New Medicare Policy and Payment Changes Proposed for Inpatient Rehabilitation Facilities

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CMS released the Fiscal Year 2020 proposed rule (the Proposed Rule) outlining new Medicare policy and payment changes for inpatient rehabilitation facilities (IRFs) last Wednesday.  The Proposed Rule proposes updating IRF payment rates, revising case-mix groups, rebasing the IRF market basket, adding two interoperability measures, and implementing the IRF Quality Reporting Program (QRP).  The Proposed Rule is expected to be published in the Federal Register on April 24, 2019, and the deadline to submit comments is June 17, 2019.

New payment rates are proposed for facilities under the IRF Prospective Payment System (PPS). Payments are expected to increase by 2.3 percent (or $195 million) compared to last year using recent data to inform a 2.5 percent increase factor.  Outlier payments will stay at 3.0 percent of total payments.  If more recent data becomes available, CMS will revise the IRF PPS to reflect that data.

Last year, CMS removed the Functional Independence Measure items from the patient assessment instrument.  In the process of finalizing replacement quality indicator data items last year, CMS proposed revising case-mix groups using two years of data.  The Proposed Rule implements that proposal by revising the case-mix groups using past data and updating the average length of stay values and relative weights associated with the revised case-mix groups.  The Proposed Rule also proposes removing the roll left and roll right from the motor score and applying a weighting methodology to the motor score.

The Proposed Rule also proposes changing the IRF market-basket from a 2012 base year to a 2016 base year.  The proposed market-basket is expected to be 3.0 percent and the multi-factor adjustment is expected to be 0.5 percent.  The proposed labor-related share is expected to increase 2.1 percent from last year (70.5 percent to 72.6 percent).

Two new interoperability measures will be added to the IRF QRP related to the transfer of health information – a Transfer of Health Information to the Provider Post-Acute Care Measure and a Transfer of Health Information to the Patient Post-Acute Care Measure.  The measures are aimed at ensuring that the patient’s medication list is complete and accurate at the time of discharge.  In addition, the Proposed Rule proposes adding standardized patient assessment data elements to the IRP-Patient Assessment Instrument.  The new elements are intended to improve communication between providers and enhance patient care.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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