CMS Finalizes 2.3% IPF Payment Increase for FY 2027, Delays Outlier Cap
CMS issued a final rule July 29 increasing inpatient psychiatric facility payments by 2.3% ($60 million) for fiscal year 2027, reflecting a 3.2% market basket update minus a 0.9-point productivity adjustment. The rule finalizes an outlier payment cap but defers implementation until FY 2028 and excludes facilities with fewer than 50 stays annually. CMS also removes two quality reporting measures on alcohol and tobacco screening effective CY 2026/FY 2028 and modifies implementation of the standardized IPF Patient Assessment Instrument with a lower compliance threshold and extended timeline. Changes take effect October 1, 2026.
The modest rate increase and delayed outlier cap provide temporary relief for Medicaid managed care plans with IPF contracts, but the payment standardization and assessment instrument changes will require operational adjustments by state agencies and plans managing psychiatric services.
Behavioral Health · Managed Care
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