On August 2, 2012, CMS issued a notice setting out FY 2013 Medicare prospective payment rates for services provided by inpatient psychiatric facilities (IPFs).  The updated rates will apply to discharges from IPFs on or after October 1, 2012, and will remain in effect through September 30, 2013.  According to the notice, CMS will increase the IPF Federal per diem base rate to $698.51—from the $685.01 FY 2012 base rate.  To arrive at the FY 2013 base rate, CMS applied, among other things, a 1.9 percent net market basket adjustment to the FY 2012 base rate.  That adjustment reflects the FY 2008-based Rehabilitation, Psychiatric, and Long Term Care market basket rate of 2.7 percent, a 0.1 percent market basket reduction, and a 0.7 percent productivity reduction.  The market basket and productivity reductions are both required under the Affordable Care Act.

CMS also states in the notice that it will raise the high-cost outlier threshold from $7,340 in FY 2012 to $11,600 in FY 2013.  CMS explains that this adjustment is necessary to maintain outlier payments at 2 percent of total payments to IPFs in FY 2013.

CMS estimates that the overall economic impact of the notice will be approximately $36 million in increased Medicare payments to IPFs during FY 2013.

In addition, CMS notes that it now has enough data to begin analyzing whether and to what extent it will make refinements to the IPF prospective payment system.  CMS says that it expects to provide its analysis and any proposed refinements in FY 2014 rulemaking.

Click here to view the notice, which will be published in the Federal Register on August 7, 2012.

Reporter, Greg Sicilian, Atlanta, +1 404 572 2810, gsicilian@kslaw.com.