Inpatient Rehabilitation Facilities

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The Centers for Medicare & Medicaid Services (CMS) has finalized changes to the discharge planning conditions of participation (CoPs) for hospitals (including long-term care hospitals (LTCHs) and inpatient rehabilitation hospitals (IRFs)), critical access hospitals (CAHs), and home health agencies (HHAs).  CMS believes the rule, which implements statutory requirements under the Improving Medicare Post-Acute Care Transformation…

The Centers for Medicare & Medicaid Services (CMS) has published its final rule to update the Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2020.  CMS expects IRF PPS payments to increase by $210 million – or 2.5% – relative to FY 2019 payments under the final rule, due to…

The Centers for Medicare & Medicaid Services (CMS) has released its proposed rule to update the Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2020.  CMS projects that IRF PPS payments would rise by $195 million under the proposed rule.  Specifically, CMS proposes a 2.5% increase factor, based on an…

The Medicare Payment Advisory Commission (MedPAC) has issued its annual report to Congress with recommendations for updates to Medicare fee-for-service rates for 2020.

With regard to hospital services, MedPAC recommends that Congress update Medicare inpatient and outpatient prospective payment system (PPS) rates by 2% in 2020.  MedPAC also proposes a new hospital value incentive program (HVIP) to replace Medicare’s current inpatient hospital quality programs.[1]  In short, the HVIP would include a small set of population-based outcome, patient experience, and value measures; score all hospitals based on the same prospectively-set performance targets; and account for social risk factors by distributing payment adjustments through peer grouping.  MedPAC believes the HVIP “will be simpler and will produce more equitable results compared with existing quality payment programs.”

MedPAC recommends no change to Medicare physician fee schedule rates in 2020, in accordance with the Medicare Access and CHIP Reauthorization Act of 2015.  MedPAC reiterates its criticism of current Merit-based Incentive Payment System measures, stating that they “are neither effective in assessing true clinician quality nor appropriate for Medicare’s value-based purchasing programs.”

MedPAC continues to call for implementation of a unified PPS for post-acute care (PAC) providers, including skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs).   Acknowledging that implementation of a unified PAC PPS “is on a longer timetable,” MedPAC recommends the following setting-specific interim payment updates for 2020:…
Continue Reading MedPAC Recommends Medicare Payment Updates for 2020

The Centers for Medicare & Medicaid Services (CMS) expects Medicare payments to inpatient rehabilitation facilities (IRFs) to increase by 1.3% ($105 million) in fiscal year (FY) 2019 under the final IRF prospective payment system (PPS) rule.  For FY 2019, the IRF PPS update factor is 1.35%, based on an IRF market basket update of…

The Centers for Medicare & Medicaid Services (CMS) has published a proposed rule to update Medicare rates for inpatient rehabilitation facility (IRF) services for fiscal year (FY) 2019. CMS estimates that IRF prospective payment system (PPS) payments would increase by a total of $75 million under the proposed rule compared to FY 2018 levels. Specifically,…

The Medicare Payment Advisory Commission (MedPAC) has issued its annual recommendations to Congress on updates to Medicare fee-for-service payment system rates, many of which overlap recommendations made in previous years. For instance, MedPAC continues to call for implementation of a unified prospective payment system (PPS) for post-acute care (PAC) providers, including skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs), to be implemented beginning in 2021.  In the latest report, MedPAC recommends that Congress direct the Secretary of Health and Human Services to begin blending the relative weights of the setting-specific payment systems and the unified PAC PPS in 2019.  At the same time, MedPAC recommends that Congress modify the updates for the individual PAC systems by:

  • Reducing home health payment rates by 5% in 2019, rebasing payments beginning in 2020, and eliminating the use of the number of HHA therapy visits as a factor in payment determinations.
  • Reducing Medicare IRF PPS rates by 5% for FY 2019.
  • Eliminating the LTCH PPS update for FY 2019.
  • Eliminating SNF PPS market basket increases for fiscal years (FYs) 2019 and 2020, and implementing previous recommendations to reform SNF PPS payments in a way that shifts payments to medically-complex stays. MedPAC notes that it has endorsed SNF PPS reforms since 2008, and it “has grown increasingly frustrated with the lack of statutory and regulatory actions to lower the level of payments and implement a revised payment system.”

MedPAC also includes detailed discussions of Medicare payment for physician and other health professional services. MedPAC recommends increasing physician fee schedule rates in 2019 by the amount specified in current law (0.25%). MedPAC also offers extensive recommendations for revising the framework for updating Medicare physician payments established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Most notably, MedPAC recommends eliminating the Merit-based Incentive Payment System (MIPS) and adopting a new voluntary value program under which: (1) clinicians can elect to be measured as part of a voluntary group; and (2) clinicians in voluntary groups can qualify for a value payment based on their group’s performance on a set of population-based measures. Additionally, MedPAC presents the findings of its Congressionally-mandated report on coverage of telehealth services.

