Proposed Rule Released for Inpatient Rehabilitation Facility FY 2021 Payments

Posted on April 22, 2020

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the inpatient rehabilitation facilities (IRF) prospective payment system (PPS) for fiscal year (FY) 2021, which begins Oct. 1. Highlights of the proposed rule include:

  • A net rate increase of 2.2%, comprised of a 2.9% marketbasket update, offset by a statutorily required 0.4 percentage point productivity reduction and budget-neutrality adjustment.
  • An increase to the IRF PPS federal standard payment rate from $16,489 to $16,847. Providers that failed to report quality data will have their rate set at $16,518.
  • A slight increase in the labor-related share of the rate to 72.9% from the current 72.7%, which will increase payments to facilities with an area wage index greater than 1.0.
  • A 5% cap on any wage index decreases compared to FY 2020 in a budget-neutral manner.
  • Updating the case-mix group relative weights and average length of stay based on FY 2019 claims and FY 2018 cost report data.
  • Permanently removing the post-admission physician evaluation documentation requirement for all IRF discharges. The CMS implemented a temporary waiver of this evaluation for the duration of the COVID-19 emergency period.
  • Allowing nonphysician practitioners to perform certain requirements that currently must be performed by a rehabilitation physician.
  • A 13% decrease in the cost outlier threshold from the current $9,300 to $8,102, increasing the number of cases eligible for an outlier payment.
  • No changes to the IRF quality reporting program.

The CMS will accept comments on the proposed rule through June 15. In the next few weeks, the MHA will provide a detailed summary of the proposed rule and facility-specific impact analyses. The MHA will release its draft comments prior to the due date. Members with questions should contact Vickie Kunz at the MHA.



Tags: CMS, PPS, IRF, Vickie Kunz, Coronavirus, COVID-19

Posted in: Member News

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