On March 29, 2024, CMS published its fiscal year (FY) 2025 prospective payment system (PPS) proposed rule for inpatient rehabilitation facilities (IRFs). Comments are due by 5 pm ET on May 28, 2024. In the IRF PPS proposed rule, CMS proposes to increase IRF PPS rates by 2.8 percent, which is based on a market basket increase of 3.2 percent minus a 0.4 percent productivity adjustment. CMS also proposes other updates described below.
Proposed Updates to Payment Policies and Wage Index
CMS proposes additional updates to payment policies and the IRF PPS wage index to account for the 2020 census that updates the core-based statistical areas. Along with the proposed market basket increase of 3.2 percent, CMS proposes to adjust the outlier threshold to maintain outlier payments at 3.0 percent of total payments. Accordingly, CMS estimates an increase in FY 2025 of IRF payments of $255 million, which, according to CMS, reflects a total increase of $280 million adjusted by $25 million to account for the outlier threshold adjustment. CMS also proposes to phase out the rural adjustment for IRFs as follows: in FY 2025 IRFs would receive two-thirds of the rural adjustment, in FY 2026 IRFs would receive one-third, and IRFs would not receive any rural adjustment in FY 2027.
Proposed Updates to the IRF Quality Reporting Program (QRP)
CMS proposes several updates to the IRF QRP that would begin with the FY 2028 IRF QRP with patients or residents admitted on or after October 1, 2026. Under the IRF-Patient Assessment Instrument (PAI), CMS would adopt one new item in the “Living Situation” Social Determinants of Health (SDOH) category, two new items in the “Food” SDOH category, and one new item in the “Utilities” SDOH category. CMS would also modify a Transportation item under the SDOH category and remove the “Admission Class” assessment item.
Requests for Information
CMS also requests information on the following:
- Potential measurement concepts that could be new IRF QRP measures; and
- Feedback on developing an IRF QRP Star Rating System.
A copy of the proposed rule is available here.
