CMS has published a proposed rule to establish FY 2018 Medicare prospective payment system (PPS) rates for inpatient rehabilitation facility (IRF) services. CMS estimates that IRF PPS payments would increase by 1.0% overall ($80 million) under the proposed rule compared to FY 2017 levels. As mandated by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), CMS proposes a 1.0% increase factor for FY 2018, although an IRF that does not submit required quality data to CMS is subject to a 2.0 percentage point decrease in its annual update. The proposed FY 2018 standard payment conversion factor is $15,835, up from $15,708 in FY 2017. The proposed fixed-loss amount for high cost outlier cases is $8,656, compared to $7,984 in FY 2017. CMS also proposes updates to the IRF wage index and case-mix group relative weights in a budget-neutral manner. As in FY 2017, CMS is not proposing changes to facility-level adjustment factors; CMS will continue to monitor the effects of FY 2014 adjustments.

CMS proposes a number of refinements to how facilities demonstrate compliance with the patient classification requirement that at least 60% of a facility’s patient population have one of 13 qualifying conditions. Specifically, CMS proposes to revise the lists of ICD–10–CM diagnosis codes that are used to determine presumptive compliance and provide for automatic annual updates to presumptive methodology diagnosis code lists. CMS also solicits public comments on the 60% rule, including the list of conditions, to assist CMS “in generating ideas and information for analyzing refinements and updates to the criteria used to classify facilities for payment under the IRF PPS.”

Furthermore, CMS proposes to make a number of changes to the IRF PAI and eliminate the 25% payment penalty that applies to late IRF patient assessment instrument (IRF-PAI) submissions. In addition, CMS proposes revisions to the quality measures under the IRF quality reporting program.

Finally, as in other recent proposed Medicare payment rules, CMS invites suggestions for ways CMS can improve the health care delivery system and decrease burdens on providers and patients.

The proposed rule was published on May 3, 2017; the comment deadline is June 26, 2017.