Health Reform WK-EDGE IRFs to see $105 million increase in reimbursement for FY 2019
Tuesday, August 14, 2018

IRFs to see $105 million increase in reimbursement for FY 2019

By Sheila Lynch-Afryl, J.D., M.A.

Inpatient rehabilitation facilities (IRFs) will receive a $105 million payment increase under the IRF prospective payment system (PPS) for fiscal year (FY) 2019, according to a Final rule. The rule also updated IRF coverage requirements and added a measure removal factor for the IRF Quality Reporting Program (QRP) (Final rule, 83 FR 38514, August 6, 2018).

FY 2019 payment update. Pursuant to Soc. Sec. Act §1886(j)(3)(C), the increase factor for FY 2019, after the application of the productivity adjustment and "other" adjustment (see Sec. 3401(d) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148)), will be 1.35 percent. An additional .1 percent decrease to aggregate payments due to updating the outlier threshold resulted in an overall estimated update for FY 2019 of approximately 1.3 percent relative to payments in FY 2018 (see $75M increase for IRFs in FY 2018, August 1, 2017).

A case qualifies for an outlier payment if the estimated cost of the case exceeds the adjusted outlier threshold. CMS updated the outlier threshold amount from $8,679 for FY 2018 to $9,402 for FY 2019 (lower than the proposed $10,509—see CMS proposes $75M increase for IRF reimbursement in FY 2019, May 8, 2018) to maintain estimated outlier payments at approximately 3 percent of total estimated aggregate IRF payments for FY 2019. CMS finalized the national average urban cost-to-charge ratio (CCR) at 0.412, the national average rural CCR at 0.515, and the national average CCR ceiling at 1.32 for FY 2019.

For FY 2019, CMS will continue to hold facility adjustment factors at the FY 2014 levels as it continues to monitor the most current IRF claims data available.

IRF-PAI. Soc. Sec. Act Sec. 1886(j)(2)(D) requires IRFs to complete the IRF Patient Assessment Instrument (IRF-PAI) upon admission and discharge for all Medicare Part A fee-for-service and Medicare Advantage beneficiaries. Data collected in the IRF-PAI is used to classify patients into distinct payment groups based on clinical characteristics and expected resource needs and to monitor the quality of care furnished in IRFs. CMS removed the Functional Independence Measure instrument (item 39) and associated Function Modifiers (items 29 through 38) from the IRF-PAI beginning in FY 2020 because they overlap with data items in the Quality Indicators section of the IRF-PAI.

CMS also finalized the following policies: (1) incorporating certain data items from the Quality Indicators section of the IRF-PAI into the IRF case-mix classification system for payment purposes beginning in FY 2020; (2) updating the IRF-PAI score reassignment methodology; and (3) using case-mix groups based on the data items from the Quality Indicators section of the IRF-PAI to classify IRF patients for purposes of establishing payment under the IRF PPS beginning with FY 2020.

Coverage requirements. To reduce redundancy and regulatory burden, the Final rule amended 42 C.F.R. §412.622(a)(3)(iv) to provide, beginning in FY 2019, that the post-admission physician evaluation required under 42 C.F.R. §412.622(a)(4)(ii) may count as one of the face-to-face physician visits required under §412.622(a)(3)(iv). In addition, it amended newly redesignated 42 C.F.R. §412.622(a)(5)(i) (formerly §412.622(a)(5)(A)) to provide that the rehabilitation physician may lead the interdisciplinary team meeting remotely using modes of communication such as video or telephone conferencing. CMS also removed the admission order documentation requirement at 42 C.F.R. §412.606(a) since IRFs are already required to fulfill this requirement under sections 482.12(c)482.24(c), and 412.3.

IRF QRP. Pursuant to Section 3004(b) of the ACA, IRFs that fail to submit data on specified quality measures under the IRF QRP receive a 2.0 percent reduction in their fee schedule increase factor. CMS removed two measures from the IRF QRP measure set: (1) beginning with the FY 2020 IRF QRP, National Healthcare Safety Network (NHSN) Facility-wide Inpatient Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716; and (2) beginning with the FY 2021 IRF QRP, Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680).

The Final rule codified at 42 C.F.R. §412.634(b)(2) the factors CMS considers when evaluating measures for removal from the IRF QRP measure set. It also added a factor that allows removal when the costs associated with a measure outweigh the benefit of its continued use in the program.

42 C.F.R. §412.634(d)(1) currently provides that IRFs found to be noncompliant with the quality reporting requirements for a particular fiscal year will receive a letter of non-compliance through both the Quality Improvement and Evaluation System Assessment Submission and Processing (QIES-ASAP) system and the U.S. Postal Service. The Final rule expand the methods by which CMS can notify an IRF of non-compliance: (1) the QIES ASAP system; (2) the U.S. Postal Service; or (3) an email from the Medicare administrative contractor. CMS will notify IRFs in writing of its final decision regarding any reconsideration request using the same notification process.

In addition, pursuant to Soc. Sec. Act §1886(j)(7)(E), CMS will make the following IRF QRP data available to the public in calendar year 2020: (1) Change in Self-Care (NQF #2633); (2) Change in Mobility (NQF #2634); (3) Discharge Self-Care Score (NQF #2635); (4) and Discharge Mobility Score (NQF #2636).

FederalRegisterIssuances: FinalRules AgencyNews GeneralNews InpatientFacilityNews MedicarePartANews MedicarePartCNews ProviderPaymentNews QualityNews FedTracker HealthCare

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