Fact sheet




OVERVIEW:  On April 28, 2009, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update payment rates and policies under Medicare’s Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS).  The proposed rule would affect discharges from IRFs on or after October 1, 2009. 

In addition to updating the payment rates for IRFs, the proposed rule would clarify the requirements for inpatient admissions and post-admission procedures, including developing and implementing an overall individual treatment plan for each Medicare beneficiary.  The proposed rule would emphasize the role of a rehabilitation physician in ordering IRF services and providing ongoing oversight of each beneficiary’s care. 

The proposed clarifications were developed in consultation with rehabilitation specialists from the National Institutes of Health and medical directors from several Medicare fiscal intermediaries, and took into account comments from representatives of the IRF industry on a CMS Report to Congress in 2009.  They reflect current best practices for inpatient rehabilitation services, and are intended to promote greater transparency and consistency in the medical review activities undertaken by Medicare’s contractors.  This, in turn, should promote greater certainty for IRFs regarding what they should do to receive consistent payment from Medicare and reduce the number of disputed claims and appeals.

In addition to the proposed rule, CMS is posting draft revisions to the Medicare Benefit Policy Manual (MBPM) for public comment.  This draft makes conforming changes to the manual based on the proposed rule; it provides detailed policy guidance regarding the selection of patients for admission to IRFs, and the development and implementation of individual treatment plans. 

BACKGROUND:  Prior to the introduction of the Inpatient Prospective Payment System (IPPS) in 1983, inpatient hospital care was reimbursed on a cost basis.  Payment for the inpatient stay generally included payment for both treatment of the acute condition that required inpatient care and any necessary inpatient rehabilitation services.  The IPPS changed this, paying for the acute care based on the patient’s diagnosis, as classified under the Diagnosis Related Group, but the new classifications and payment rates could not fully address the variability of the rehabilitation portion of a hospital stay.  Thus, in 1983, post-acute hospital level rehabilitation services were excluded from the IPPS and continued to be reimbursed on a cost basis. 

Guidance on the interpretation of the regulations and on the criteria for Medicare coverage of inpatient hospital rehabilitation services was provided in a HCFA Ruling, HCFAR 85-2-1, and the regulations and guidance formed the bases for the policies currently contained in the Medicare Benefit Policy Manual (MBPM).

Once the IRF PPS FY 2010 rule has been finalized, CMS proposes to rescind HCFAR 85-2-1, and concurrently will revise the policy manual to conform to the final regulatory language that would, in turn, reflect advances in the practice of rehabilitation medicine and changes in Medicare payment policies for IRFs over the past 25 years.

PROPOSED CLARIFICATIONS:  The coverage provisions in the proposed rule recognize that a potential patient’s likely post-admission performance is subject to many factors outside the IRF’s control.  Therefore, these provisions focus on clarifying the key decision points that should be considered and documented when making a decision to admit, retain, or discharge a patient.  A summary of the key proposals follows.

Proposed IRF Admission Requirements:  Because IRFs provide intensive inpatient rehabilitation services, it is important that patients admitted to an IRF be willing and able to participate in the rehabilitation activities offered by the facility.  Therefore, CMS is proposing to require that each candidate for IRF care undergo a comprehensive preadmission screening conducted by a qualified clinician or clinicians designated by a rehabilitation physician (that is, a licensed physician with special training and experience in rehabilitation medicine) no more than 48 hours before admission to the IRF.  Documentation of the screening must be retained in the patient’s medical record.  CMS is proposing to require that the rehabilitation physician review the findings and results of the preadmission screening and document his or her concurrence with them before ordering the IRF admission.   These requirements emphasize the importance of the professional judgment of a rehabilitation physician in reviewing the preadmission screening at the time an admission decision is made.

The preadmission screening should address, at a minimum:

  • Whether the patient’s condition is sufficiently stable to allow the patient to actively participate in an intensive rehabilitation program;
  • Whether the patient at the time of admission has the appropriate therapy needs for placement in an IRF; that is, does the patient need the active and ongoing therapeutic intervention of at least two therapy disciplines (physical therapy, occupational therapy, speech-language pathology, or prosthetics/orthotics therapy), one of which must be physical or occupational therapy;
  • Whether the patient requires the intensive services of an inpatient rehabilitation setting defined in industry standards as at least three hours of therapy per day at least five days per week, and;
  • Whether the patient can be expected to make measurable improvement that will be of practical value to the patient’s functional capacity or adaptation to impairments.


