"Starting in 2026, Medicare will no longer require inpatient psychiatric facilities to report on whether they offered patients help with alcohol use or smoking cessation. This shift, while not prohibiting these crucial interventions, removes a specific external prompt that research indicates has influenced provider behavior and offers families one less data point for facility comparison."
The Centers for Medicare and Medicaid Services (CMS) has finalized the removal of two key quality reporting measures for inpatient psychiatric facilities, effective for care delivered in 2026. The Alcohol Use Brief Intervention Provided or Offered measure (SUB-2 and SUB-2a) and the Tobacco Use Treatment Provided or Offered at Discharge measure (TOB-3 and TOB-3a) will be retired from the Inpatient Psychiatric Facility Quality Reporting Program. This decision, outlined in CMS’s annual payment rule for these facilities, signifies a significant change in how the federal agency monitors the quality of care for a patient population with a disproportionately high burden of substance use. The removal begins with the calendar year 2026 reporting period, impacting payment determinations for Fiscal Year 2028. While this change does not legally prevent facilities from offering these vital services, it removes a mandated reporting requirement that has, in the past, served as a catalyst for improved patient care and documentation in these areas.
The population served by inpatient psychiatric units faces unique challenges, often grappling with co-occurring mental health and substance use disorders. Adults hospitalized for psychiatric care exhibit higher rates of smoking and alcohol consumption compared to the general population. For many, a psychiatric admission represents the most sustained and comprehensive engagement they have with the healthcare system within a given year, making it a critical juncture for addressing all aspects of their health, including substance use. The measures being removed are not broad screening tools but rather specific indicators of action taken after a substance use issue has been identified. SUB-2 focused on whether a brief intervention—a structured conversation—was offered to patients identified as unhealthy alcohol users. Similarly, TOB-3 tracked whether tobacco users were offered treatment, such as medication or counseling, at the point of discharge. These measures represent a specific step in the care pathway: the provision of services or referrals beyond initial identification.
The origins of these measures trace back to The Joint Commission, a prominent healthcare accreditation organization. Their adoption into the Inpatient Psychiatric Facility Quality Reporting Program in the mid-2010s was driven by research highlighting the significant impact of such reporting requirements on clinical practice. Studies conducted during that period demonstrated that the implementation of these measures led to substantial improvements. For instance, research at a large academic medical center indicated that the reporting rule spurred considerable increases in tobacco screening, documentation of interventions, and the provision of cessation treatment for psychiatric inpatients. Another analysis at a state psychiatric hospital found that compliance with tobacco treatment protocols rose notably after the establishment of a dedicated tobacco treatment service specifically to meet the CMS reporting requirement. This suggests that the mandated reporting served as a powerful external motivator for facilities to enhance their capacity and protocols for addressing substance use.
It is crucial to understand the nature of the Inpatient Psychiatric Facility Quality Reporting Program to accurately assess the implications of these measure removals. The program operates on a pay-for-reporting basis, not a pay-for-performance model. Facilities are obligated to submit the required data; failure to do so results in a two-percentage-point reduction in their annual payment update. However, facilities are not financially incentivized with higher payments for achieving superior scores on these measures. Therefore, the removal of SUB-2 and TOB-3 does not constitute a prohibition on offering alcohol brief interventions or tobacco cessation treatments. Furthermore, these removals do not invalidate existing clinical guidelines or best practices. Many facilities are expected to continue providing these services due to their integration into standard care protocols and potential requirements from other accreditation bodies. The primary impact of the removal is the loss of a specific, federally tracked data point that families could use to compare facilities and that served as an external impetus for providers to maintain and potentially enhance their substance use intervention services.
The consequences of these measure removals, though narrow in scope, can be consequential for patients and their families navigating the complexities of psychiatric care. When an individual is admitted for a psychiatric crisis, particularly if their condition is intertwined with heavy alcohol use or smoking, the discharge planning phase becomes a critical juncture. The opportunity to address these co-occurring issues at discharge—through a prescription for nicotine replacement therapy or a referral to outpatient alcohol treatment—can be vastly different from a general recommendation to follow up with a primary care provider, especially when such appointments may be months away. Families and patients have the agency to advocate for their needs. Proactive questions at discharge can include inquiries about whether the discharge plan specifically addresses smoking or drinking, if any medications are being prescribed for these issues, and the details of any outpatient follow-up appointments. These are reasonable questions that patients and their families can and should ask, irrespective of federal reporting requirements. It is imperative to note that any changes to medication or treatment plans should only be made in consultation with qualified healthcare professionals.
Beyond the removal of substance use measures, the finalized CMS rule introduces several other significant changes for inpatient psychiatric facilities. The rule implements a standardized Inpatient Psychiatric Facility Patient Assessment Instrument, a mandate stemming from the Consolidated Appropriations Act of 2023. This new instrument aims to standardize the collection of patient assessment data across facilities. Facilities have the option to submit this data through a free CMS web application or via application programming interfaces built on the HL7 FHIR specification. CMS highlighted this as its first statutory quality reporting program to utilize the FHIR standard for patient assessment data, signaling a move towards greater interoperability and modern data exchange. The American Hospital Association noted that CMS incorporated modifications to the instrument, including a reduced compliance threshold and an extended timeframe for mandatory submission, acknowledging the practical challenges facilities may face in implementing new data collection systems.
Additionally, the rule addresses outlier payments, which are designed to reimburse facilities for the costs associated with treating exceptionally complex or high-cost patients. A cap has been finalized, limiting outlier payments at the facility level to no more than 20% of a facility’s total annual Medicare payments. This cap will apply to facilities with at least 50 annual stays. The effective date for this provision is deferred to FY 2028, beginning October 1, 2027, with facilities having fewer than 50 annual stays being exempt. CMS explained that its analysis indicated that some facilities receive a disproportionate share of outlier payments not necessarily due to unusually costly individual patients, but rather because of high fixed costs such as labor and overhead. This change aims to ensure that outlier payments are primarily addressing patient-specific high costs, rather than facility-level operational expenses. The proposed rule had previously outlined the concentration of outlier payments that informed this decision, highlighting concerns about the equitable distribution and utilization of these funds within the broader context of inpatient psychiatric capacity, which is already limited in many regions.
The FY 2027 provisions, including the payment rate update, are set to take effect on October 1, 2026. The removal of the substance use measures will impact the calendar year 2026 reporting period, with implications for FY 2028 payment determinations. The outlier payment cap is also slated to begin in FY 2028. At present, CMS has not indicated any plans to propose a replacement substance use measure for the Inpatient Psychiatric Facility Quality Reporting Program. The long-term impact of removing these specific measures remains a subject of observation. Whether practice patterns will shift in the absence of direct reporting is yet to be determined, as there is no post-removal data available to analyze. Similarly, the effect of the outlier payment cap on access to care at facilities treating the most complex patients will require ongoing monitoring. MedicalDaily will continue to track CMS quality reporting guidance and proposed rules to provide updates on these developments.
In summary, two specific measures concerning the provision of alcohol brief interventions and tobacco treatment at discharge are being removed from Medicare’s inpatient psychiatric quality reporting program, commencing with data reported from 2026 onward. Patients hospitalized for psychiatric care who also experience substance use challenges are the primary demographic affected by this change. For these individuals and their families, the most proactive and effective approach is to directly engage with the treating team to understand and discuss the comprehensive discharge plan, particularly as it pertains to smoking and drinking. The central uncertainty lies in whether the cessation of federal measurement will precipitate a change in the delivery of care, and how the new outlier payment cap might influence the operational landscape for high-cost treatment facilities.
