CMS proposes to increase inpatient rehab facility payments by 3%
Overall IRF payments for 2024 are expected to increase by 3.7%, or $335 million, relative to payments in 2023.
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The Centers for Medicare and Medicaid Services has issued an annual update to the Medicare payment policies and rates for inpatient rehabilitation facilities.
For 2024, CMS is proposing to update the Inpatient Rehabilitation Facility Prospective Payment System payment rates by 3% based on the proposed market basket update of 3.2%, less a proposed 0.2 percentage point productivity adjustment.
If more recent data become available – for example, a more recent estimate of the market basket update or productivity adjustment – CMS said it would use this data, if appropriate, in an updated the final rule.
In addition, the proposed rule contains an adjustment to the outlier threshold to maintain outlier payments at 3% of total payments. This adjustment would result in a 0.7 percentage point increase in outlier payments.
CMS estimates that overall IRF payments for 2024 will increase by 3.7%, or $335 million, relative to payments in 2023.
WHY THIS MATTERS
The proposed Inpatient Rehabilitation Facility Prospective Payment System and the IRF Quality Reporting Program rule includes annual updates to the prospective payment rates, the outlier threshold, the case-mix-group relative weights and average length-of-stay values, the wage index, and associated impact analysis.
The rule includes a proposal to modify regulations to allow hospitals to open and begin billing Medicare for an excluded inpatient rehab facility unit anytime within the cost reporting year.
Hospitals will be allowed to open a new inpatient rehabilitation facility unit and begin being paid under the IRF PPS at any time during the cost reporting period, provided the hospital notifies the CMS Regional Office and the Medicare Administrative Contractor in writing at least 30 days before the date of the change and maintains the information needed to accurately determine the costs.
Such a change would also remain in effect for the rest of the cost reporting period. CMS believes this will alleviate unnecessary burden and administrative complexity placed upon hospitals and increase access to care.
CMS is also proposing two new and one modified measure proposals for the Quality Reporting Program. IRFs that do not meet quality reporting requirements are subject to a two-percentage point reduction in their Annual Increase Factor.
In addition, CMS is proposing three measure removals and is proposing one public reporting policy.
THE LARGER TREND
Approximately every four years, CMS rebases and revises the IRF market basket used to update payments to reflect more recent data on IRF cost structures.
CMS last re-based and revised the IRF market basket in the 2020 rule, where CMS adopted a 2016-based IRF market basket.
The proposal for FY 2024 would be to adopt a 2021-based IRF market basket and includes proposed changes to the market basket cost weights, price proxies, market basket update and labor-related share.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
Jeremy Petch will offer more detail at the HIMSS23 session "Opening the Black Box: Promise and Limitations of Explainable AI." It's scheduled for Wednesday, April 19 at 10 a.m. – 11 a.m. CT at the South Building, Level 5, room S503.
