Inpatient Rehab Facilities See Modest Payment Boost

CMS streamlines IRF Quality Reporting, Drops COVID-19 Measures & Seeks Further Burden Reduction

Washington D.C. – The Centers for Medicare & Medicaid Services (CMS) is enacting important changes to the Inpatient Rehabilitation Facility (IRF) Quality Reporting program (QRP), aiming to reduce administrative burden and refocus quality measurement efforts.Key updates finalized by CMS include the removal of several COVID-19 related measures and standardized data elements, alongside revisions to the reconsideration process for compliance determinations.

Beginning Fiscal Year 2026, the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure will be eliminated. Further, the COVID-19 Vaccine Percent of Patients/Residents Who Are Up to date measure will cease to be required starting in 2028, though optional data submission begins October 1, 2026, with no penalties applied for non-compliance after that date.CMS cited technical feasibility concerns as the reason for the phased removal of the patient-facing vaccine measure.

In a move designed to significantly lessen data collection demands, CMS will also remove four Social Determinants of Health (SDOH) data elements from the IRF Patient Assessment Instrument (IRF-PAI) starting in 2028, impacting assessments for patients admitted on or after October 1, 2026.The removed elements cover Living Situation (R0310), Food Security (R0320A & R0320B), and Utilities access (R0330).

These changes reflect a growing recognition of the challenges IRFs face in collecting and submitting comprehensive data, particularly regarding SDOH factors. While SDOH are undeniably crucial to holistic patient care, CMS acknowledges the need to balance data collection with practical operational realities.

CMS is also refining the process for IRFs to appeal non-compliance findings related to QRP requirements, offering a more streamlined reconsideration pathway.

Looking Ahead: CMS Probes Interoperability, Nutrition, and Digital Quality

Beyond these immediate changes, CMS is actively exploring future quality measurement priorities. the agency recently issued Requests for Details (RFIs) focusing on:

Interoperability: Exploring measures leveraging data exchange standards like FHIR (Fast Healthcare interoperability Resources).
Nutrition: Identifying potential metrics to assess the quality of nutritional care in IRFs.
Delirium: Investigating ways to better measure and manage delirium in the rehabilitation setting.
Patient Well-being: Developing measures to capture a more comprehensive view of patient outcomes beyond clinical metrics.
IRF-PAI Revisions: seeking input on potential modifications to the assessment instrument to further reduce burden.
Data Submission Deadlines: Evaluating opportunities to provide IRFs with more timely quality data.
Digital Quality Measurement: Assessing the current adoption of health information technology and standards.

CMS is actively soliciting public feedback on regulatory streamlining and burden reduction through a dedicated RFI, available at https://www.cms.gov/medicare-regulatory-relief-rfi. Comments are due by September 15th.

Evergreen Implications for IRFs:

These changes signal a broader trend within CMS towards a more pragmatic approach to quality reporting. IRFs should proactively:

Review and update data collection processes: Prepare for the removal of the specified measures and data elements. Engage with CMS RFIs: Provide thoughtful feedback to shape future quality measurement initiatives.
Invest in interoperability: Explore technologies and workflows that facilitate seamless data exchange.
* Prioritize SDOH integration: Continue to address SDOH needs within patient care plans,even as formal reporting requirements evolve.

What specific refinements to the Patient Driven Payment Model (PDPM) are contributing to more accurate reimbursements?

Understanding the Recent Reimbursement Changes

Recent shifts in healthcare policy and payer strategies have resulted in a modest, but meaningful, increase in payments to inpatient rehabilitation facilities. this boost, while not a dramatic overhaul, offers a much-needed reprieve for facilities grappling with rising operational costs and evolving patient needs. The changes primarily stem from adjustments to the medicare payment system, influencing commercial insurance reimbursements as well. Key terms driving this shift include rehabilitation therapy, skilled nursing facilities (SNFs), and post-acute care.

