Health Reform WK-EDGE $145M payment increase for rehab facilities in 2017
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Wednesday, August 17, 2016

$145M payment increase for rehab facilities in 2017

By Anthony H. Nguyen, J.D.

Inpatient rehabilitation facilities (IRF) will receive a net $145 million (1.9 percent) increase in payments under the IRF prospective payment system (PPS) for fiscal year (FY) 2017. The increase does not include the implementation of a required 2-percentage-point reduction of the market basket increase factor for any IRF that fails to meet the IRF quality reporting requirements. In a Final rule effective October 1, 2016, CMS also added four claims-based measures for FY 2018 and beyond to the quality reporting program (QRP) (Final rule, 81 FR 52056, August 5, 2016).

Payment updates. IRF PPS payments for FY 2017 will reflect a 1.65 percent increase factor, which is derived from an IRF-specific market basket estimate of 2.7 percent, reduced by a 0.3 percentage point multi-factor productivity adjustment and a 0.75 percentage point reduction required by law). An additional approximate 0.3 percent increase to aggregate payments due to updating the outlier threshold results in an overall estimated update of approximately 1.9 percent (or $145 million), relative to payments in FY 2016 (see CMS proposes IRF payment, quality reporting measure updates, April 27, 2016). An additional 0.3 percent increase to aggregate payments due to updating the outlier threshold results in an overall update of approximately $145 million, relative to payments in FY 2016.

Quality reporting. The Final rule adds various measures beginning in FY 2018 and subsequent years to meet the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT) requirements regarding resource use, medication reconciliation, and other domains. IMPACT added Section 1899B to the Social Security Act requiring IRFs report data on measures that satisfy specific measure domains, which must be aligned with measures implemented for long-term care hospitals (LTCH), IRFs, skilled nursing facilities (SNF), and home health agencies (HHAs).

IRFs that fail to submit the required quality data to CMS will be subject to a 2 percentage point reduction to their applicable FY annual increase factor as required under Section 3004(b) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

CMS will begin reporting IFR quality data publicly in the fall of 2016.

For Wolters Kluwer’s full analysis of the Final rule, see Rehab facilities net $145M payment increase, quality measures in 2017, August 3, 2016.

FederalRegisterIssuances: FinalRules AgencyNews InpatientFacilityNews MedicarePartANews MedicarePartCNews QualityNews NewsFeed

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