Section 1886(s)(4)(C) of the Social Security Act, amended by sections 3401(f) and 10322(a) of the Affordable Care Act requires IPFs to report quality data for 6 quality measures starting in fiscal 2013 for Medicare beneficiaries.   Beginning in FY 2015, two quality measures are added.   Failure to comply with these regulations will result in a 2 percent reduction to the applicable base rate for IPFs.  (Source: Medicare Learning Network publication Inpatient Psychiatric Facility Prospective Payment System).

A Behavioral specialty provider recently stated, “…we don’t use DRGs we use Inpatient Psychiatric Facility Prospective Payment System (IPF PPS).”  In fact, the facility is indeed using DRGs. According to CMS:

Mike Arrigo, Managing Partner & CEO No World Borders, Inc.

Michael Arrigo, Managing Partner, No World Borders

…IPF PPS, Federal per diem rates include inpatient operating and capital-related costs (including routine and ancillary services) and are determined based on:

  • Geographic factors:
    • A hospital wage index value is assigned to account for geographic differences in wage
    • The non-labor-related portion accounts for higher cost of living for IPFs located in Alaska and Hawaii;
  • Patient characteristics:
    • Medicare Severity-Diagnosis Related Group (MS-DRG) classification;
    • Age;
    • Presence of specified comorbidities; and
    • Length of stay; and
  • Facility characteristics:
    • A 17 percent payment adjustment for rural facilities due to their higher costs; and
    • Teaching hospitals receive payment to account for indirect medical education costs…

Why does this matter in the context of ICD-10?   The quality measures will be based on diagnosis and procedures coded in ICD-10 beginning October 1, 2015.

For more information on behavioral health, ICD-10, DSM-5 and DSM-IV see related blog posts.

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