Starting with care delivered in 2026, inpatient psychiatric units will no longer have to tell Medicare whether they offered patients help with drinking or smoking.
The Centers for Medicare and Medicaid Services finalized the removal on July 29 in its annual payment rule for inpatient psychiatric facilities. Two measure sets are going: the Alcohol Use Brief Intervention Provided or Offered measure and its subset, known as SUB-2 and SUB-2a, and the Tobacco Use Treatment Provided or Offered at Discharge measure and its subset, TOB-3 and TOB-3a. According to the CMS fact sheet, the removal begins with the calendar year 2026 reporting period and the FY 2028 payment determination.
The population affected is one that carries an unusually heavy substance use burden. Adults hospitalized for psychiatric care smoke and drink at far higher rates than the general population, and a psychiatric admission is often the longest sustained contact such a patient has with the health system in a given year.
What These Two Measures Actually Tracked
Precision matters here, because the two measures are narrower than a general screening requirement.
SUB-2 tracked whether a patient identified as an unhealthy alcohol user was offered a brief intervention, meaning a structured conversation about drinking, during the stay. TOB-3 tracked whether a patient who used tobacco was offered treatment, such as medication or counseling, at the point of discharge.
Neither is a screening measure. Both sit one step past screening, at the point where a facility either acts on what it found or does not. That is the specific step that will no longer be counted.
Both measures originated with The Joint Commission and were adopted into the Inpatient Psychiatric Facility Quality Reporting Program in the middle of the last decade. Research from that period documented what adoption changed in practice. A study at one large academic medical center found the reporting rule produced substantial increases in tobacco screening, documentation, and cessation treatment for psychiatric inpatients, and a separate analysis at a state psychiatric hospital tracked compliance rising after a dedicated tobacco treatment service was launched to meet the CMS requirement.
What Quality Reporting Compels and What It Does Not
It is important not to overstate what is being lost. The Inpatient Psychiatric Facility Quality Reporting Program is a pay-for-reporting program, not a pay-for-performance program. Facilities are required to submit the data, and those that fail to do so receive a two percentage point reduction to their annual payment update. They are not paid more for scoring well.
So the removal does not prohibit anyone from offering alcohol brief intervention or tobacco treatment, and it does not repeal any clinical guideline. Many facilities will continue both because they are standard practice and because other accreditation requirements may still apply.
Once a measure leaves the program, families comparing psychiatric facilities lose that particular comparison, and facilities lose an external prompt that research suggests changed behavior when it was introduced.
Why This Matters for Patients and Families
For a household, this surfaces in a narrow but consequential moment. A family member is admitted for a psychiatric crisis. They smoke a pack a day, or they drink heavily, and both are tangled up with the reason they were admitted.
Discharge is the point where that either gets addressed or gets deferred. A nicotine replacement prescription written at discharge, or a referral to outpatient alcohol treatment, is meaningfully different from a suggestion to follow up with a primary care provider who may be months out.
Families and patients can ask for these things directly. Reasonable questions before discharge include whether the discharge plan addresses smoking or drinking, whether any medication is being prescribed for it, and where the outpatient follow-up appointment is. None of that requires a federal measure to exist. It does require someone to ask.
Nobody should change or stop a psychiatric medication, or alter a treatment plan, based on a news article. Discharge planning questions belong with the treating team.
What Else the Rule Changes
The same rule raises Medicare payments to inpatient psychiatric facilities by 2.3% for FY 2027, based on a 3.2% market basket increase less a 0.9 percentage point productivity adjustment, an estimated $60 million more than FY 2026.
CMS is also adding something. The rule implements a standardized Inpatient Psychiatric Facility Patient Assessment Instrument, mandated by section 4125(b)(1) of the Consolidated Appropriations Act of 2023. Facilities may submit through a free CMS web application or through application programming interfaces built on the HL7 FHIR specification, which CMS said makes this its first statutory quality reporting program to use that standard for patient assessment data. The American Hospital Association noted CMS adopted the instrument with modifications, including a lower compliance threshold and a longer runway before mandatory submission.
Separately, CMS finalized a cap limiting outlier payments at the facility level to no more than 20% of a facility's total annual payments, for facilities with at least 50 stays per year. The agency deferred the effective date to FY 2028, which begins October 1, 2027, and exempted facilities with fewer than 50 annual stays. CMS said its analysis found certain facilities receive outlier payments on many claims because of high fixed costs such as labor and overhead rather than unusually costly individual patients. Outlier payments exist to protect access for patients who need expensive care, and the proposed rule laid out the concentration finding behind the change.
Inpatient psychiatric capacity is already limited in much of the country, and payment changes at facilities that treat the most complex patients are worth watching for that reason.
What Happens Next
The FY 2027 provisions take effect October 1, 2026. Measure removals apply to the calendar year 2026 reporting period and the FY 2028 payment determination. The outlier cap begins in FY 2028. CMS has not indicated whether it will propose a replacement substance use measure.
What remains unknown is whether removing the measures will change practice, since no post-removal data yet exists, and whether the outlier cap will affect access at high-cost facilities. MedicalDaily will monitor CMS quality reporting guidance and next spring's proposed rule.
The bottom line: two measures covering alcohol brief intervention and tobacco treatment at discharge are leaving Medicare's psychiatric quality program starting with 2026 data. Patients hospitalized for psychiatric care who also smoke or drink heavily are the group most affected. The reasonable step is for patients and families to ask the treating team directly what the discharge plan covers. The central uncertainty is whether care changes once the measurement stops.
Frequently Asked Questions
Which measures is CMS removing? The Alcohol Use Brief Intervention Provided or Offered measure and subset (SUB-2 and SUB-2a) and the Tobacco Use Treatment Provided or Offered at Discharge measure and subset (TOB-3 and TOB-3a).
When does the removal take effect? Beginning with the calendar year 2026 reporting period and the FY 2028 payment determination.
Are these screening measures? No. Both measure whether a facility acted after identifying alcohol or tobacco use, through brief intervention or treatment at discharge, rather than whether it screened.
Does this mean psychiatric hospitals will stop offering this help? The rule does not prohibit it, and many facilities will continue as standard practice. What ends is the requirement to report the data to Medicare and have it published.
What should a family ask before a psychiatric discharge? Ask whether the plan addresses smoking or drinking, whether medication is being prescribed for either, and when and where the outpatient follow-up appointment is scheduled.
Should anyone change medication based on this rule? No. Do not start, stop, or change any psychiatric or cessation medication without speaking to a qualified clinician.
What is the outlier payment cap? Beginning FY 2028, outlier payments to a facility with at least 50 annual stays will be capped at 20% of its total Medicare payments for the year. Facilities with fewer than 50 stays are exempt.
