
The Biden administration had proposed a lower pay hike earlier this year, adjusting it 0.2% up from 2.8% for inpatient rehabilitation facilities and 2.6% for inpatient psychiatric facilities after CMS reviewed the IHS Global Inc.âs second quarter 2024 forecast.
Like it did for the fiscal 2025 hospice final pay rule, CMS used the White House Office of Management and Budgetâs core-based statistical areas to update the wage index for both facilities. CMS assures providers the permanent cap will keep facilities from losing more than 5% of their pay due to the change.
Facilities that will transition from rural to urban status under the new base will have their rural adjustments phased out over three years beginning in fiscal 2025, CMS says. Eight inpatient rehabilitation facilities will be affected, and up to 68 inpatient psychiatric facilities could be reclassified under the new system, the administration estimates.
Inpatient Rehabilitation Facilities
In addition to approving a 3% payment increase, CMS finalized updates to the outlier threshold to maintain outlier payments at 3% of total payments. It estimates these final technical rate setting changes will net IRF payments $280 million, or a $300 million increase in payment rates minus $20 million due to the update for the outlier threshold.
CMS also finalized the addition of three new areas to the IRF Quality Reporting Program under the social determinants of health category: living situation, food and utilities. This will bring the IRF requirements in line with the housing instability, food insecurity and utility difficulties data that hospitals began reporting in January 2024 and that inpatient psychiatric facilities are scheduled to begin reporting in January 2025. IRFs will be required to report this data in 2028.
â[T]he collection of the proposed SDOH assessment items will support IRFs that wish to understand the health disparities that affect their populations, facilitate coordinated care, foster continuity in care planning, and assist with the discharge planning process from the IRF setting,â CMSâ final IRF rule says.
Some commenters on the proposed rule were worried these new reporting requirements could increase administrative burdens on providers, but other stakeholders commended CMS for the additional data points and said many providers already collect this information as part of their intake activities.
Inpatient Psychiatric Facilities
Psychiatric facilitiesâ pay increase for fiscal 2025 is more complicated. The outlier threshold update adjusts the 2.8% increase in pay next fiscal year down to a 2.5%, or $65 million, pay bump. While this is less than the proposed 2.6% pay hike from earlier this year, CMS raised the proposed market basket increase by 0.2% after stakeholders raised concerns that it was less than previous years and might be insufficient to meet skyrocketing costs.
âThey stated that with the significant increase in the costs of labor, pharmaceuticals, and supplies, the payment update is inadequate,â the final rule says. âCommenters stated that labor-related inflation has been driven in large part by a severe workforce shortage. The commenters also stated that hospitals are turning to costlier contract labor to sustain operations; one commenter noted that they believed that contract labor costs increased 258 percent from 2019 through 2023.â
CMS should give inpatient psychiatric facilities a more robust payment update in fiscal 2025 until the administration can adopt a more accurate prospective payment system, stakeholders said. They also cited the Medicare Payment Advisory Commission report, which found Medicare has failed to cover the cost of caring for patients in hospital-based and freestanding nonprofit psychiatric facilities since at least 2016.
CMS did not directly address stakeholdersâ requests to adopt a more accurate prospective payment system, but it pointed out the company CMS contracts to forecast the price proxies of the market basket considers labor cost trends.
The rule finalized Wednesday also changes certain reporting requirements so only government or tribally owned IPFs will file all-inclusive cost reports beginning Oct. 1, 2024.
âBy improving the reporting of ancillary costs and charges, CMS will be able to increase accuracy of future payment refinements to the IPF PPS, which will further advance behavioral health treatment and support IPFs that provide care to people with more complex and costlier conditions,â a CMS fact sheet says.
CMS also finalized a new measure in the IPF Quality Reporting Program: the 30-Day Risk-Standardized All-Cause Emergency Department Visit Following an Inpatient Psychiatric Facility Discharge measure. This claims-based measure will quantify how many adults had an emergency department visit, including observation stays, within 30 days of discharge from an inpatient psychiatric facility without subsequent admission. CMS says this new measure will provide a better assessment of post-discharge acute care and encourage improvements in discharge planning and care coordination.
The final pay rule includes a significant bump in reimbursements for electroconvulsive therapy — or as Medicare claims still call it âelectroshock therapyâ — going from $385.58 in fiscal 2024 to $661.52. CMS says while pay for the mental health treatment has been updated annually, it has not been recalculated based on more recent cost data since the inpatient psychiatric facility pay rule was created in 2005.
The prevalence of ECT therapy has declined from 6% of all stays in 2002 to 1.7% in 2022, though a total of 288 facilities had stays with ECT treatment in 2022. These stays are three times more costly than ones without the therapy — $44,687.50 per stay vs. $15,432.30 per stay, CMS estimates.
The agency decided not to finalize its proposal to have facilities submit patient-level quality data more frequently, instead keeping the report annual.