How the LTPAC Health IT Collaborative’s Recommendations and Next Steps Informed the FY 2027 Inpatient Psychiatric Facility PPS Rule 

On July 29, 2026, CMS issued the final rule for the FY 2027 Inpatient Psychiatric Facility (IPF) Prospective Payment System (CMS-1847-F). Earlier this year, the LTPAC Health IT Collaborative submitted a detailed comment letter on the proposed rule, drawing on our members’ clinical, technology, and research expertise across skilled nursing, long-term care hospitals, inpatient rehabilitation, home health, hospice, and behavioral health settings. With the final rule now published, we want to share what we recommended, what CMS decided, and where we’ll continue pushing.

What We Told CMS About the IPF Patient Assessment Instrument

The FY 2027 IPF PPS proposed rule contained what we believe is a landmark moment: CMS’s proposal to mandate FHIR-based submission, using HL7 FHIR R4, for the new IPF Patient Assessment Instrument (IPF-PAI). This is the first time CMS has required FHIR for patient assessment data in a statutory quality reporting program, and we made clear this deserved our full attention and support, alongside a substantial set of implementation recommendations.

Our recommendations included:

• Extending the implementation timeline from CMS’s proposed 6 months to at least 12 months, with staged milestones and sandbox access available 18 months before mandatory reporting
• Designing the CMS web application with SMART on FHIR launch capability so clinicians aren’t forced to toggle between their EHR and a separate CMS portal, and with bidirectional data exchange built in from the start
• Expanding the Data Element Library (DEL) into a true cross-setting interoperability backbone, not just an assessment-item glossary
• Requiring validated, industry-standard tools, such as the Columbia Suicide Severity Rating Scale, for suicide risk screening
• Building the FHIR infrastructure, iQIES architecture, and DEL integration with explicit scalability toward SNFs, LTCHs, IRFs, home health, and hospice, so this investment becomes a bridge across the full post-acute continuum rather than an IPF-only endpoint
• Investing in provider and vendor education through learning hubs and direct technical assistance, particularly for smaller and rural facilities
• Deferring the outlier payment cap CMS proposed, given concerns raised about how fixed routine costs at high-cost facilities were driving outlier payments

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How CMS Responded

The final rule confirms CMS is moving forward with FHIR-based submission alongside a CMS-developed web application (built with MITRE), both routing into iQIES, the same platform already used for MDS, IRF-PAI, and OASIS data. We view this choice of a shared receiving platform as a direct, encouraging step toward the cross-setting vision we advocated for, since it avoids yet another siloed reporting pipeline. CMS is also finalizing the removal of two IPF Quality Reporting Program measures (the alcohol and tobacco use treatment measures, SUB-2/2a and TOB-3/3a), reducing reporting burden.

On the outlier payment policy, CMS listened directly to concerns raised by commenters, including our own: it finalized the 20%-of-total-payments cap on facility-level outlier payments but deferred the effective date to FY 2028 rather than FY 2027, specifically to allow more time to evaluate cost drivers, and added an exception for facilities with fewer than 50 stays per year. That is a concrete, favorable outcome for smaller psychiatric facilities.

What remains to be confirmed as the full rule and implementation guides are published is whether CMS adopted our specific asks on implementation timing (12 months versus 6), SMART on FHIR integration, and a formal cross-setting scalability commitment. These are the details we’ll be tracking closely in the months ahead.

Where We Go From Here

The FY 2027 IPF PPS final rule shows that detailed, technically grounded advocacy continues to shape federal health IT policy, even when the full outcome isn’t a straight line from recommendation to regulation. We secured real, favorable movement on the outlier payment deferral and the shared iQIES infrastructure for FHIR-based reporting. And we’ve identified exactly where our continued engagement is needed most: implementation timelines, technical assistance for under-resourced providers, and cross-setting scalability commitments.

We’ll continue monitoring the Federal Register publication of the final rule and accompanying implementation guides, and we welcome dialogue with CMS as this policy moves into operational reality.

For questions about our comment letter or this final rule, please contact the LTPAC Health IT Collaborative Convener, Michelle Dougherty:

leaders@ltpachit.org

Read the full comment letter from the download link below

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