Health Law Daily IRFs could see $270M reimbursement increase in FY 2021
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Friday, April 17, 2020

IRFs could see $270M reimbursement increase in FY 2021

By Sheila Lynch-Afryl, J.D., M.A.

CMS proposed updating coverage requirements to allow nonphysician practitioners to perform certain duties required to be performed by a physician.

Payments to inpatient rehabilitation facilities (IRFs) would increase by $270 million in fiscal year (FY) 2021, according to an advance release of the FY 2021 IRF prospective payment system (PPS) proposed rule. The proposed rule will be published in the Federal Register on April 21, 2020, and the deadline for submitting comments is June 15, 2020. CMS noted that, in light of the COVID-19 pandemic and providers’ limited capacity to review and comment on extensive proposals, the annual rulemaking was limited to "essential policies."

Payment update. CMS proposed, pursuant to Soc. Sec. Act §1886(j), a FY 2021 IRF update of 2.5 percent (2.9 percent market basket update, less 0.4 percentage point productivity adjustment mandated by section 3401(d) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148)). CMS would also update the outlier threshold amount to $8,102 to maintain estimated outlier payments at approximately 3 percent of total estimated aggregate IRF payments for FY 2021.

IRF coverage requirements. CMS proposed to update the IRF coverage requirements to: (1) remove the post-admission physician evaluation requirement at 42 C.F.R. §412.622(a)(4)(ii); (2) codify existing documentation instructions and guidance at 42 C.F.R. §412.622(a)(4)(i)(B) and (D); and (3) allow nonphysician practitioners to perform certain functions that currently must be performed by a rehabilitation physician. The proposed rule also solicited comments on removing some preadmission screening documentation requirements.

Wage index. The proposed rule implemented changes made by Office of Management and Budget (OMB) Bulletin No. 18-04 to statistical area delineations, including new core-based statistical areas (CBSAs), urban counties that would become rural, rural counties that would become urban, and existing CBSAs that would be separated. For FY 2021, IRFs that experience negative impacts due to this implementation would be subject to a 5 percent cap on the decrease in their wage index versus FY 2020. No cap would be applied in FY 2022.

IRF Quality Reporting Program. CMS did not propose any changes to the IRF Quality Reporting Program.

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