CMS proposed rule would lower payments to inpatient rehab facilities

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The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would affect Medicare payments for intensive rehabilitation services provided by inpatient rehabilitation facilities (IRFs).

CMS said it plans to recalculate the rates using more recent information from rehabilitation hospitals about the costs they have incurred in treating patients.

Due to statutory requirements in the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA), CMS will apply a zero percent increase factor for IRF payment rates for FY 2009. As a result, CMS said it expects to spend roughly $5.6 billion in FY 2009 and approximately $30 billion in the next five years for IRF services.

The facilities—which treat people who have had serious illnesses and injuries, such as stroke or spinal cord injuries—receive higher payments than other facilities because the patients require more intensive and coordinated rehabilitation therapy services.

There are currently more than 1,200 facilities that are paid as IRFs.

By improving the accuracy of payments for the services, CMS said it is moving closer to meeting its goal of transforming Medicare to a prudent purchaser of quality healthcare services.

At the same time, the proposed rule would implement provisions in the MMSEA by implementing policies for FY 2009 that include requiring that 60 percent of a facility’s patient population have one of 13 specified qualifying conditions and allowing facilities to count patients whose principal reason for needing inpatient rehabilitation services is not one of the specified conditions, but whose treatment is complicated by the presence of one of the 13 conditions as a secondary diagnosis.

CMS will accept comments from the public on the proposed rule until June 20, and will respond to the comments in a final rule to be published on or before Aug. 1.