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

MHA Updates Delivered to You

Subscribe to the MHA Monday Report weekly newsletter or our podcast, the MiCare Champion Cast, to keep informed about the latest healthcare news and events in Michigan.

MHA Monday Report
Contact us to subscribe

MiCare Champion Cast
iTunes | SoundCloud

Media Inquiries

Contact the MHA at
(517) 703-8601

Read the MHA policy on publication via MHA media.

MHA 100 Year Anniversary

Watch the video »