Medicare’s Role in the Payment Increase

Medicare, the largest single payer for rehabilitation services, implemented several key changes impacting facility revenue:

Patient Driven Payment Model (PDPM) Refinements: While PDPM has been in effect for several years, ongoing refinements to the case-mix classification system are better reflecting the complexity of patient needs, leading to more accurate reimbursement rates. This impacts physical therapy, occupational therapy, and speech therapy reimbursements.

Increased Focus on Functional Outcomes: Medicare is increasingly emphasizing functional outcomes as a measure of quality and value.Facilities demonstrating improved patient function recieve favorable consideration during audits and potential value-based payment adjustments. This pushes facilities to invest in robust outcome measurement systems.

Temporary Payment Adjustments: In response to inflationary pressures and workforce shortages, temporary payment adjustments were implemented to help facilities maintain access to care. These adjustments, while temporary, provide immediate financial relief.

Impact on Different Types of Inpatient Rehab Facilities

The payment boost isn’t uniform across all inpatient rehab centers. The impact varies based on facility type and patient demographics.

Long-Term Acute Care Hospitals (LTACs): LTACs, which frequently enough treat patients with complex medical needs requiring extended rehabilitation, have seen a moderate increase due to the PDPM refinements.

Inpatient Rehabilitation Hospitals (IRFs): IRFs, focused on intensive rehabilitation therapy, are benefiting from the emphasis on functional outcomes and the increased valuation of complex rehabilitation cases. IRF payment models are particularly sensitive to patient severity.

Hospital-Based rehabilitation Units: These units, integrated within larger hospitals, are experiencing similar benefits, though their reimbursement structures can be more complex due to hospital-wide contracts.

The Role of Case Mix and Patient Severity

A critical factor determining the extent of the payment boost is the case mix index (CMI) of the facility. Facilities treating patients with higher levels of complexity and functional impairment receive higher reimbursement rates. This incentivizes facilities to specialize in treating specific conditions, such as:

Stroke Rehabilitation

Spinal Cord Injury Rehabilitation

traumatic Brain injury (TBI) Rehabilitation

Amputation Rehabilitation

* Joint Replacement Rehabilitation

navigating the Changing Reimbursement Landscape: Practical Tips

For rehabilitation facility administrators and financial officers, proactively adapting to these changes is crucial.

1. Invest in Data Analytics: Robust data analytics are essential for accurately tracking patient outcomes, identifying areas for improvement, and maximizing reimbursement potential. Focus on quality reporting and data-driven decision making.
2. Optimize Documentation: Detailed and accurate documentation of patient needs, therapy interventions, and functional progress is paramount. Ensure compliance with all coding and billing regulations. Medical coding accuracy is vital.
3. Focus on Value-Based Care: Demonstrate a commitment to value-based care by actively measuring and reporting patient outcomes. Participate in value-based payment programs when available.
4. Staff Training: Invest in ongoing training for clinical and administrative staff to ensure they are up-to-date on the latest reimbursement guidelines and best practices.
5. Revenue Cycle Management: Streamline revenue cycle management processes to minimize denials and accelerate payments. Consider outsourcing to specialized revenue cycle management companies.

Real-World Example: Sunrise Rehabilitation Center

Sunrise Rehabilitation Center, a 120-bed IRF in Phoenix, Arizona, implemented a new outcome measurement system in early 2024. By tracking and reporting functional gains using standardized assessments, they were able to demonstrate improved patient outcomes to Medicare. This resulted in a 3% increase in their overall reimbursement rate within six months. Their success highlights the importance of proactive data collection and reporting.

The Future of Inpatient Rehab Payments

While the current payment boost is welcome news, the long-term outlook remains uncertain.Continued pressure to control healthcare costs and the ongoing evolution of value-based care models will likely drive further changes in the reimbursement landscape. Facilities that prioritize data analytics, outcome measurement, and efficient operations will be best positioned to thrive in this evolving surroundings. Staying informed about healthcare policy updates and reimbursement changes is critical for long-term financial stability.