42 CFR § 412.422 - Basis of payment.

---
identifier: "/us/cfr/t42/s412.422"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "42 CFR § 412.422 - Basis of payment."
title_number: 42
title_name: "Public Health"
section_number: "412.422"
section_name: "Basis of payment."
chapter_name: "CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
subchapter_number: "B"
subchapter_name: "MEDICARE PROGRAM"
part_number: "412"
part_name: "PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 1302 and 1395hh."
regulatory_source: "50 FR 12741, Mar. 29, 1985, unless otherwise noted."
cfr_part: "412"
---


# 412.422 Basis of payment.

(a) *Method of Payment.* (1) Under the inpatient psychiatric facility prospective payment system, inpatient psychiatric facilities receive a predetermined Federal per diem base rate for inpatient hospital services furnished to Medicare Part A fee-for-service beneficiaries.

(2) The Federal per diem payment amount is based on the Federal per diem base rate plus applicable adjustments as specified in § 412.424.

(3) During the transition period, payment is based on a blend of the Federal per diem payment amount as specified in § 412.424, and the facility-specific payment rate as specified in § 412.426.

(b) *Payment in full.* (1) The payment made under this subpart represents payment in full (subject to applicable deductibles and coinsurance as specified in subpart G of part 409 of this chapter) for inpatient operating and capital-related costs associated with furnishing Medicare covered services in an inpatient psychiatric facility, but not the cost of an approved medical education program as specified in § 413.75 through § 413.85 of this chapter.

(2) In addition to the Federal per diem payment amounts, inpatient psychiatric facilities receive payment for bad debts of Medicare beneficiaries, as specified in § 413.89 of this chapter.

[69 FR 66977, Nov. 15, 2004; 70 FR 19728, Apr. 1, 2005, as amended at 76 FR 26465, May 6, 2011]