CMS Releases IRF PPS Proposed Rule for FY 2021

The Centers for Medicare and Medicaid Services released the inpatient rehabilitation facility prospective payment system (IRF PPS) proposed rule for fiscal year (FY) 2021. Due to the COVID-19 public health emergency and the demands that have been placed on the healthcare industry, CMS limited the rulemaking to essential policies and proposals to reduce provider burden and assist IRF’s, especially in the COVID-19 response. Some of the proposals include:

• Payment: CMS proposes to implement its annual updates to the weights and average lengths of stays for the IRF PPS Case Mix Groups (CMGs), update the standard payment conversion factor due to growth in the IRF market basket, and increase the labor-related share. Overall, CMS estimates payments to IRFs will increase by 2.9 percent.
• IRF Coverage Requirements: CMS proposes to amend the IRF coverage requirements to remove the post-admission physician evaluation (PAPE) requirement.
• Non-Physician Practitioners: CMS proposes to modify the IRF coverage requirements to allow non-physician practitioners (NPP) to perform certain services that are currently required to be performed by a rehabilitation physician. Some of these services include the pre-admission screening, developing the individual plan of care, performing three face-to-face visits per week, and leading interdisciplinary team meetings
• Documentation: CMS proposes to codify existing documentation instructions and guidance to ensure uniformity between the Medicare Benefit Policy Manual and regulations that are applicable.
• Definition of a Week: CMS clarifies that, for the purposes of the intensity of therapy requirement, a “week” would be defined as a period of seven consecutive calendar days beginning with the date of admission to the IRF.
• Quality Reporting Program (QRP): The only provision impacting the QRP in the proposed rule is a two percent reduction to the applicable FY 2021 market basket increase factor for IRFs that fail to comply with quality data submission requirements.
• Outlier Threshold: CMS proposes to update the outlier threshold amount from $9,300 for FY 2020 to $8,102 for FY 2021 ensure outlier payments account for 3 percent of total payments. CMS estimates there will be a $40 million increase in aggregate payments to IRFs due to this proposed change. The outlier threshold is used to determine when an IRF is entitled to an outlier payment. CMS attempts to set the outlier threshold each year so that 3 percent of total payments are outliers.

The proposed rule will be published in the April 21, 2020 edition of the Federal Register. A more in-depth analysis will be forthcoming following the publication. A fact sheet is also available for members to obtain additional information.