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CMS Releases Inpatient Psychiatric Final Rule: Key Revisions to Note for 2024

CMS recently released the Inpatient Psychiatric Facility Prospective Payment System (IPF IPPS) Final Rule for Fiscal Year (FY) 2024 – detailing a number of changes that will impact behavioral health hospitals and units across the nation. The rule is set to go into effect on October 1, 2023.

Key takeaways from the IPF IPPS:1,2

    • Updated payment rates: CMS is increasing IPF PPS payment rates by 2.3%, or 70% million, for FY 2024. The increased payment rates will help behavioral health hospitals and units who have struggled to keep up with recent staffing, financial and regulatory obstacles.
    • New quality measures: Two new quality measures have been added to the IPF Quality Reporting Program (QRP) for FY 2024. The implementation of these quality measures (in addition to the revision and removal of other measures) will result in more than $8 million in cost savings.
        • Facility Commitment to Health Equity measure: This measure assesses an IPF’s commitment to health equity across five domains: (1) Equity is a Strategic Priority; (2) Data Collection; (3) Data Analysis; (4) Quality Improvement; and (5) Leadership Engagement.
        • Screening for Social Drivers of Health measure: This measure assesses the percentage of patients, aged 18+ at the time of admission, who are screened for five specific health-related social needs — food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety.
    • Modifications to excluded units: As the need for behavioral health continues to rise annually, including availability of psychiatric beds, CMS is modifying certain regulations to allow hospitals to open a behavioral health unit at any time during the cost-reporting period as opposed to only at the start of a hospital’s cost-reporting period.

These modifications will make it easier for hospitals to open new units, therefore alleviating administrative burdens and increasing critical behavioral health access to patients.

In addition to the changes mentioned above, the Psych IPPS Final Rule also includes several other changes worth noting. For instance, CMS is:

    • Requiring IPFs to provide more detailed information about their patient populations in their cost reports.
    • Expanding the list of conditions that qualify for IPF care.
    • Establishing a new process for resolving payment disputes between IPFs and CMS.

The revisions and additions brought forth by CMS in this final rule are positive. Behavioral health hospitals and units will be better positioned to provide high quality, effective care to patients and will therefore improve the overall health and well-being of their local community.


    1. The Centers for Medicare and Medicaid Services. (2023b, July). Fact sheet fiscal year 2024 Medicare inpatient psychiatric facility prospective payment system and Quality Reporting Final Rule. CMS.,at%202.0%25%20of%20total%20payments.
    2. Medicare Program; FY 2024 Inpatient Psychiatric Facilities Prospective Payment System-Rate Update. Federal Register. (2023, July).

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