Alternative Comorbidity Adjustors for the Medicare Inpatient Psychiatric Facility PPS

The inpatient psychiatric facility prospective payment system (IPF-PPS), provides per diem payments for psychiatric hospitals and units, including 17 comorbid condition payment adjustors that cover 11 percent of patients. This study identifies an alternative set of 16 adjustors identifying three times as many high-cost patients and evaluates the improved predictive power in log per diem cost regression models. A model using the IPF-PPS adjustors achieved 8.8 percent of the feasible improvement from a no-adjustor baseline, while the alternative adjustors achieved 22.1 percent of the feasible improvement. The current adjustors may therefore be too restrictive, resulting in systematic over- or underpayment for many patients.