Section 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