FY 2023 inpatient rehabilitation facility PPS final rule ushers in updated Medicare policies that will yield higher payments

Inpatient rehabilitation facilities (IRF) will see updated Medicare payment policies thanks to the FY 2023 IRF final rulethat the Centers for Medicare & Medicaid Services (CMS) released on July 27, 2022. A copy of the rule was published in the Federal Register on August 1, 2022. The rule takes effect on October 1, 2022. Looking for some highlights? You’ve come to the right place. Consider the following:

1. CMS will update the IRF prospective payment system (PPS) payment rates by 3.9%. However, an adjustment to the outlier threshold means IRFs will see a 0.6 percentage point decrease in outlier payments. The result? IRF payments will increase by 3.2% or $275 million relative to FY 2022.
2. CMS will finalize a permanent 5% cap on annual wage index decreases.
3. CMS will codify the IRF teaching status adjustment policy that adjusts payments to reflect the higher costs of teaching IRFs.
4. CMS will finalize a policy to expand IRF quality data reporting requirements. More specifically, IRFs will begin collecting data on all patients regardless of payer—not just admitted IRF patients with Medicare Part A fee-for-service and Medicare Part C. This expanded quality reporting requirement will take effect starting with the FY 2026 IRF Quality Reporting Program, meaning that providers will need to start collecting the IRF- PAI assessment on all patients receiving care in an IRF, regardless of payer, beginning on October 1, 2024.

How to prepare

Review the rule to understand how these payment policies might affect your IRF both operationally and financially. Still have questions? Contact Rivet Health Law, PLC for more information.