Fact Sheets

Proposed Fiscal Year 2020 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities (CMS-1710-P)

Proposed Fiscal Year 2020 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities (CMS-1710-P)


On April 17, 2019, the Centers for Medicare & Medicaid Services (CMS) proposed a rule that would update Medicare payment policies for facilities under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the Inpatient Rehabilitation Quality Reporting Program (IRF QRP) for fiscal year (FY) 2020.

Strengthening Medicare:

We are continuing our efforts towards eventual transition to a unified post-acute care system, through updates to the data used for IRF payments, including revising the case-mix groups (CMGs) and updating the CMG relative weights and average length of stay values and using concurrent FY Inpatient PPS wage index data for the IRF PPS to align wage index data across settings of care.  

This fact sheet discusses major provisions of the proposed rule.  The deadline for submitting comments on the proposed rule is June 17, 2019. The proposed rule (CMS 1710-P) can be downloaded from the Federal Register at:

Proposed Updates to IRF Payment Rates:

For FY 2020, CMS is proposing to update IRF PPS payment rates using the most recent data to reflect an estimated 2.5 percent increase factor (reflecting an IRF-specific market basket estimate of 3.0 percent increase factor, reduced by a 0.5 percentage point multifactor productivity adjustment). CMS is proposing that if more recent data becomes available (for example, a more recent estimate of the market basket or multi-factor productivity adjustment), we would use the more recent estimates to determine the FY 2020 market basket update and multi-factor productivity adjustment in the final rule. Accounting for an additional update to the outlier threshold so that estimated outlier payments remain at 3.0 percent of total payments, CMS projects that IRF payments will increase by 2.3 percent (or $195 million) for FY 2020, relative to payments in FY 2019. CMS believes the updated IRF PPS payment rates, by continuously monitoring and incorporating the latest data, will strengthen Medicare’s relationships with providers and in turn, help to ensure quality care and patient safety.

Proposed Case-Mix Group Revisions (using FY 2017 and FY 2018 data):

In the FY 2019 IRF PPS final rule (83 FR 38514), CMS finalized the removal of the Functional Independence Measure (FIM) items from the IRF patient assessment instrument beginning on October 1, 2019 to reduce regulatory burden for providers. The removal of the FIM items necessitates using different items from the quality indicator section of the IRF patient assessment instrument (quality indicator items) that capture similar information on functional status to classify patients into payment groups. Therefore, we also finalized the use of certain quality indicator data items for payment purposes beginning on October 1, 2019. 

In the FY 2019 final rule, we stated that we would conduct our analysis to revise the case-mix groups using two years of data (FY 2017 and FY 2018) and that we would propose any necessary revisions to the case-mix groups through rulemaking prior to effective date of the use of these quality indicator items on October 1, 2019.  The use of the quality indicator data items requires some minor changes to the payment groups and the associated payments for each group to ensure that payments accurately reflect the costs of caring for patients in each of the updated payment groups. 

For FY 2020, we are proposing to revise the case-mix groups based on two years of data (FY 2017 and FY 2018) from the quality indicator data items and update the relative weights and average length of stay values associated with the revised case-mix groups beginning on October 1, 2019.  We are also proposing to apply a weighting methodology to the motor score that is used to determine the case-mix group assignment for payment purposes, and to remove one item (roll left and right) from the motor score.

Proposal to Rebase and Revise the IRF Market Basket:

We are proposing to rebase and revise the IRF market basket to reflect a 2016 base year.  The proposed 2016-based IRF market basket update for FY 2020 is currently forecasted to be 3.0 percent, which is the same as the FY 2020 update based on the current 2012-based IRF market basket.  The current forecast of the multifactor productivity adjustment for FY 2020 is 0.5 percent. 

The proposed labor-related share will increase from 70.5 percent in FY 2019 to 72.6 percent in FY 2020. 

Ensuring Quality and Safety/Interoperability:

We are proposing 2 new interoperability measures for the IRF rule to implement the final requirements of the IMPACT Act. 

IRF Quality Reporting Program (QRP)

Background: The IRF QRP is authorized by section 1886(j)(7) of the Act and was implemented in FY 2012 IRF PPS final rule. The IRF QRP collects and publishes data on quality measures and collects standardized patient assessment data. IRFs that do not satisfy the requirements of the IRF QRP for a fiscal year receive a two percent reduction to their annual increase factor for discharges for that fiscal year.

Proposed Changes: In this FY 2020 proposed rule, in satisfaction of the IMPACT Act requirement that we implement a quality measure addressing the transfer of health information, CMS is proposing to adopt two new quality.  The two proposed measures are: 1) Transfer of Health Information to the Provider—Post-Acute Care (PAC) Measure; and 2) Transfer of Health Information to the Patient—Post-Acute Care (PAC) Measure. These proposed measures will improve patient safety by ensuring that the patient’s medication list is accurate and complete at the time of transfer or discharge. These two proposed measures also fulfill CMS’s strategic initiatives to promote effective communication and coordination of care, specifically in the Meaningful Measure Initiative areas of the transfer of health information and interoperability. 

In addition, CMS is proposing to adopt a number of standardized patient assessment data elements (SPADEs). These SPADEs will assess cognitive function and mental status, special services, treatments and interventions, medical conditions and comorbidities, impairments, and social determinants of health (race and ethnicity, preferred language and interpreter services, health literacy, transportation, or social isolation). The addition of these SPADEs to the IRF-Patient Assessment Instrument (IRF-PAI) will improve coordination of care and facilitate communication between PAC providers and other members of the healthcare community, which is in alignment with CMS’s strategic initiative to improve interoperability.

CMS is also proposing to update the specifications for the Discharge to Community PAC IRF QRP measure to exclude baseline nursing home residents and to no longer publish a list of compliant IRFs on the IRF QRP website. Also in response to public input, we are proposing to collect standardized patient assessment data and other data required to calculate quality measures using the IRF PAI on all patients, regardless of the patients’ payer.

CMS will accept comments on the proposed rule until June 17, 2019. The proposed IRF PPS rule can be downloaded from the Federal Register at:

It will publish in the April 24, 2019 Federal Register.