Background

10.1 – Background (Rev. 253, Issued: 12- 14-18, Effective: 01-16-19, Implementation: 01- 16-19) This section and its subsections provide instructions about the Inpatient Psychiatric Facility Prospective Payment System (IPF PPS). The IPF PPS replaced the reasonable cost/Tax Equity and Fiscal Responsibility Act (TEFRA) based payments subject to TEFRA limits under §1886 (b) of the Social Security Act (the Act) for discharges beginning on and after the first day of the IPF’s first cost reporting period beginning on or after January 1, 2005. The IPF PPS, codified at 42 CFR 412, Subpart N, provides payment for inpatient psychiatric treatment when provided to a patient in psychiatric hospitals, and distinct part psychiatric units of acute care hospitals and critical access hospitals (CAHs). Psychiatric hospitals and psychiatric units that used to be paid reasonable-cost under TEFRA, §1886(b) of the Act, are now paid under the IPF PPS. As described in 42 CFR 412.23(a), a psychiatric hospital must meet the following requirements to be excluded from the Inpatient Prospective Payment System (IPPS) and paid under the IPF PPS: (1) Be primarily engaged in providing, by or under the supervision of a psychiatrist, psychiatric services for the diagnosis and treatment of mentally ill persons; and (2) Meet the conditions of participation for hospitals and special conditions of participation for psychiatric hospitals set forth in 42 CFR part 482. As described in 42 CFR 412.27, a psychiatric unit must meet the following requirements to be excluded from the IPPS payment system, and paid under the IPF PPS: (1) Admit only patients whose admission to the unit is required for active treatment, of an intensity that can be provided appropriately only in an inpatient hospital setting, of a psychiatric principal diagnosis that is listed in the International Classification of Diseases, Tenth Revision, Clinical Modification. (2) Furnish, through the use of qualified personnel, psychological services, social work services, psychiatric nursing, and therapeutic activities. (3) Maintain medical records that permit determination of the degree and intensity of the treatment provided to individuals who are furnished services in the unit, and that meet the requirements given in section 30 of this chapter. (4) Meet special staff requirements in that the unit must have adequate numbers of qualified professional and supportive staff to evaluate inpatients, formulate written, individualized, comprehensive treatment plans, provide active treatment measures and engage in discharge planning, as given in section 40 of this chapter. The term "inpatient psychiatric facility services" means inpatient hospital services furnished to a patient of an inpatient psychiatric facility. IPFs are certified under Medicare as inpatient psychiatric hospitals and distinct psychiatric units of acute care hospitals and CAHs. .