Medicare program; prospective payment system for inpatient psychiatric facilities. Final rule

Area of Science:

• Healthcare Policy
• Medical Economics
• Hospital Administration

Background:

• Current Medicare payment system for inpatient psychiatric services relies on reasonable cost-based reimbursement.
• The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) mandated changes to this system.

Purpose of the Study:

• To establish a prospective payment system (PPS) for Medicare payments to psychiatric hospitals and units.
• To implement Section 124 of the BBRA.

Main Methods:

• This document is a final rule outlining the establishment of the PPS.
• The rule details the framework and operational aspects of the new payment system.

Main Results:

• The prospective payment system will replace the existing reasonable cost-based payment system.
• This change affects payments for inpatient hospital services in psychiatric hospitals and psychiatric units of acute care and critical access hospitals.

Conclusions:

• The implementation of a PPS is expected to standardize Medicare payments for psychiatric inpatient services.
• This regulatory change signifies a shift in financial management for psychiatric facilities reimbursed by Medicare.