The Centers for Medicare & Medicaid Services (CMS) has published its final rule to update the Medicare inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2020. CMS expects IRF PPS payments to increase by $210 million – or 2.5% – relative to FY 2019 payments under the final rule, due to a 2.9% IRF market basket update reduced by a 0.4 percentage point multifactor productivity adjustment. An IRF that does not submit required quality data to CMS would be subject to a 2.0 percentage point decrease in its annual update. CMS finalized its proposal to rebase and revise the IRF market basket to use a 2016 base year, rather than the current 2012 base year. The final FY 2020 standard payment conversion factor is $16,489, compared to $16,021 in FY 2019. The final outlier threshold amount for FY 2020 is $9,300, down from $9,402 for FY 2019.

To align with other post-acute care settings and support the eventual transition to a unified post-acute care system, CMS adopted its proposal to use the concurrent (rather than prior year) FY inpatient prospective payment system wage index beginning with FY 2020. Other policy updates include: revisions to case-mix groups based on FY 2017 and FY 2018 data; updated relative weights and average length of stay values for the revised case-mix groups; revisions to IRF Quality Reporting Program (QRP) measures and standardized patient assessment data elements; and clarification that the determination as to whether a physician qualifies as a “rehabilitation physician” is made by the IRF. After considering public comments, CMS did not adopt its proposal to expand QRP data collection to all patients regardless of payer, but CMS intends to revisit this policy in future rulemaking.