OPEN MINDS, The Behavioral Health & Social Service Industry Analyst Industry News The Centers for Medicare & Medicaid Services (CMS) announced November 3, 2004, a new Medicare prospective payment system (PPS) for inpatient psychiatric facilities (IPFs). The new system is required by Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA), and will replace the cost-based payment system under which psychiatric hospitals and psychiatric units are paid under Medicare. The new system replaces the current cost-based payment system beginning January 1, 2005. It will affect about 1,800 inpatient psychiatric facilities, including freestanding psychiatric hospitals and . . .