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The Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) is there to look after inpatient psychiatric services in hospitals, psychiatric units of hospitals, and hospital beds for care that are in units that are separately certified. The following are discussed: the reasons for adjustments in this system and their impact on payments, followed by an example, along with whether or not the adjustments and the way they are applied make sense, and the reasons for that. The IPF PPS system works with a federal rate or amount that operates per diem (by the day) basis with several add-on payments that provide reimbursement for cost changes. These amounts represent average daily operational, capital, and ancillary costs undertaken to care for Medicare beneficiaries. The IPF PPS system has two types of adjustments: Patient Level Adjustments and Facility Level Adjustments.
The Patient Level Adjustments are for matters like the lengths of stay, the Medicare Severity Diagnosis-related-group (MS-DRG) with principal diagnoses of mental disorders, the patient’s age, co-morbid conditions, etc. On the other hand, the Facility Level Adjustments are for things like wage indices, cost-of-living adjustments, teaching status, rural locations, etc.
Inpatient Psychiatric Facility Prospective Payment System
These adjustments affect payments, using adjustment factors that change on a per diem basis according to the area in which the adjustments are being applied.
For example, regarding the lengths of stay adjustments, the adjustment factors for the first day could be either 1.31 or 1.19, depending on whether or not there is a psychiatric unit in a hospital that has an emergency department or departments that qualify as such. These adjustments and how they are applied make sound sense as they give appropriate patient classifications that can cater to the variation in usage of patient resources and the costs that result at such hospitals.
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