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From Health Law Daily, May 8, 2013

Proposed inpatient rehabilitation facility PPS rule issued, increasing FY 2014 payments by approximately $150 million

By Jenny M. Burke, JD, MS

CMS has issued the proposed inpatient rehabilitation facility (IRF) prospective payment system (PPS) rule for fiscal year 2014 includes a 2 percent increase for federal fiscal year (FY) 2014 (for discharges occurring on or after October 1, 2013 and on or before September 30, 2014) (Proposed rule, 78 FR 26880, May 8, 2013). The increase is based on a market basket update to payments of 1.8 percent and a 0.2 percent increase to the outlier threshold. Overall, CMS estimates that payments to IRFs will increase approximately $150 million.

60 percent rule. In addition to increasing payments, CMS proposes to revise the list of diagnosis codes that are used to determine presumptive compliance under the "60 percent rule." Currently, the 60 percent rule requires that 60 percent of an IRF’s cases for the prior 12-month compliance period to fall within 13 qualifying conditions. Under the proposed rule, new, more specific codes for the patient’s condition, severity of illness, and anatomical location of illness would be required so that CMS contractors can more accurately assess a facility’s compliance with the 60 percent rule.

Quality reporting program. CMS is also proposing changes to the IRF Quality Reporting Program, which include continued use of current quality measures as well as the addition of the following three new quality measures: (1) NQF #0680 Percent of Resident or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short-Stay); (2) NQF #0431 Influenza Vaccination Coverage Among Healthcare Personnel; and (3) All-Cause Unplanned Readmission Measure for an Unplanned Readmission Measure for 30 Days Post Discharge from Inpatient Rehabilitation Facilities. CMS is also proposing to revise the IRF Patient Assessment Instrument (IRF-PAI) to include data elements necessary to accommodate risk adjustment on pressure ulcers. The assessment instrument data collection period would also change from a calendar year to a fiscal year.

IRF facilities. Updates are proposed to the IRF facility-level rural, low-income percentage, and teaching status adjustments. Also included in CMS’ proposal is a new variable in the regression methodology to indicate whether the IRF is a freestanding hospital or a unit of an acute care hospital (or critical access hospital). The proposed rule would also require changes to 42 C.F.R. sec. 412.25(a)(1)(iii) to specify a minimum required number of beds that are not excluded from the inpatient prospective payment system (IPPS) for a hospital that has an IRF unit.

Comments on this proposed rule will be accepted until July 1. 2013. The IRF PPS Addenda, along with other supporting documents and tables referenced in this proposed rule, are available on the CMS website at

MainStory: TopStory ProposedRules IRFNews CoPNews CMSNews QualityNews

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