What reimbursement methodology does CMS employ for inpatient psychiatric facility services, establishing a specific payment rate per each day of admission?

The reimbursement methodology employed by CMS for inpatient psychiatric facility services is based on a per diem rate. This means that the facility receives a set payment amount for each day a patient spends in the hospital. This approach is designed to simplify billing and provide consistent payment for services rendered over the length of a patient’s stay. By using a per diem rate, it encourages efficient use of resources as facilities receive a fixed amount regardless of the specific services provided on any given day.

This method contrasts with other methodologies such as case-rate, which would involve a single payment for the entire treatment episode regardless of the time spent, or global budget, which would provide a total budget for all services over a set period. Capitation involves a fixed payment per patient, typically for outpatient services or a defined population, rather than specifically for each day of hospitalization. The per diem approach is particularly suited for inpatient settings where the length of stay can vary considerably from patient to patient.