Fact Sheets

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

On August 4, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that updates Medicare payment policies and rates for facilities under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) for fiscal year (FY) 2021.  CMS is publishing this final rule consistent with the legal requirements to update Medicare payment policies for IRFs on an annual basis. This final rule also includes making permanent the regulatory change to eliminate the requirement for physicians to conduct a post admission visit since much of the information is included in the pre-admission screening documentation. This flexibility was offered during the Coronavirus Disease 2019 (COVID-19) public health emergency (and would make this flexibility permanent beyond the expiration of the PHE).

This fact sheet discusses several provisions of the final rule: coverage requirements, the post-admission physician evaluation, and payment requirements.  CMS is not finalizing 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 final rule, CMS is finalizing certain changes to our regulations to codify existing documentation instructions and guidance that will improve clarity and reduce administrative burden on both IRF providers and Medicare Administrative Contractors (MACs).  

Post-Admission Physician Evaluation:

Currently, except during the COVID-19 PHE, 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 finalizing the permanent elimination of the post-admission physician evaluation, effective October 1, 2020, as 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.

Increased Flexibility for Physicians:

Currently, physicians are required to perform a visit to each patient three times per week to ensure that the patient’s care plan is working as intended.  Other qualified medical professionals may perform additional visits, as clinically appropriate, throughout the week.  Non-physician practitioners (NPPs) are an important part of the interdisciplinary care of patients and often support physicians during their visits to patients. 

Patients stay in an IRF for intensive rehabilitation therapy for 13 calendar days, on average.  In recognition of the interdisciplinary role that NPPs are currently performing with patients in the IRF, CMS is finalizing that a NPP may perform one of the three required visits in lieu of the physician in the second and later weeks of a patient’s care, when consistent with the NPP’s state scope of practice.  Physicians continue to have the flexibility to see the patient on three or more occasions per week, as is currently permitted.

CMS is continuing the requirements that a physician reviews and concurs with the preadmission screening for the IRF admission, establishes the overall plan of care, and leads the weekly interdisciplinary team conferences, which include rehabilitation nurses, social workers or case managers, and treating therapists carrying out the patient’s care plan.

Updates to IRF Payment Rates:

For FY 2021, CMS is updating the IRF PPS payment rates by 2.4 percent (reflecting a 2.4 percent IRF market basket reduced by a 0.0 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 2.8 percent (or $260 million) for FY 2021, relative to payments in FY 2020.  We are also adopting recent Office of Management and Budget (OMB) statistical area delineations and applying a 5 percent cap on wage index decreases from FY 2020 to FY 2021.

The final rule [CMS-1729-F] can be downloaded from the Federal Register at:

For further information, see the IRF center webpage: