NABH Issue Brief: CMS Proposes Slight Payment Increase for PHPs and CMHCs in 2020

The Centers for Medicare and Medicaid Services (CMS) has proposed a hospital-based partial hospitalization program (PHP) payment rate of $228.20 for 2020, up from the 2019 rate of $220.86, in the Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System (OPPS/ASC) proposed rule the agency released on July 29. CMS also proposed an increase for community mental health centers (CMHCs), which could see a payment rate of $124.59 in 2020 if the rule is made final. By comparison, CMHCs received a payment rate of $120.58 in 2019. The rates set in the proposed CY 2020 rule are not based on the most recent average cost data from the PHP program, a deviation from CMS’ long-standing policy. When CMS calculated the average PHP program cost for the CY 2020 proposed rule, the agency found it had decreased by nearly 15 percent for CMHCs and 11 percent for hospitals-based PHPs. After finding this decrease, CMS reviewed the data sets and found that a single provider in the CMHC set and a single provider in the hospital-based set had such dramatically lower-reported costs that it significantly skewed the average cost for both data sets. Because the lower average costs were the result of single providers and could significantly reduce access for beneficiaries, CMS decided to use the CY 2019 cost average as a floor for both type of PHP rates in the CY 2020 rule. If not for this change, the rate for both types of PHPs would have been significantly lower than what CMS proposed in the rule. It is important to note that CMS stressed that it does not intent to carry this policy forward: “To be clear, this policy would only apply for the CY 2020 rate setting,” the agency said in the rule. CMS will accept comments on the CY 2020 proposed rule until September 27. CY 2020 Rates Level 1 Health and Behavior Services                                                         $28.59 Level 2 Health and Behavior Services                                                         $81.06 Level 3 Health and Behavior Services                                                         $130.27 Partial Hospitalization (3 or more services) for CMHCs                               $124.59 Partial Hospitalization (3 or more services) for Hospital-based PHPs         $228.20