CMS Proposes 2026 Updates for Psychiatric Facility Payments and Quality Rules

CMS published its proposed rule for the 2026 fiscal year IPF regulations on April 11, 2025. The proposed rule of 2026 introduces updated Medicare pay rates and facility-based adjustments with new quality reporting standards and a feedback request from the public.

CMS proposes to increase IPF payment rates by 2.4 percent starting from FY 2026. Payment rates for IPFs will increase by 2.4 percent according to CMS’s proposed rule for fiscal year 2026, which was calculated through a 3.2 percent market basket increase minus a 0.8 percent productivity adjustment. Medical establishments are projected to receive an estimated $70 million more in payments based on the projected rate increase during FY 2025.

CMS implements updated payment adjustment models alongside its planned rate increase. Through analysis of 2020 to 2022 data, CMS proposes increased payment adjustments for rural facilities and institutions serving as teaching hospitals. CMS proposes augmenting the maximum teaching limit for total full-time resident equivalents.

CMS proposes modifications to performance metrics for the IPF Quality Reporting Program. For improved performance assessments, CMS proposes extending the emergency department visit measure reporting window from yearly to two fiscal years. Starting with the 2024 reporting year, CMS will remove four quality metrics, including health equity measures and the COVID-19 vaccination coverage requirement, from its collection protocols.

The regulatory procedures for federal healthcare providers currently receive CMS evaluations based on Executive Order 14192, which CMS issued on January 31, 2025. Comments about the proposed rule must be submitted to the agency by June 10, 2025.

Additional details about the proposed rule and accompanying fact sheet are available through the CMS website.