The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the Medicare fee-for-service prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) for fiscal year (FY) 2026.
Key provisions include:
- Increasing the IRF PPS payment rate by a net 2.45% after all adjustments, from $18,907 to $19,371. IRFs that fail to comply with the CMS IRF Quality Reporting Program (QRP) requirements are subject to a two-percentage point reduction.
- Using FY 2024 IRF claims and FY 2023 IRF cost report data to update case mix group weights and average lengths of stay.
- Maintaining the labor-related share at the current 74.4%.
- Decreasing the cost outlier threshold by 16.4% from the current $12,043 to $10,062 to achieve the 3% target for outlier payments as compared to aggregate IRF payments, decreasing the number of cases that qualify for outlier payments.
- Changes to the IRF QRP to:
- Remove the COVID-19 Vaccination Coverage Among Healthcare Personnel measure beginning with the FY 2026 payment year.
- Remove the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure by making data reporting optional beginning Oct. 1, 2025, and removing it from the IRG patient assessment instrument effective Oct. 1, 2026, the earliest feasible date.
- Remove four standardized patient assessment data elements related to social drivers of health, including one item on living situation, two items on food security and one item on utilities.
The MHA will provide IRFs with a facility-specific impact analysis and additional details on the final rule in the coming weeks. Members with questions should contact Vickie Kunz at the MHA.