On July 31, 2009, CMS released its final Medicare IRF PPS update for FY 2010, which includes both payment updates and new coverage criteria. Specifically, the final rule provides a 2.5% MBI increase, which is estimated to increase payments by $145 million compared to 2009 levels, along with adjustments to the relative weights, outlier threshold, wage index, and facility level-adjustments. The standard federal rate for FY 2010 is set at $13,661, an increase from $12,958 in FY 2009. CMS also has adopted new coverage criteria, including requirements for preadmission screening, post-admission evaluations, and individualized treatment planning that emphasize the role of physicians in ordering and overseeing beneficiaries’ IRF care. Among other things, the rule requires IRF services to be ordered by a rehabilitation physician with specialized training and experience in rehabilitation services and be coordinated by an interdisciplinary team meeting the rule’s specifications. The interdisciplinary team must meet weekly to review the patient’s progress and make any needed adjustments to the individualized plan of care. IRFs must use qualified personnel to provide required rehabilitation nursing, physical therapy, occupational therapy, speech-language pathology, social services, psychological services, and prosthetic and orthotic services (CMS notes that it also is considering adopting specific standards on the use of group therapies at a future date). The rule also includes new documentation requirements, including a requirement that IRFs submit patient assessment data on Medicare Advantage patients. Note that while the final rule’s payment rate updates are effective for IRF discharges on or after October 1, 2009, CMS has adopted a January 1, 2010 effective date for the new coverage requirements to provide facilities more time to adapt their practices to comply with the new framework. In response to public comments, CMS also is moving these new coverage requirements to a new section of the Code of Federal Regulations to clarify that they do not change the criteria for determining whether a facility meets the “60 percent rule” for purposes of qualifying for payment under the IRF PPS. Under that rule, at least 60 percent of a facility’s patients in a year must have at least one of 13 specified conditions as the principal admitting diagnosis, or as a secondary diagnosis that requires an IRF level of care. The new coverage criteria will be used to determine whether individual claims are for reasonable and necessary services payable by Medicare. Companion changes to IRF-PPS policy also will be made through revisions to the Medicare Benefit Policy Manual. The official version of the rule is scheduled to be published on August 7, 2009.