CMS Releases Proposed Inpatient Rehabilitation Payment Rule for Fiscal Year 2009

On April 21, 2008, the Centers for Medicare & Medicaid Services (CMS) issued a Press Release announcing the release of a display copy of a proposed rule (Proposed Rule) that would update the prospective payment rates for inpatient rehabilitation facilities (IRF) for fiscal year (FY) 2009. In brief, the proposed changes include:

• CMG Relative Weights.  The current case mix group (CMG) relative weights are based on FY 2003 data.  For FY 2009, CMS proposes to update the CMG relative weights and average length of stay values using FY 2006 data. 
• Outlier Threshold.  For FY 2009, CMS proposes an outlier threshold of $9,191, which is estimated to maintain outlier payments equal to 3.0 percent of the total estimated payments for FY 2009.
• Wage Index Adjustment. To determine FY 2009 rates, CMS proposes to continue using the pre-reclassification and pre-floor hospital wage indexes. 
• Policy Clarifications. In the Proposed Rule, CMS also seeks to clarify policies regarding "New England deemed counties" and multi-campus hospitals to be consistent with IPPS and other post acute care settings.  CMS will update the IRF wage index tables based on the OMB bulletins used to update the hospital wage data.
  
• MMSEA. The Proposed Rule would implement aspects of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) by setting the compliance percentage at 60 percent for cost reporting periods beginning on or after July 1, 2006 and by continuing to count comorbidities when determining IRF compliance with the threshold. CMS would also update the IRF payment rates by 0 percent for FY 2009.

According to CMS, the Proposed Rule is expected to result in a decrease in aggregate IRF payments of $20 million for FY 2009.  The Proposed Rule is scheduled to be published in the Federal Register on April 25, 2008.  CMS expects to publish a final rule on or before August 1, 2008.