Fact Sheets

Fiscal Year 2015 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities

Fiscal Year 2015 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities

Overview.  On July 31, 2014, the Centers for Medicare & Medicaid Services (CMS) issued a final rule updating fiscal year (FY) 2015 Medicare payment policies and rates for the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the IRF Quality Reporting Program (IRF QRP).  

CHANGES TO IRF PAYMENT POLICIES AND RATES:

FY 2015 Updates to the Payment Rates under the IRF PPS.  CMS estimates that aggregate payments to IRFs will increase in FY 2015 by $180 million, or 2.4 percent, relative to payments in FY 2014. This estimated increase is attributed to a 2.2 percent payment update, which includes a 2.9 percent market basket increase factor, reduced by a 0.5 percentage point multi-factor productivity adjustment and an additional 0.2 percentage point reduction as required by law. In addition, CMS will update the outlier threshold, increasing IRF PPS payments by an estimated 0.2 percent.

Facility-Level Adjustment Updates.  CMS will freeze the facility-level adjustment factors for FY 2015 and subsequent years at the FY 2014 levels, while we continue to monitor the most current IRF data available and evaluate the effects of the FY 2014 changes.  Additionally, this will allow providers time to acclimate to the FY 2014 changes.

ICD-10-CM Conversion.  The FY 2015 IRF PPS final rule addresses the transition from ICD-9-CM to ICD-10-CM for all diagnosis codes used in the IRF PPS Grouper software and the software for evaluating IRFs’ compliance with the 60 percent rule.  Using the General Equivalence Mappings (GEMs) tool, we have transitioned the following lists of diagnosis codes used in the IRF PPS: the List of Comorbidities, Codes That Meet Presumptive Compliance Criteria, and Impairment Group Codes (IGC) That Meet Presumptive Compliance Criteria.  Our intent in transitioning from ICD-9-CM to ICD-10-CM was for the converted codes to reflect essentially the same meaning.  We are finalizing the conversion of ICD-9-CM to ICD-10-CM codes for the IRF PPS in this final rule, but in light of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. No. 113-93), the effective date of those changes will be the date when ICD-10-CM becomes the required medical data code set for use on Medicare claims and IRF-PAI submissions.  Until that time, we will continue to require use of the ICD-9-CM codes for the IRF PPS.  
  
Further Refinements to the Presumptive Compliance Methodology.  In the FY 2014 IRF PPS final rule (78 FR 47860, 47887 through 47890), we revised the list of ICD-9-CM diagnosis codes that are compared with a patient’s comorbidities in determining an IRF’s presumptive compliance with the 60 percent rule, but did not address the IGC or Etiologic Diagnosis portions of those codes.  In this final rule, CMS is finalizing some additional revisions to the comorbidity, IGC, and Etiologic Diagnosis portions of the presumptive compliance methodology to be consistent with the changes implemented in the FY 2014 final rule.  In response to public comments, this final rule delays the effective date for the revisions to the presumptive compliance codes finalized in the FY 2014 IRF PPS final rule and the changes finalized in this rule until compliance review periods beginning on or after October 1, 2015.

New IRF-Patient Assessment Instrument (PAI) Item for Therapy Data Collection.  CMS is adding a new item to the IRF-PAI that requires IRFs to record how much and what type of therapy (i.e. Individual, Group, Concurrent, and Co-Treatment) patients receive in each therapy discipline (i.e. physical therapy, occupational therapy, and speech-language pathology), similar to what is currently reported on the Minimum Data Set in the skilled nursing facility setting.  We will require IRFs to record the total number of therapy minutes received by mode and discipline only for weeks one and two of the IRF stay.  We will also require “Concurrent Therapy” to be reported as a separate category from “Group Therapy.” This requirement will become effective for IRF discharges occurring on or after October 1, 2015.  

New IRF-PAI Indicator for Arthritis Diagnosis Codes.  CMS will implement a “Yes”/“No” indicator to the IRF-PAI form in which providers can indicate that the prior treatment and severity requirements have been met for patients with arthritis conditions.  The addition of this item will mitigate a potential increase in burden due to the changes in the presumptive compliance methodology finalized in the FY 2014 IRF PPS final rule (78 FR 47860, 47887 through 47890) and the changes finalized in this final rule.  Medicare Administrative Contractors (MACs) will determine whether inclusion of the arthritis codes indicated with a “Yes” on the IRF-PAI would be enough for the facility to comply with the 60 percent rule requirement.  If so, then the MAC would be required to take a random sample of these cases to verify that the requirements were indeed being met.  This requirement will become effective for IRF discharges occurring on or after October 1, 2015.

CHANGES TO THE IRF QRP:

New Measure Proposals

CMS is finalizing two proposed quality measures for the IRF QRP:  NHSN Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716), and NHSN Facility-Wide Inpatient Hospital-Onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1717).  IRFs will be required to begin reporting these quality measures via the Center for Disease Control and Prevention’s (CDC) National Healthcare Safety Network (NHSN) beginning with admissions and discharges occurring on or after January 1, 2015.

New Policy Proposals

Reconsideration Process.  CMS is finalizing a formal reconsideration policy for the IRF QRP, which require that IRF providers follow specific procedures when submitting a request for CMS’ reconsideration of an initial IRF QRP provider compliance determination.

Data Completion Thresholds and Data Validation.  CMS is finalizing our proposed Data Accuracy Validation policy, which will require randomly selected IRF providers to meet a 75% data accuracy threshold for certain required IRF-PAI quality indicator data items.  We are additionally finalizing our proposed Data Completion thresholds, which require IRF providers to meet a data completion threshold of 95% for mandatory IRF-PAI quality indicator items, as well as a threshold of 100% for data submitted through the CDC’s NHSN (i.e., data covering each month of the applicable reporting period).  

The final rule will be published in the Federal Register on August 6, 2014.  

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