On November 15, 2004, CMS published the final Medicare hospital inpatient psychiatric facility prospective payment system rules, changing these payments from a cost-based system. The new payment system becomes effective for providers with their cost reporting periods beginning on and after January 1, 2005. The rule addresses:
* A transition process
* The standardized PPS rates, which are required by law to be budget neutral
* The per diem basis of the payment
* The update cycle
* Facility adjustments for wage index, rural location, teaching status, and emergency service capability
* Various patient level adjustments
* Outliers
* The prospects for changes in the first update