Payment and Policy Changes

Policy Changes for Medicare Inpatient Rehabilitation Facilities

Proposed Fiscal Year 2016 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities (CMS-1624-P)

On April 23, 2015, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining proposed fiscal year (FY) 2016 Medicare payment policies and rates for the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the IRF Quality Reporting Program (IRF QRP).  The FY 2016 proposals are summarized below.

Proposed Changes to IRF payment policies and rates:

Changes to the payment rates under the IRF PPS.  CMS is proposing to update the IRF PPS payments for FY 2016 to reflect an estimated 1.9 percent increase factor (reflecting a new IRF-specific market basket estimate of 2.7 percent, reduced by a 0.6 percentage point multi-factor productivity adjustment and a 0.2 percentage point reduction required by law). CMS is proposing that if more recent data are subsequently available (for example, a more recent estimate of the market basket or multifactor productivity adjustment) we would use such data, to determine the FY 2016 update in the final rule. An additional 0.2 percent decrease to aggregate payments due to updating the outlier threshold results in an overall update of 1.7 percent (or $130 million), relative to payments in FY 2015.

No changes to the facility-level adjustments. As stated in the FY 2015 IRF PPS final rule (79 FR 45872, 45882 through 45883), CMS froze the facility-level adjustment factors at the FY 2014 levels for FY 2015 and all subsequent years, unless and until we propose to update them again through future notice and comment rulemaking. For FY 2016, CMS will continue to hold the facility-level adjustment factors at the FY 2014 levels as we continue to monitor the most current IRF claims data available to assess the effects of the FY 2014 changes.

ICD-10-CM Conversion.

 In the FY 2015 IRF PPS final rule (79 FR 45872), CMS finalized conversions from the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) to the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for the IRF PPS, which will be effective when ICD-10-CM becomes the required medical data code set for use on Medicare claims and IRF‑PAI submissions. CMS reminds providers of IRF services that the implementation date for ICD-10-CM is October 1, 2015.

Be aware of all upcoming changes.

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