On July 31, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a final rule, published in the Federal Register on August 6, 2014, updating fiscal year (FY) 2015 Medicare payment policies and rates for the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the IRF Quality Reporting Program (IRF QRP). CMS estimates that aggregate payments to IRFs will increase in FY 2015 by $180 million (2.4 percent) relative to payments in FY 2014.

The Final Rule details the various methodologies for the Final PPS payment adjustments and high-cost outlier adjustments. CMS is freezing the facility-level adjustment factors for FY 2015 and subsequent years at the FY 2014 levels, while they continue to monitor the most current IRF data available and evaluate the effects of the FY 2014 changes. CMS also updates the national urban and rural cost-to-charge ratios and the national ceiling on cost-to-charge ratios for FY 2015.

Other key elements of the Final Rule are:

• Finalizes the conversion of ICD-9-CM to ICD-10-CM codes for the IRF PPS, but sets the effective date to be the date when ICD-10-CM becomes required for Medicare claims and IRF-PAI submissions. Until that time, ICD-9-CM codes for the IRF PPS will be used.
• Finalizes some additional revisions to the comorbidity, IGC, and Etiologic Diagnosis portions of the presumptive compliance methodology to be consistent with the changes implemented in the FY 2014 final rule and delays the effective date for the revisions to the presumptive compliance codes finalized in the FY 2014 IRF PPS final rule and the changes finalized in this Final Rule until compliance review periods beginning on or after October 1, 2015.
• Beginning October 1, 2015, adds an item in the IRF patient instrument (PAI) to record the amount and mode of therapy delivered (i.e. Individual, Group, Concurrent, and Co-Treatment) by each therapy discipline for the first 2 weeks of the IRF stay patients receive in each therapy discipline (i.e. physical therapy, occupational therapy, and speech-language pathology), similar to what is currently reported on the Minimum Data Set in the skilled nursing facility setting. "Concurrent Therapy" will be required to be reported as a separate category from "Group Therapy."
• Effective for IRF discharges occurring on or after October 1, 2015, adding a yes/no check off in IRF-PAI that would indicate whether prior treatment and severity requirements have been met for patients with arthritis. Medicare Administrative Contractors (MACs) will determine whether inclusion of the arthritis codes indicated with a "Yes" on the IRF-PAI would be enough for the facility to comply with the 60 percent rule requirement. If so, then the MAC would be required to take a random sample of these cases to verify that the requirements were indeed being met.
• Beginning with admissions and discharges occurring on or after January 1, 2015, will add IRF quality reporting measures that would include outcome measures related to MRSA and C-Diff via the Center for Disease Control and Prevention’s (CDC) National Healthcare Safety Network (NHSN).
• Finalizes a formal reconsideration policy for the IRF QRP, which requires that IRF providers follow specific procedures when submitting a request for CMS’ reconsideration of an initial IRF QRP provider compliance determination.
• Finalizes a proposed Data Accuracy Validation policy, which will require randomly selected IRF providers to meet a 75% data accuracy threshold for certain required IRF-PAI quality indicator data items and a data completion threshold of 95% for mandatory IRF-PAI quality indicator items, as well as a threshold of 100% for data submitted through the CDC’s NHSN (i.e., data covering each month of the applicable reporting period).