Fact Sheets

Fiscal Year 2019 Medicare Inpatient Rehabilitation Facility Prospective Payment System Final Rule (CMS-1688-F)

On July 31, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a final rule outlining changes on how Medicare pays inpatient rehabilitation facilities to support the Patients over Paperwork Initiative, and to facilitate the use of electronic health records. The final rule finalizes updates to Medicare payment policies and rates under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS).

The updates in the IRF PPS final rule further the agency’s priority of creating a patient-driven healthcare system by achieving greater price transparency, interoperability, and significant burden reduction, while ensuring a focus on quality, safety and program integrity.

In the FY 2018 IRF PPS proposed rule, CMS released a Request for Information (RFI) that solicited ideas to provide greater flexibilities and efficiencies in the IRF PPS. CMS received numerous ideas in response to the Request for Information on how to improve the IRF PPS from beneficiaries, clinicians, advocacy groups, and other stakeholders. The policies in the final rule are responsive to this feedback.

This fact sheet discusses the major provisions of the final rule. The final rule can be downloaded from the Federal Register at:

Burden Reduction / Patients over Paperwork

The rule finalizes a variety of changes in response to suggestions from the public on ways to reduce burden for IRFs. Overall, the final rule will reduce regulatory burden for IRF providers by well over 300,000 hours. In addition to policies that reduce the number of measures IRFs are required to report, CMS is reducing burden by easing documentation requirements and providing flexibility in several areas, while still maintaining patient and program integrity protections where they are needed.

IRF Coverage Requirements
To reduce regulatory burden on rehabilitation providers and physicians, we are finalizing revisions to the following IRF coverage criteria as suggested by some of the comments received in response to the RFI in the FY 2018 IRF PPS proposed rule:

  • Allow the post-admission physician evaluation to count as one of the face-to-face physician visits. CMS believes that the rehabilitation physician should have the flexibility to assess the patient and conduct the post-admission physician evaluation during one of the three face-to-face physician visits required in the first week of the IRF admission.
  • Allow the rehabilitation physician to lead the interdisciplinary team meeting remotely without any additional documentation requirements. CMS believes this change will allow time management flexibility and convenience.
  • Remove the admission order documentation requirement in an effort to reduce duplicative documentation requirements. CMS believes this requirement will continue to be appropriately addressed through the enforcement of the hospital conditions of participation, as well as the hospital admission order payment requirements, both of which IRFs need to comply with.

The IRF coverage criteria changes listed above will be effective in FY 2019, that is, for all IRF discharges beginning on or after October 1, 2018.

Removal of Functional Independence Measure (FIM™) Instrument and Associated Function Modifiers from the IRF-Patient Assessment Instrument (PAI) and Refinements to the Case Mix Classification System
Under the IRF Quality Reporting Program (QRP), CMS began collecting a number of patient assessment items on the IRF-PAI needed to calculate the IRF QRP quality measures. As these items, collected nationally in the Quality Indicators section of the IRF-PAI since October 1, 2016, capture data that overlap with data collected through the FIM™ Instrument and associated Function Modifiers, we are finalizing the removal of the FIM™ Instrument and associated Function Modifiers from the IRF-PAI for discharges beginning on or after October 1, 2019.

We also finalized the incorporation of certain data items located in the Quality Indicators section of the IRF-PAI into the IRF case-mix classification system and the use of these data items to assign patients into a Case-Mix Group (CMG) for payment purposes under the IRF PPS for discharges beginning on or after October 1, 2019. However, after reviewing public comments received on the FY 2019 IRF PPS proposed rule regarding the use of only one year of data, we will incorporate two full years of data (FY 2017 and FY 2018) into our analyses used to revise the CMG definitions that will be effective beginning in FY 2020. Any changes to the revised CMG definitions resulting from the incorporation of an additional year of data (FY 2018) into the analysis will be addressed in future rulemaking.

In addition, for several years now, we have provided training opportunities for IRFs on coding the Quality Indicator data items, including in-person training, webinars, on-line training and help desk emails. We will continue to provide training and educational resources on these items prior to the effective date of October 1, 2019.

Meaningful Measures

The final rule reduces the number of measures IRFs are required to report in the IRF QRP and addresses the Meaningful Measures Initiative goal of a prudent measure set that focuses on the most critical quality issues with the least burden for clinicians and providers.

The final rule removes two measures from the IRF QRP measure set. These measures either have significant operational challenges with reporting or the measure performance among IRFs is so high and unvarying that meaningful distinctions in improvements in performance can be no longer be made.

    • National Healthcare Safety Network (NHSN) Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716) (beginning with the FY 2020 IRF QRP)
    • Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) (beginning with the FY 2021 IRF QRP)

Federal Registry (NHSN)

Measure Name


CDC – Methicillin Resistant Staph Aureus Infection

The cost associated with the measure outweighs the benefit of its continued use and a measure that is more strongly associated with desired patient outcomes for the particular topic is available

CMS Assessment Instrument

Patient Influenza Vaccination Measure

The cost associated with the measure outweighs the benefit of its continued use.


Further, CMS is:

  • Updating the methods by which IRFs are notified of non-compliance with the requirements of the IRF QRP.
  • Displaying data on four assessment-based functional outcome measures in CY 2020.
  • Adopting an eighth factor to consider when evaluating measures for removal from the IRF QRP measure set: the costs associated with a measure outweighs the benefit of its continued use in the program.

Updates to IRF Payment Rates

For FY 2019, CMS is updating IRF PPS payments to reflect an estimated 1.35 percent increase factor (reflecting an IRF market basket update of 2.9 percent, reduced by a 0.8 percentage point multifactor productivity adjustment and a 0.75 percentage point reduction required by law). An additional approximate 0.1 percent decrease to aggregate payments due to updating the outlier threshold to maintain estimated outlier payments at 3.0 percent of total payments results in an overall estimated update for FY 2019 of approximately 1.3 percent (or $105 million), relative to payments in FY 2018.

Advancing My HealthEData: Request for Information

In the FY 2019 IRF PPS proposed rule, CMS released an RFI to obtain feedback on positive solutions to better achieve interoperability or the sharing of healthcare data between providers. Specifically, CMS requested public feedback through a RFI on the possibility of revising Conditions of Participation related to interoperability as a way to increase electronic sharing of data by providers. CMS will actively consider all input in developing future regulatory proposals or future sub-regulatory guidance.