With regard to other Medicare fee-for-service payment systems, MedPAC recommends:…
Continue Reading MedPAC Calls for Medicare Post-Acute Care and Physician Payment Reforms, Recommends Medicare Payment Updates

CMS is gearing up for the fiscal year (FY) 2019 Medicare payment system rulemaking cycle. The agency has requested that the White House Office of Management and Budget (OMB) review the FY 2019 proposed rules for the following payment systems:

  • The Hospital Inpatient Prospective Payment System for Acute Care Hospitals and the Long-Term Care Hospital

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CMS has finalized Medicare prospective payment system (PPS) rates for inpatient rehabilitation facility (IRF) services for fiscal year (FY) 2018, which begins October 1, 2017. CMS estimates that IRF PPS payments will increase by 0.9% overall ($75 million) under the final rule compared to FY 2017 levels.  As mandated by the  Medicare Access and CHIP…

CMS has published a proposed rule to establish FY 2018 Medicare prospective payment system (PPS) rates for inpatient rehabilitation facility (IRF) services.  CMS estimates that IRF PPS payments would increase by 1.0% overall ($80 million) under the proposed rule compared to FY 2017 levels.  As mandated by the  Medicare Access and CHIP Reauthorization Act of …

The Medicare Payment Advisory Commission (MedPAC) has released recommendations to Congress regarding how Medicare fee-for-service payment system rates should be adjusted in 2018. One of the focus areas for MedPAC is post-acute care (PAC), which includes skilled nursing facility (SNF), home health agency (HHA), inpatient rehabilitation facility (IRF), and long-term care hospital (LTCH) services.  According to MedPAC, the “unnecessarily high level of spending and the inequity of payments across different types of patients” necessitate changes to both payment levels and overall system design.  MedPAC therefore reiterates its previous recommendation for a uniform Medicare PAC prospective payment system (PPS) that bases payments on patient characteristics; MedPAC believes that transition to the PAC PPS could begin as early as 2021. In the meantime, MedPAC recommends that Congress:…
Continue Reading Post-Acute Care Providers Targeted for Cuts in MedPAC’s Latest Report to Congress

According to a recent HHS Office of Inspector General (OIG) report, about 29% of Medicare beneficiaries experienced adverse or temporary harm events during their rehabilitation hospital stay, based on sample of 417 beneficiaries in March 2012. This rate is similar to the incidence of adverse events in acute-care hospitals and skilled nursing facilities. The OIG estimates that 46% of the rehab hospital adverse or temporary harm events were clearly or likely preventable, attributable to such factors as substandard treatment, inadequate patient monitoring, and failure to provide needed treatment. One quarter of impacted patients were transferred to an acute-care hospital for treatment.
Continue Reading OIG Examines Adverse Events in Rehab Hospitals

On August 5, 2016, CMS is publishing its final rule to update Medicare prospective payment system (PPS) rates for inpatient rehabilitation facilities (IRFs) for FY 2017, which begins October 1, 2016. CMS estimates that payments to IRFs will increase by 1.9% overall ($145 million) in FY 2017 compared to FY 2016 levels based on all policies and updates in the final rule.  Specifically, CMS finalized a 1.65% increase factor, derived from a 2.7% IRF-specific market basket update that is reduced by a 0.3 percentage point multi-factor productivity adjustment and an additional 0.75 percentage point reduction required by the Affordable Care Act.  Rates will be further increased by approximately 0.3 percentage points due to an update to the outlier threshold.  Note that an IRF that does not submit required quality data to CMS under the IRF Quality Reporting Program (QRP) is subject to a 2.0 percentage point decrease in its annual update. …
Continue Reading CMS Finalizes Medicare IRF PPS Update for FY 2017

CMS has published its proposed rule to update Medicare prospective payment system (PPS) rates for inpatient rehabilitation facilities (IRFs) for FY 2017, which begins October 1, 2016. CMS estimates that rates would increase by 1.6% overall ($125 million) under the proposed rule compared to FY 2016 levels based on all policies and updates in…

The Medicare Payment Advisory Commission (MedPAC) has released its annual recommendations to Congress on Medicare policies, including Medicare fee-for-service (FFS) payment updates and a status report on the Medicare Advantage and Medicare Part D programs.  The following are highlights of the recommendations for 2017 (some of which were recommended previously):…
Continue Reading MedPAC Releases Annual Recommendations to Congress on Medicare Policy

On February 9, 2016, the Obama Administration released its proposed fiscal year (FY) 2017 budget, which contains significant Medicare and Medicaid reimbursement and program integrity legislative proposals – including $419 billion in Medicare savings over 10 years. These proposed policy changes would require action by Congress, and Republican Congressional leaders have already voiced general…

On February 4, 2016, CMS is hosting a provider call on Improving Medicare Post-Acute Care Transformation (IMPACT) Act requirements regarding the reporting of standardized patient assessment data by post-acute care (PAC) providers (skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals). During this call, CMS and the Office of the National…

On November 20, 2015, CMS is publishing two notices requesting public comments on the development of surveys regarding patient and family member experiences with the care received in (1) inpatient rehabilitation facilities (IRFs), and (2) long-term care hospitals (LTCHs).  …
Continue Reading CMS Seeking Comments on Medicare IRF/LTCH Patient Experience Surveys

On August 6, 2015, CMS published its final rule to update Medicare PPS rates for inpatient rehabilitation facilities for FY 2016, which begins October 1, 2015.  CMS estimates that rates will increase by 1.8% overall ($135 million) under the final rule compared to FY 2015 levels.  This increase reflects a 2.4% market basket update (using a new IRF-specific market basket) that is reduced by a 0.5 percentage point multi-factor productivity adjustment and an additional 0.2 percentage point reduction required by the Affordable Care Act, with an additional 0.1% decrease resulting from an update to the outlier threshold.  The standard payment conversion factor for discharges for FY 2016 will be $15,478, compared to the FY 2015 conversion factor of $15,198. In this final rule CMS adopts for the first time a IRF-specific market basket to replace the 2008-based market basket for rehabilitation, psychiatric, and long-term care facilities.
Continue Reading CMS Finalizes Medicare IRF PPS Rates/Policies for FY 2016

Despite the recent flurry of activity on Medicare payment rules, more are in the pipeline. CMS has sent the final fiscal year (FY) 2016 Medicare skilled nursing facility, hospice, inpatient rehabilitation facility, and inpatient psychiatric facility payment rules to the White House Office of Management and Budget for final regulatory clearance. The FY 2016 final…