Fact sheet

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

On April 27, 2018, the Centers for Medicare & Medicaid Services (CMS) proposed changes on how Medicare pays inpatient rehabilitation facilities to make it easier for providers to spend more time with their patients, and improve the use of electronic health records. The proposed rule issued today proposes updates to Medicare payment policies and rates under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS).

The proposed policies in the IRF PPS proposed rule would further the agency’s priority of creating a patient-driven healthcare system by achieving greater price transparency, interoperability, and significant burden reduction so that inpatient rehabilitation facilities can operate with better flexibility.

In the FY 2018 IRF PPS proposed rule, CMS released a Request for Information 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 proposed rule are responsive to this feedback.

This fact sheet discusses the major provisions of the proposed rule. The deadline for submitting comments on the proposed rule and the Request for Information is June 26, 2018. The proposed rule and the Request for Information (CMS-1688-P) can be downloaded from the Federal Register at:

Advancing My HealthEData: Request for Information from stakeholders

In addition to payment and policy proposals, CMS is releasing a Request for Information (RFI) to obtain feedback on positive solutions to better achieve interoperability or the sharing of healthcare data between providers. Specifically, CMS is requesting stakeholder 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. This will inform next steps to advance this critical initiative.

In responding to the RFI, commenters should provide clear and concise proposals that include data and specific examples. CMS will not respond to RFI comment submissions in the final rule, but rather will actively consider all input in developing future regulatory proposals or future sub-regulatory guidance.

Burden Reduction / Patients over Paperwork

This rule proposes a variety of changes in response to suggestions from stakeholders on ways to reduce burden for IRFs. Overall, the proposed rule would reduce the number of hours IRFs spend on paperwork by well over 35,000 hours. In addition to proposals that would reduce the number of measures IRFs are required to report, CMS is proposing to reduce 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 proposing to revise the following IRF coverage criteria as suggested by some of the comments received in response to the request for information 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 proposed 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.

We are proposing that these IRF coverage criteria changes become effective in FY 2019, that is, for all IRF discharges beginning on or after October 1, 2018.

Proposed Removal of Functional Independence Measure (FIMtm)Instrument and Associated Function Modifiers from the IRF-Patient Assessment Instrument (PAI) and Proposed 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 implement quality measures. As these items, collected in the Quality Indicators section of the assessment, capture data that overlap with data collected through the FIM™ Instrument and associated Function Modifiers, we are proposing to remove the FIM™ Instrument and associated Function Modifiers from the IRF-PAI beginning on October 1, 2019.

We are also proposing to incorporate certain data items located in the Quality Indicators section of the IRF-PAI into the IRF case-mix classification system and to use these data items to assign patients into a Case-Mix Group (CMG) for payment purposes under the IRF PPS. We are proposing to use these data items to update the functional status scores used in the case-mix system, revise the CMG definitions to reflect the use of the new functional status scores, and update the relative weights and average length of stay values associated with the revised CMGs beginning on October 1, 2019.

Meaningful Measures

The proposed rule would reduce the number of measures inpatient rehabilitation facilities are required to report in the IRF QRP. For the FY 2019 IRF PPS proposed rule, the IRF QRP proposes the following to address 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. CMS is proposing to remove two measures in the IRF QRP. 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 2021 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 2019 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

Measure Name


Patient Influenza Vaccination Measure

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

Further, CMS is proposing to:

  • Update to the methods by which IRFs are notified of non-compliance with the requirements of the IRF QRP.
  • Display data on the four assessment-based functional outcome measures in CY 2020.

Proposed Updates to IRF Payment Rates

For FY 2019, CMS is proposing to update 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). CMS is proposing that if more recent data becomes available (for example, a more recent estimate of the market basket or multifactor productivity adjustment), we would use the more recent estimates to determine the FY 2019 update in the final rule. An additional approximate 0.4 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 0.9 percent (or $ million), relative to payments in FY 2018.

Solicitation of Comments Regarding Additional Changes to the Physician Supervision Requirement

When the IRF coverage criteria were initially implemented in 2010, we believed that the rehabilitation physician visits should be completed face-to-face by a rehabilitation physician to ensure that the patient receives the most comprehensive care throughout the IRF stay.

As part of our efforts to assist in reducing unnecessary regulatory burden on IRFs, this is an issue we would like to further explore. We are interested in comments on whether the rehabilitation physician should have the flexibility to determine when the patient needs to be assessed face-to-face and when the assessment can be successfully accomplished remotely via another mode of communication, such as video or telephone conferencing. We are also seeking feedback from public stakeholders on the training that non-physician practitioners receive that is relevant to inpatient rehabilitation, and ways in which the role of non-physician practitioners could be expanded in the IRF setting while maintaining high quality hospital level of care for patients.