Fact Sheets

Fiscal Year (FY) 2021 Inpatient Rehabilitation Facilities (IRF) Prospective Payment System (PPS) (CMS-1729-P)

On April 16, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that updates Medicare payment policies and rates for facilities under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) for fiscal year (FY) 2021. The IRF PPS proposed rule is one of five proposed Medicare payment rules released on a fiscal year cycle to define payment and policy for inpatient hospitals, long-term care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, skilled nursing facilities, and hospices. As with these other rules, CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for inpatient rehabilitation facilities on an annual basis. In recognition of the significant impact of the COVID-19 public health emergency, and limited capacity of health care providers to review and provide comment on extensive proposals, CMS has limited annual IRF rulemaking required by statute to essential policies including Medicare payment to IRFs, as well as proposals that reduce provider burden and may help providers in the COVID-19 response.

Coronavirus Disease 2019 (COVID-19) Pandemic:

The health and safety of America’s patients and provider workforce in the face of the Coronavirus Disease 2019 (COVID-19) pandemic is the top priority of the Trump Administration and CMS. We are working around the clock to equip the American healthcare system with maximum flexibility to respond to the COVID-19 pandemic. Recently, at President Trump’s direction, CMS issued an unprecedented array of temporary regulatory waivers and new rules to equip the American healthcare system with maximum flexibility to respond to the COVID-19 pandemic, including waiving the “60 percent” rule for patients admitted solely to respond to the emergency and allowing the required face-to-face physician visits in IRFs to be done using telehealth. In addition, to reduce provider burden, CMS removed of the post-admission physician evaluation requirement since much of the same information continues to be included in the pre-admission screening of the patient and the patient’s plan of care. 

To keep up with the important work the Task Force is doing in response to COVID-19, go to  For information specific to CMS, please visit the Current Emergencies Website.

This fact sheet discusses several provisions of the proposed rule: coverage requirements, the post-admission physician evaluation, and payment requirements.  CMS is not proposing any changes to the IRF Quality Reporting Program (QRP) for FY 2021.

Medicare Inpatient Rehabilitation Facility Coverage Requirements:  

In order for an IRF claim to be considered reasonable and necessary under section 1862(a)(1) of the Social Security Act, there must be a reasonable expectation that the patient meets all of the IRF coverage requirements at the time of the patient’s admission to the IRF.

In the FY 2021 IRF PPS proposed rule, CMS is proposing to allow non-physician practitioners to perform any of the IRF coverage service and documentation duties that are currently required to be performed by a rehabilitation physician, provided that the duties are within the non-physician practitioner’s scope of practice under applicable state law. CMS is also soliciting comments from stakeholders on further ideas to reduce provider burden, as well as on proposals to codify subregulatory guidance on preadmission screening documentation and certain other IRF coverage requirements.

Post-Admission Physician Evaluation:

Currently, except during the public health emergency for the COVID-19 pandemic, IRFs are required to conduct a post-admission physician evaluation within the first 24 hours of the patient’s admission to the IRF to confirm that no changes have occurred since the preadmission screening, and that the patient is still appropriate for IRF admission. CMS is proposing to no longer require a post-admission physician evaluation since the post-admission evaluation covers much of the same information as continues to be included in the pre-admission screening of the patient and the patient’s plan of care.   IRFs, in consultation with the patient's physician or other treating clinician, would still have the flexibility to conduct patient visits within the first 24 hours of an IRF admission if the patient's condition warrants it.

Updates to IRF Payment Rates:

For FY 2021, CMS is proposing updates to the IRF PPS payment rates using the most recent data to reflect an estimated 2.5 percent increase factor (reflecting an IRF market basket increase factor of 2.9 percent, reduced by a 0.4 percentage point multifactor productivity adjustment). An additional 0.4 percent increase 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 update of 2.9 percent (or $270 million) for FY 2021, relative to payments in FY 2020.  We are also proposing to adopt the most recent Office of Management and Budget (OMB) statistical area delineations and apply a 5 percent cap on wage index decreases from FY 2020 to FY 2021.

CMS encourages comments on this proposed rule and will accept comments until June 15, 2020. 

The proposed rule [CMS-1737-P] can be downloaded from the Federal Register at:

For further information, see the IRF center webpage:


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