The Centers for Medicare & Medicaid Services (CMS) has released its proposed rule to update the Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS) for FY 2020. CMS projects that IRF PPS payments would rise by $195 million under the proposed rule. Specifically, CMS proposes a 2.5% increase factor, based on an IRF market basket update of 3.0% reduced by a 0.5 percentage point multifactor productivity adjustment. CMS proposes to rebase and revise the IRF market basket to use a 2016 base year rather than 2012. CMS also proposes to increase the outlier threshold amount from $9,402 for FY 2019 to $9,935 for FY 2020, which would have the effect of decreasing aggregate payments by approximately 0.2%. The proposed FY 2019 standard payment conversion factor is $16,573, compared to $16,021 in FY 2019. An IRF that does not submit required quality data to CMS would be subject to a 2.0 percentage point decrease in its annual update.

To align with other post-acute care settings and support the eventual transition to a unified post-acute care system, CMS proposes to use the concurrent (rather than prior year) FY inpatient prospective payment system (IPPS) wage index beginning with FY 2020. CMS requests comments on the appropriateness of the wage index used to adjust IRF payments. Other proposed updates include: revisions to case-mix groups based on FY 2017 and FY 2018 data, and updated relative weights and average length of stay values for the revised case-mix groups; revisions to interoperability and IRF Quality Reporting Program (QRP) measures; expansion of QRP data collection to all patients, regardless of payer; and clarification that the determination as to whether a physician qualifies as a rehabilitation physician is made by the IRF.

CMS will accept comments on the proposed rule until June 17.

Read the Proposed Rule Here: Proposed Rule