Proposed Post-Admission Requirements:  Because the proposed preadmission screening must be detailed and comprehensive for every patient, CMS intends to revise its policy manual to eliminate the post-admission inpatient assessment.  Instead, CMS is proposing to require in its regulations that promptly after admission, an interdisciplinary care team led by a rehabilitation physician perform a post-admission evaluation to verify that the information obtained during the preadmission screening is still accurate and to develop an overall plan of care designed to meet the individual patient’s needs.  CMS is proposing that the post-admission evaluation occur within 24 hours of admission and that therapy treatments begin within 36 hours after the patient’s admission to the IRF.  This proposal conforms to IRF best practices and helps to ensure that the patient’s care goals can be met. 

The proposed post-admission evaluation, which should be documented in the patient’s medical record, should review the accuracy of the pre-admission screening findings, identify any relevant changes that have occurred since the preadmission screening, and begin developing the patient’s individualized overall plan of care, including the expected course of treatment.  The results of the post-admission evaluation may result in a change from the preadmission conclusion that the patient is appropriate for IRF care.  In such cases, appropriate steps should be taken.

Individualized Overall Plan of Care:  Industry best practices suggest, and CMS agrees, that comprehensive planning of the patient’s course of treatment in the early stages of the stay leads to a more coordinated delivery of services to the patient, and such coordinated care is a critical aspect of the care provided in IRFs.  Although current regulations require such a plan, they do not contain guidance about how an individualized overall plan of care should be developed, what it should address, and how it should be implemented.  Therefore, CMS is proposing to require that an individualized overall plan of care be developed for each IRF admission by a rehabilitation physician with input from the interdisciplinary team within 72 hours of the patient’s admission to the IRF, and be retained in the patient’s medical record.  CMS is also proposing to require that the interdisciplinary team be comprised of professionals from the following disciplines (each of whom have current knowledge of the beneficiary as documented in the medical record):

  • A rehabilitation physician with specialized training and experience in rehabilitation services;
  • A registered nurse with specialized training or experience in rehabilitation;
  • A social worker or a case manager (or both); and
  • A licensed or certified therapist from each therapy discipline involved in treating the patient.


Because the average length of stay for patients in IRFs has declined over the years, CMS is proposing to require that the interdisciplinary team meet at least once a week, rather than once every two weeks to ensure the appropriate establishment and achievement of treatment goals.  CMS is proposing to require that the rehabilitation physician be responsible for the final decisions regarding the patient’s care, and that the physician’s concurrence with the decisions of the group with respect to the overall plan of care be documented in the patient’s medical record. 

Care Plan Implementation:  CMS is also proposing to clarify that patients who need intensive inpatient rehabilitation services should generally be receiving close medical supervision and individual rehabilitation services.  Therefore, CMS is proposing to require that a rehabilitation physician, or other licensed treating physician with specialized training and experience in inpatient rehabilitation, conduct face-to-face visits with the patient a minimum of at least 3 days per week throughout the patient’s stay to assess the patient both medically and functionally, as well as to modify the course of treatment as needed to maximize the patient’s capacity to benefit from the rehabilitation process.  In addition, CMS is clarifying that, in general, rehabilitation therapy services should be provided by one therapist working with one patient, rather than in groups.  Nonetheless, CMS is soliciting comments regarding the use and appropriateness of providing therapeutic services to patients in IRFs in group settings.

Draft Benefit Policy Manual Changes:  Comments on the draft MBPM revisions should be submitted through a link that will be supplied on the CMS Website, rather than through the site used for the submission of comments on proposed regulatory language.  CMS intends to issue final updated MBPM policies concurrently with the issuance of the final IRF PPS rule.

The proposed rule went on display on April 28, 2009 at the Office of the Federal Register’s Public Inspection Desk and will be available under “Special Filings,” at:

CMS will accept comments on the proposed rule until June 29, 2009, and will address all comments on the proposed changes to the regulation in the final rule to be issued by August 1, 2009.

For more information, please see:

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