On March 27, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for Inpatient Rehabilitation Facilities (IRFs) that would update payment policies for the 2025 fiscal year (FY) and add four new items as Standardized Patient Assessment Data elements, modify an additional item, and remove the Admission Class item from the IRF-PAI (Patient Assessment Instrument).
Additionally, CMS is proposing a three-year phaseout of the rural adjustment for IRFs changing from rural to urban, as a result of the proposed revised Office of Management and Budget (OMB) market area delineations.
The proposed rule, to be formally published in the Code of Federal Regulations (CFR) as of March 29, also requests information related to IRF QRP (Quality Reporting Program) quality measures and concepts, as well as the IRF QRP Star Rating system.
The major components are addressed below:
The proposed policy changes, consistent with prior years, include:
Following standard methodology, CMS has recommended a $255 million increase in IRF payments over the last FY. CMS also proposes an update to IRF payment by 2.8 percent, based on the proposed IRF market basket update of 3.2 percent, less a proposed 0.4-percent productivity adjustment. The result is a proposed Standard Payment Rate for FY 2025 of $18,872.
Table 10 of the proposed rule illustrates the calculations:
CMS is also proposing to collect four new items as part of the Standardized Patient Assessment under the Social Determinants of Health (SDoH) category. These items would be added to FY 2028 IRF QRP and include one item related to living situation, two items related to food, and a final item related to utilities.
The proposed Living Situation item asks:
“What is your living situation today?” The proposed response options are: (1) I have a steady place to live; (2) I have a place to live today, but I am worried about losing it in the future; (3) I do not have a steady place to live; (4) Patient declines to respond; and (5) Patient unable to respond.
The proposed Food items are:
“Within the past 12 months, were you worried that your food would run out before you got money to buy more?”
“Within the past 12 months, did the food you bought just not last, and you didn’t have money to get more?”
The proposed response options for both of these items are: (1) Often true; (2) Sometimes true; (3) Never True; (4) Patient declines to respond; and (5) Patient unable to respond.
The proposed Utilities item asks:
“In the past 12 months, has the electric, gas, oil, or water company threatened to shut off services in your home?” The proposed response options are: (1) Yes; (2) No; (3) Already shut off; (4) Patient declines to respond; and (5) Patient unable to respond.
Additionally, CMS proposes to modify the Transportation Item to align it with the Accountable Health Communities (AHC) Health-Related Social Needs (HRSN) Screening Tool for SDoH. The current question in Item A1250, Transportation, currently collected in the IRF-PAI asks: “Has lack of transportation kept you from medical appointments, meetings, work, or from getting things needed for daily living?” This item would be modified to revise the lookback period to include “in the last 12 months” and would simplify the response options to (1) Yes; (2) No; (3) Patient declines to respond; and (4) Patient unable to respond.
This modification would also be added to the FY 2028 IRF QRP data.
As admission class is not currently used in any calculations of quality measures, so CMS proposes to remove the item from the IRF-PAI, effective Oct. 1, 2026.
In the proposed rule, CMS also requests feedback on two areas:
Readers can access the associated CMS Fact Sheet here.
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