Inpatient rehabilitation facilities get a 2.6% payment increase in 2026 based on a final rule released by the Centers for Medicare and Medicaid Services.
The rate reflects a 3.3% market basket update, offset by a 0.7-percentage-point productivity adjustment.
The rule also includes an updated outlier threshold to maintain outlier payments at 3% of total payments.
It also includes annual updates to the prospective payment rates, wage index, case-mix group relative weights and average length-of-stay values.
CMS estimates these updates will result in an overall increase of $340 million in aggregate payments for 2026.
CMS issued the final rule to update Medicare payment policies and rates under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) and the IRF Quality Reporting Program (QRP) for 2026.
Updates to Quality Reporting
The quality reporting program is a pay-for-reporting program. IRFs that do not meet reporting requirements are subject to a 2-percentage-point reduction in their Annual Increase Factor, CMS said.
CMS is finalizing the removal of two quality measures as well as future public reporting associated with these measures, the removal of four Social Determinant of Health (SDOH) standardized patient assessment data elements, and the amendment of the reconsideration policy and process.
CMS is finalizing its proposal to remove two measures beginning with FY 2026: the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure, and starting in 2028, the COVID-19 Vaccine Percent of Patients/Residents Who Are Up to Date measure.
The COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure will not be removed from the IRF patient assessment instrument until Oct. 1, 2026, because it is not technically feasible to do so any earlier, CMS said. The submission of data on this measure will be optional, beginning Oct. 1, and no IRF will be penalized if they do not submit data on this measure after that time.
CMS is finalizing its proposal to remove four SDOH standardized patient assessment data elements to reduce burden. Data submission on one item for Living Situation (R0310); two items for Food (R0320A and R0320B); and one item for Utilities (R0330) will be removed starting in 2028, beginning with patients admitted on or after Oct. 1, 2026.
CMS is finalizing its proposal to amend the reconsideration policy and process for an IRF to appeal a determination of noncompliance with IRF QRP requirements.
CMS received feedback on four RFIs: future measure on the topics of interoperability, nutrition, delirium and well-being; potential revisions to the IRF-Patient Assessment Instrument (IRF-PAI), which will allow CMS to reduce burden; potential revisions to the data submission deadlines for assessment data, which will allow CMS to provide IRFs with more timely quality data; and advancing digital quality measurement to seek feedback on current adoption of health information technology and standards, including Fast Healthcare Interoperability Resources (FHIR).
CMS continues to seek public input on approaches and opportunities to streamline regulations and reduce burdens on those participating in the Medicare program through a standalone RFI available at https://www.cms.gov/medicare-regulatory-relief-rfi.
Comments on this RFI are due by Sept. 15.
Email the writer: SMorse@himss.org