CMS Proposes Two-Percent Net Payment Update for IRFs in FY 2014

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On May 2, 2013, CMS released its proposed FY 2014 inpatient rehabilitation facility (IRF) PPS rule, which includes a 1.8 percent net market basket update and a 0.2 percent increase for high-cost outlier payments.  The market basket update itself is 2.5 percent, but is reduced by a 0.4 percent productivity adjustment and a 0.3 percent reduction as mandated by the Affordable Care Act.  After taking these payment reductions into account, CMS proposes to increase the standard base payment amount for FY 2014 to $14,865.

CMS also proposes to reduce the number of diagnosis codes from the “presumptive compliance” list that determines whether an inpatient facility qualifies as an IRF.  (A facility may qualify as an IRF if, among other criteria, 60 percent of its inpatients have diagnosis codes appearing on the list of codes that CMS presumes require inpatient rehabilitation without medical review of each specific stay.)  The codes that may be removed include arthritis-related codes and codes associated with some congenital anomalies.  CMS does not believe these codes necessarily correlate to a need for inpatient rehabilitation. 

The proposed rule is available here. Comments are due to CMS by July 1, 2013.

Reporter, Christopher Kenny, Washington, D.C., + 1 202 626 9253, ckenny@kslaw.com.