FY2019 Final Rule for IRFs: Small Changes Now, Bigger Ones to Come

Experts warn of challenges for IRFs in FY 2020.

The final rule for fiscal year (FY) 2019 for Inpatient Rehabilitation Facility (IRF) Payment has been published and there are a few changes between the proposed rule and the final one.

What might be of even more interest to IRFs are some updates to the Inpatient Prospective Payment System (IPPS) rules that allow IPPS-excluded hospitals to develop IRF units within those hospitals beginning in FY 2020.

The following provisions would be effective for FY 2019 beginning Oct. 1, 2018:

  • Allows the post-admission physician evaluation to count as one of the face-to-face visits;
  • Allows the rehabilitation physician to conduct the team meeting remotely without any additional documentation requirements; and,
  • Removes the IRF specific admission order requirement to reduce duplicative documentation requirements; however, IRFs need to be aware that an admission order is still required and that the language was removed to eliminate duplication.

From a quality reporting perspective, the rule also removes two quality indicators from the mandated reporting. They are:

  • NQF #1716 related to Methicillin-Resistant Staphylococcus Aureus; and
  • NQF#0680 related to Patient Influenza Vaccinations from the required data collection.

And finally, the final rule updates the Federal Prospective Payment Rates for FY 2019. The Centers for Medicare & Medicaid Services (CMS) estimates an overall increase in IRF PPS payments of 1.3 percent after adjustments which is slightly higher than noted in the proposed rule and results in an increase in the standard payment conversion rate from $15,838 in FY 2018 to $16,052 in 2019.

FY 2020 Changes Will Significantly Impact IRFs

Effective for FY 2020, and beginning Oct. 1, 2019, the rule will remove the FIMtm from the IRF-PAI and incorporate certain data elements from the Quality Indicators section of the IRF-PAI into the case mix classification system to assign patients to a Case Mix Group (CMG). In response to comments received related to the proposed rule, however, CMS noted that, and addition year of data would be incorporated into the analyses used to revise the CMG definitions for FY 2020.

With only one year to prepare for this significant change, IRFs need to evaluate their practices and processes now to assure accuracy in scoring and appropriate capture of the required data.

Impact to IRFs from Other Final Rules

Regulatory changes that impact IRFs were also included in final rules published for other service venues. The following rules also include information that overlaps or relates to IRFs:

  • The FY 2019 final rule for Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Prospective Payment Systems
  • Effective with cost reporting periods beginning on or after October 1, 2019, an IPPS-excluded hospital would be permitted to have an excluded psychiatric and/or rehabilitation unit; and
  • An IPPS-excluded hospital may not have an IPPS-excluded unit of the same type.

This rule would allow LTCHs to have both IRF and psychiatric units, psychiatric hospitals to have IRF units and IRFs to have psychiatric units provided all Conditions of Participation (COP) are met for those services.

What’s the Bottom Line?

  • As we noted in our article when these rules were proposed, the FY 2019 rules include some positive changes related to reduction in paperwork for IRFs and should provide some easing of that work load.
  • The removal of FIM and realignment of payments using functional scores in quality reporting data will further reduce data collection efforts but IRFs need to be certain that staff assessment skills for the GG codes are at a high level.
  • The expansion to allow any IPPS-excluded hospital to develop specialty units presents both opportunities and challenges.

Although the FY 2019 changes are minimal, greater changes are expected in FY 2020.


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Angela Phillips, PT

Angela M. Phillips, PT, is President & Chief Executive Officer of Images & Associates. A graduate of the University of Pennsylvania, School of Allied Health Professions, she has almost 45 years of experience as a consultant, healthcare executive, hospital administrator, educator, and clinician. Ms. Phillips is one of the nation’s leading consultants assisting Inpatient Rehabilitation Facilities in operating effectively under the Medicare Prospective Payment System (PPS) and in addressing key issues related to compliance.

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