New Payment, Policies for Inpatient Rehab

The Centers for Medicare & Medicaid Services (CMS) issued a final rule this month that increases reimbursement rates paid under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) by 2.2 percent and establishes a new quality reporting system authorized by the Affordable Care Act. CMS projects total payments under the IRF PPS will increase by $150 million in 2012. The final rule will affect payments to more than 200 freestanding rehabilitation hospitals and more than 1,000 IRF units in acute care hospitals and critical access hospitals (CAHs), beginning with discharges on or after Oct. 1, 2011.

Initially, IRFs will submit data on two quality measures: a urinary catheter-associated urinary tract infection measure and a measure for new or worsening pressure ulcers, with a third measure, “30-day Comprehensive All Cause Risk Standardized Readmission,” under development. IRFs not submitting performance data will see payments reduced by 2 percentage points beginning in 2014. CMS says it anticipates adding measures for reporting in the future through rule-making and establishing a process for making the data available to the public. IRFs would have an opportunity to review the data for accuracy before it becomes public.
Under the IRF PPS, the Medicare payment to an IRF increases after the IRF’s costs for treating a beneficiary exceed an outlier threshold amount. The threshold set for 2012 is projected to maintain outlier payments at 3 percent of total payments under the IRF PPS.
The final rule also:

• Updates the case-mix group relative weights using 2010 IRF claims and 2009 IRF cost report data
• Uses the final 2011 pre-reclassified and pre-floor hospital wage data to determine the 2012 rates
• Freezes the facility-level adjustment factors for 2012 at 2011 levels for one additional year while the agency explores ways to improve upon the accuracy and consistency of the current methodology used to calculate the facility-level adjustment factors
• Allows IRFs to receive temporary adjustments to their full-time equivalent (FTE) intern and resident caps if they take on interns and residents who are unable to complete their training because the IRF that had originally been their assigned training site either closed or ended its resident training program
• Allows IRF and inpatient psychiatric facility units to expand in the middle of a cost reporting period, rather than restricting such expansions to the start of a cost reporting period

The IRF PPS 2012 final rule appeared in the Aug. 5 Federal Register.

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