2025-14781RuleSignificantWallet

Medicare Fine-Tunes Psych Hospital Payments for Fiscal Year 2026

Published Date: 8/5/2025

Rule

Summary

Starting October 1, 2025, Medicare is updating how it pays inpatient psychiatric hospitals and units, including changes to rates, wage adjustments, and special payments for teaching and rural facilities. These updates affect hospitals that care for patients with mental health needs and aim to make payments fairer and more accurate. Plus, quality reporting rules are getting a refresh to keep care top-notch through September 30, 2026.

Analyzed Economic Effects

5 provisions identified: 1 benefits, 0 costs, 4 mixed.

IPF Prospective Payment Rate Update

If you receive inpatient psychiatric care paid by Medicare, the rule updates the prospective payment rates that Medicare uses to pay Inpatient Psychiatric Facilities (IPFs) for discharges from October 1, 2025 through September 30, 2026. This change alters how much Medicare pays those hospitals during that fiscal year.

Wage Index Adjustments for IPFs

Medicare is updating the wage index used to adjust payments to Inpatient Psychiatric Facilities for the period October 1, 2025 through September 30, 2026. If you get care in an IPF, the geographic wage adjustments that affect facility payments will be changed for that fiscal year.

Outlier Payment Threshold Change

Medicare is revising the outlier threshold used for IPF payments for discharges between October 1, 2025 and September 30, 2026. If an IPF has unusually costly cases, the threshold that triggers outlier payments will be different during that fiscal year.

Teaching & Rural Payment Adjustment Revisions

Medicare revises the payment adjustment factors that apply to IPFs with a teaching status and to IPFs located in rural areas for discharges from October 1, 2025 through September 30, 2026. If you receive care at a teaching hospital or a rural psychiatric facility, those facilities' Medicare adjustments are changed for that fiscal year.

IPF Quality Reporting and Exception Policy

Medicare is updating the measures used in the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program and is updating and codifying the Extraordinary Circumstances Exception policy for the period through September 30, 2026. If you get care in an IPF, the quality measures that hospitals report and the rules for exceptions during extraordinary circumstances are changed for that reporting period.

Your PRIA Score

Score Hidden

Personalized for You

How does this regulation affect your finances?

Sign up for a PRIA Policy Scan to see your personalized alignment score for this federal register document and every other regulation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.

Free to start

Key Dates

Published Date
Rule Effective
8/5/2025
10/1/2025

Department and Agencies

Department
Independent Agency
Agency
Health and Human Services Department
Centers for Medicare & Medicaid Services
Source: View HTML

Related Federal Register Documents

Previous / Next Documents

Back to Federal Register

Take It Personal

Get Your Personalized Policy View

Start a Free Government Policy Watch to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.

Already have an account? Sign in