CMS has finalized Medicare prospective payment system (PPS) rates for inpatient rehabilitation facility (IRF) services for fiscal year (FY) 2018, which begins October 1, 2017. CMS estimates that IRF PPS payments will increase by 0.9% overall ($75 million) under the final rule compared to FY 2017 levels. As mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), CMS adopted a 1.0% increase factor for FY 2018 (note that an IRF that does not submit required quality data is subject to a 2.0 percentage point decrease in its annual update). The final FY 2018 standard payment conversion factor is $15,838, compared to $15,708 for FY 2017. The final FY 2018 outlier threshold for high-cost cases is $8,679, compared to $7,984 in FY 2017 (which has the effect of decreasing aggregate payments by about 0.1%). CMS also updated the IRF wage index and case-mix group relative weights in a budget-neutral manner. CMS did not revise facility-level adjustment factors; CMS will continue to monitor the effects of FY 2014 adjustments.

In the final rule, CMS revised the lists of ICD–10–CM diagnosis codes that are used to determine presumptive compliance with the patient classification requirement that at least 60% of a facility’s patient population have one of 13 qualifying conditions. In addition, CMS adopted its proposed subregulatory process for adopting changes to the ICD–10–CM medical code data set for the presumptive methodology lists. CMS also summarized responses to its solicitation of comments on potential reforms to the 60% rule, which CMS intends to consider as it explores “ways to modernize the Medicare program.”

Furthermore, CMS adopted its proposal to eliminate the 25% payment penalty that applies to late IRF patient assessment instrument (IRF-PAI) submissions and remove the voluntary swallowing status item from the IRF PAI. CMS also revised and updated quality measures and reporting requirements under the IRF quality reporting program.