The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service prospective payment system (PPS) for inpatient rehabilitation facilities (IRF) for federal fiscal year (FY) 2024. Key provisions of the proposal include:
- Rebasing the IRF market basket using data from cost reports beginning in FY 2021, instead of FY 2016 data.
- Increasing the IRF PPS payment rate by 3.3% from $17,878 to $18,471 for IRFs that comply with the CMS IRF Quality Reporting Program (QRP) requirements. IRFs that fail to comply are subject to a two percentage point reduction.
- Increasing the labor-related share from the current 72.9% to 74.1%.
- Using the FY 2024 pre-floor, pre-reclassification inpatient PPS hospital wage index, with a 5% cap on any decrease to a provider’s wage index from its prior year wage index.
- Decreasing the cost outlier threshold by nearly 23% from the current $12,526 to $9,690, to achieve the 3% target for outlier payments as compared to aggregate IRF payments, which will increase the number of cases that qualify for outlier payments.
- Updating the IRF QRP by:
- Modifying the COVID-19 Vaccination Coverage among Healthcare Personnel measure.
- Adopting one new measure: The Discharge Function Score measure.
- Removal of three existing measures:
- The Application of Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function measure (NQF #2631).
- The IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients measure (NQF #2633.
- The IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients measure (NQF #2634).
- Modifying the excluded unit regulation to allow a hospital to open a new IRF unit and begin being paid under the IRF PPS at any time during the cost reporting period if the hospital meets certain requirements rather than the current limit that only allows for payment under the IRF PPS at the beginning of a cost reporting period.
The MHA will provide IRFs with a facility-specific impact analysis and additional details on the proposed rule in the near future. The MHA also encourages members with IRF operations to review the proposed rule, provide comments to Vickie Kunz at the MHA by May 25 and submit comments to the CMS by June 2. The CMS is expected to release a final rule around Aug. 1, for an Oct. 1, 2023, effective date.
Members with questions should contact Vickie Kunz at the MHA.