Late last week, the Centers for Medicare and Medicaid Services (CMS) finalized several Medicare payment rules for providers, which will go into effect on October 1, 2015. Among these was the Final Fiscal Year 2016 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities. This final rule takes into account responses submitted by Kindred Rehabilitation Services, as well as other providers and stakeholders, to the proposed rule issued in April 2015.

Within the final rule, there are several highlights of importance to the provision of rehabilitation hospital services and the future of patient-centered post-acute care. Among these provisions:

• The final rule establishes an overall Medicare update factor of 1.8% to IRFs for fiscal year 2016 – up from the 1.7% included in the April proposed rule.
• The regulation creates an IRF-specific market basket to replace the Rehabilitation, Psychiatric and Long-Term Care (RPL) market base which had previously been used. Kindred specifically supported this measure in comments stating: “Kindred supports the adoption of an IRF-specific market basket, so that the IRF update would more accurately reflect the change in costs for IRFs.”
• Consistent with The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) – which ultimately applies to all Post-Acute Care settings – the final rule adopts IRF measures that satisfy three of the quality domains that will need to be submitted to CMS starting October 1:
o skin integrity and changes in skin integrity (NQF #0678);
o functional status, cognitive function, and changes in function and cognitive function (NQF #2631); and
o incidence of major falls (NQF #0674). IRFs that fail to submit the required quality data to CMS will be subject to a 2 percentage point reduction to their applicable FY annual increase factor.
• Additionally, in its final rule CMS announced it was temporarily suspending their data validation policy in order to “develop a more comprehensive policy that potentially decreases the burden on IRF providers, allows us to establish an estimation of accuracy related to quality data submitted to CMS, and facilitates the alignment of the IRF validation policy with that of other CMS quality reporting programs policies.” Kindred supported this temporary suspension in formal comments so that CMS may improve the process to address concerns including administrative burden, accuracy of data, and alignment with other programs.