The Inpatient Psychiatric Facility (IPF) Prospective Payment System (PPS) is a specialized framework used by Medicare to pay for psychiatric care. This system relies on precise definitions to classify patient episodes, ensuring administrative compliance and accurate financial records. One technical classification that directly impacts billing and coverage is the “interrupted stay.”
Context Setting: What is an IPF Stay?
An Inpatient Psychiatric Facility (IPF) is a specialized hospital or a distinct psychiatric unit within an acute care hospital that provides intensive, round-the-clock treatment for mental health conditions. Payment is governed by the IPF Prospective Payment System (PPS), which provides a fixed, predetermined daily rate. This per diem rate is adjusted based on patient characteristics, such as age, diagnosis, and the number of days the patient has been in the facility. An IPF stay, for billing purposes, is defined as a continuous period of inpatient care beginning with admission and ending with discharge.
The IPF PPS was designed to standardize payments for psychiatric care. Since the payment structure is fixed per day, strict definitions are necessary for tracking the patient’s entire episode of care. This payment model also includes adjustments for factors like the presence of an emergency department, teaching status, and geographic location.
The Precise Definition of an Interrupted Stay
An interrupted stay occurs when a patient is formally discharged from an Inpatient Psychiatric Facility and is subsequently readmitted to an IPF within a short, specified timeframe. The core action that triggers this classification is the discharge and rapid readmission, whether the patient returns to the same facility or is admitted to a different psychiatric facility. The regulatory intent is to treat these two episodes of care as a single, continuous stay for payment purposes.
For the stay to be considered interrupted, the patient must be readmitted before midnight on the third consecutive day following the initial discharge. The reason for the temporary discharge can vary, such as a transfer to an acute care hospital for a non-psychiatric medical procedure or a brief therapeutic leave of absence. Regardless of the intervening event, the classification links the two separate admissions into one comprehensive stay. This single-stay classification is applied to ensure that the payment accurately reflects the total length of the patient’s overall treatment episode.
Critical Timeframes That Define Interruption
The regulatory timeframe governing an interrupted stay is defined as a maximum gap of three consecutive days between the discharge and the readmission. The count begins on the day of discharge, which is counted as day one of the interruption period. Days two and three are the calendar days that follow the discharge date.
To qualify as an interrupted stay, the patient must be readmitted to an IPF by midnight of the third day. If the patient is readmitted on the fourth day or later, the readmission initiates a new IPF stay for billing purposes. This 3-day window prevents facilities from discharging and immediately readmitting patients to maximize payments by restarting the payment calculation for a new episode of care.
Financial Consequences of an Interrupted Stay
When a stay is classified as interrupted, the entire episode is treated as one continuous stay for the purpose of the variable per diem adjustment. The IPF PPS utilizes a variable per diem adjustment, meaning the payment rate decreases as the length of the stay increases. By linking the two admissions, the facility does not receive the higher payment rate given for the initial days of a new admission.
The facility must submit a single claim that combines the two inpatient periods rather than two separate claims for two distinct admissions. This classification also affects the patient’s financial liability, as the patient does not restart their Medicare deductible or co-payment obligations for the combined stay. Treating the stay as continuous influences the application of outlier payments, which are extra payments provided for high-cost patients.