The Centers for Medicare and Medicaid Services has issued a proposed rule to update payment rates and clarify the framework for Medicare patient selection and care in inpatient rehabilitation facilities during fiscal year 2010.
The rule would apply to more than 200 freestanding IRFs and more than 1,000 IRF units in acute care hospitals and would be effective for discharges occurring on or after Oct. 1, 2009.
The patient selection and care provisions are intended to ensure that Medicare beneficiaries who need the intensive rehabilitation services provided in IRFs continue to have access to high quality care.
“CMS is proposing updates to the current IRF coverage criteria that would better reflect industry-wide best practices and improve understanding and consistency of medical necessity guidelines,” said CMS Acting Administrator Charlene Frizzera. “The proposed policies were developed by CMS, working closely with the National Institutes of Health and medical directors from several fiscal intermediaries and taking into account input from the rehabilitation community.”
CMS is also posting draft revisions to the Medicare Benefit Policy Manual for public comment. The proposals would create a framework that incorporates current best practices in rehabilitative medicine while promoting more efficient and focused medical review by Medicare’s fiscal intermediaries and administrative contractors.
The proposed revisions would clarify requirements for preadmission screening to determine whether a patient should receive rehabilitation services in an IRF or in another, less-intensive setting, as well as post-admission treatment planning and ongoing care coordination throughout the inpatient stay.
Since 2002, Medicare has paid rehabilitation hospitals and rehabilitation units in acute care hospitals for inpatient stays under the IRF prospective payment system (PPS). Under the IRF PPS, the patient is classified into a case-mix group (CMG) taking into account overall physical and cognitive status. Medicare makes a single payment to the IRF based on the CMG assignment. In rare cases, Medicare will make an additional payment, called an outlier payment, to the facility when the costs of treating an individual patient are much higher than the payment for the CMG.
The payment rates set by the IRF PPS for rehabilitation therapy services are higher than would be paid for services in other settings, such as hospital outpatient departments, skilled nursing facilities or the home health setting. This is because these patients have more severe and complex medical conditions that need more intensive and coordinated rehabilitation services. A major reason for updating the coverage policies is to help IRFs select appropriate patients who need the comprehensive and more costly rehabilitation services furnished in the IRF setting.
To be paid under the IRF PPS, a facility must demonstrate on an annual basis that at least 60 percent of its total patient population had either a principal or secondary diagnosis that falls within one or more of the qualifying conditions designated in the regulations governing IRFs.
In other provisions, CMS projects that the payment rate update for IRFs will be 2.4 percent in FY 2010, based on the Rehabilitation, Psychiatric and Long-term Care (RPL) market basket, and that, if finalized as proposed, the market basket update would increase total payments to IRFs in FY 2010 by $140 million.
The RPL market basket was developed to measure the rate of inflation for the resources used in treating the specific types of patients served by these facilities. Also, CMS is proposing to set the outlier threshold for FY 2010 at $9,976, the amount estimated to maintain estimated outlier payments equal to 3 percent of total estimated payments under the IRF PPS for FY 2010. The change to the outlier threshold would increase overall IRF payments by $10 million. The total increase in IRF payments under this proposed rule is $150 million.
For facility and patient-level adjustments, which would not increase total IRF payments, the proposed rule would:
- Update the CMG relative weights and average length of stay values using FY 2007 data, which reflect recent changes in IRF patient populations resulting from the 60 percent rule and medical review activities.
- Use the pre-reclassified and pre-floor hospital wage data to determine the proposed FY 2010 rates.
- Update the rural, low-income patient (LIP), and teaching status adjustment factors using the most recent three years of data (FYs 2005 through 2007).
CMS will accept comments on the proposed rule until June 29, 2009, and will address all comments in a final rule to be issued by Aug. 1, 2009.