CMS has published its final rule to update fiscal year (FY) 2019 rates and policies for Medicare inpatient psychiatric facility (IPF) services. CMS estimates that the final rule will increase payments by a total of $50 million (1.1%) compared to FY 2018 levels. The final rule provides for a 1.35% payment update for FY 2019, based on a 2.9% market basket update that is reduced by both a 0.8 percentage point productivity adjustment and a statutorily-mandated 0.75 percentage point reduction. CMS estimates that payments will be further reduced by 0.24 percentage points as a result of an outlier fixed-dollar loss threshold adjustment. Under the final rule, the IPF prospective payment system federal per diem base rate is increased from $771.35 to $782.78; the per diem base rate is $767.33 for providers who failed to report quality data. The final rule also updates the IPF labor-related share, the IPF wage index, and quality measures and reporting requirements under the IPF Quality Reporting Program (IFPQR). Note that while CMS proposed to remove eight IPFQR measures, as a result of public comments CMS is retaining three of the measures (pertaining to Physical Restraint Use, Seclusion Use, and Tobacco Use Treatment at Discharge).