Fiscal Year 2023 Inpatient Rehabilitation Facility Prospective Payment System Proposed Rule (CMS-1767-P)
On March 31, 2022, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update Medicare payment policies and rates under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for fiscal year (FY) 2023. CMS is publishing this proposed rule in accordance with the legal requirements to update Medicare payment policies for IRFs on an annual basis.
For FY 2023, CMS is proposing to update the IRF PPS payment rates based on the proposed IRF market basket update less a productivity adjustment. CMS is proposing a permanent cap on year-to-year wage index decreases. Additionally, CMS is soliciting comments on the methodology used to update the IRF facility level adjustments (specifically, the rural, low-income, and teaching status adjustments). CMS is also soliciting comments on incorporating discharge to home health in the IRF transfer policy. In addition, CMS is proposing to codify our longstanding IRF teaching status adjustment policy in regulation and clarify certain teaching status adjustment policies, which would enable us to align the IRF policies with recent updates made to the Inpatient PPS and Inpatient Psychiatric Facility PPS policies.
CMS is proposing to expand the IRF qualify data reporting requirements under the IRF Quality Reporting Program (QRP). Finally, CMS is requesting information from stakeholders on a potential new outcome measure for the IRF QRP and the development and inclusion of health equity quality measures for the IRF QRP.
This fact sheet discusses the provisions of the proposed rule. The proposed rule [CMS-1767-P] can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection
Proposed Updates to the FY 2023 IRF PPS Payment Policies
For FY 2023, CMS is proposing to update the IRF PPS payment rates by 2.8% based on the IRF market basket update of 3.2% less a 0.4 percentage point productivity adjustment. CMS is proposing that if more recent data become available (for example, a more recent estimate of the market basket update or productivity adjustment), we would use these data, if appropriate, to determine the FY 2023 market basket update and the productivity adjustment in the final rule. In addition, the proposed rule contains an adjustment to the outlier threshold to maintain outlier payments at 3.0% of total payments. This adjustment will result in a 0.8 percentage point decrease in outlier payments. We estimate that overall IRF payments for FY 2023 would increase by 2.0% (or $170 million) relative to payments in FY 2022.
Proposed Permanent Cap on Wage Index Decreases:
In order to mitigate instability in IRF PPS payments due to significant wage index decreases that may affect providers in any given year, we are proposing a permanent 5% cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments.
Soliciting Comments on the Office of Inspector General (OIG) Recommendation to Include Home Health in the IRF Transfer Policy:
A recent Office of Inspector General (OIG) report that evaluated early discharges from IRFs to home health (A-01-20-00501) recommended that CMS expand the IRF transfer payment policy to apply to early discharges to home health. To assist us in balancing the needs of the patient while, at the same time, ensuring the integrity of the Medicare program, we are seeking feedback from stakeholders about potentially including home health in the IRF transfer payment policy, as recommended by OIG. We plan to analyze home health claims to determine the appropriateness of including home health in the IRF transfer policy, and are seeking comment to inform this future analysis and any potential future rulemaking.
Soliciting Comments on the Methodology for Updating the Facility-Level Adjustment Factors (specifically, the rural, low-income, and teaching status adjustments):
CMS is seeking public comments regarding the methodology used to determine the facility-level adjustment factors and suggestions for what may be driving the variability in the IRF teaching status adjustment factor.
IRF Teaching Status Adjustment Policy:
We are proposing to codify our longstanding IRF teaching status adjustment policy in regulation and clarify certain teaching status adjustment policies.
Proposed Updates to the IRF QRP
The IRF QRP is a pay-for-reporting program. IRFs that do not meet reporting requirements are subject to a 2.0 percentage point reduction in their Annual Increase Factor (AIF). CMS is proposing one policy change and is putting forth three Requests for Information (RFIs) related to the IRF QRP.
Quality Data Reporting on all IRF Patients Regardless of Payer
We are proposing to expand the IRF qualify data reporting requirements, which currently apply to all admitted IRF patients with Medicare Part A fee-for-service (FFS) and Medicare Part C, such that IRFs would begin collecting data on all IRF patients, regardless of payer. This policy proposal would help to ensure all IRF patients are receiving the same quality of care and that provider metrics reflect performance across the spectrum of IRF patients. We are proposing that this expanded quality reporting requirement would take effect starting with the FY 2025 IRF QRP, meaning that providers would need to start collecting the IRF-Patient Assessment Instrument (PAI) assessment on all patients receiving care in an IRF, regardless of payer, beginning on October 1, 2023.
Inclusion of the National Healthcare Safety Network (NHSN) Healthcare-associated Clostridioides difficile (C. difficile) Infection Outcome Measure in the IRF QRP – Request for Information (RFI)
We are seeking stakeholder feedback on the future inclusion of the National Healthcare Safety Network (NHSN) Healthcare-associated Clostridioides difficile Infection (HA-CDI) Outcome Measure as a digital quality measure in the IRF QRP. This measure tracks the development of new C. difficile infection among patients already admitted to IRFs, using algorithmic determinations from data sources widely available in electronic health records. This measure improves on the existing NHSN Facility-wide Inpatient Hospital-onset Clostridium difficile Infection (CDI) Outcome Measure (NQF #1717) by requiring both microbiologic evidence of C. difficile in stool and evidence of antimicrobial treatment. Through this RFI, we would like to assess the feasibility of this digital measure in IRFs. If this type of measure is proposed and finalized in a future rule, this would be the first digital measure in the IRF QRP.
Overarching Principles for Measuring Equity and Healthcare Quality Disparities Across CMS Quality Programs – Request for Information (RFI)
CMS is committed to achieving equity in health care outcomes for our beneficiaries. In this RFI, we provide an update on the equity work that is occurring across CMS. Included are: our plans to expand our quality reporting programs to allow us to provide more actionable, comprehensive information on health care disparities; measuring health care disparities through quality measurement and reporting these results to providers; and providing an update on our methods and research around measure development and disparity reporting.
We believe that a focused health equity measure would provide specific equity data that will help providers develop innovative and targeted interventions for impacted groups and would additionally provide transparency for beneficiaries. We also believe that by leveraging measures to give providers access to disparity information, they would be able to use this data to make informed decisions about their quality improvement initiatives. In this RFI, we are requesting feedback from stakeholders on the development and inclusion of health equity quality measures for the IRF QRP.
For further information, see the IRF center webpage: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS.