The 2009 inpatient rehabilitation facilities (IRF) prospective payment system relative weights and average length of stay values have been adjusted with the most current Medicare claims and cost report data to improve the accuracy of payment for services furnished to people with Medicare who need the intensive rehabilitation services provided by IRFs. There are currently more than 1,200 such facilities.
Changes announced in the 2009 Final rule will make it possible for beneficiaries who are severely impaired by illness or injury, but who are able to participate in an intensive program of rehabilitation, to obtain high quality care in an inpatient setting, said CMS Acting Administrator Kerry Weems. This includes patients recovering from serious illnesses or injuries, such as stroke, spinal cord injuries, severe burns, amputations and a number of other conditions. CMS projects that Medicare payments to IRFs under this Final rule will be approximately $5.6 billion in fiscal year (FY) 2009.
Updated claims data
CMS has updated IRF claims data using more current 2007 data to analyze case-mix group (CMG) weights and average length of stay values instead of the previously used 2006 data. Current CMG relative weights, in use since FY 2006, are based on FY 2003 data and do not reflect the impact of the revised 60 percent rule criteria on case mix. Based on its analysis of the updated 2007 data, CMS projects that estimated IRF outlier payments, as a percentage of total estimated payments for FY 2008, will increase from 3.0 percent to 3.7 percent. CMS will use the updated claims data without increasing the IRF standard payment conversion factor in accordance with section 115 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (PubLNo 110-173), which sets the increase factor for IRFs at zero percent for FYs 2008 and 2009, effective for discharges beginning on or after April 1, 2008.
2009 policy changes
CMS has determined that the combined budget neutrality factor for the 2009 wage index and labor related share will be 1.0003, for a standard payment amount of $13,038. With a factor of 0.9939, the budget neutrality factor for the case mix groups (CMG) relative weights will result in a standard payment factor conversion of $12,958. Using an outlier threshold payment amount of $10,250, the FY 2009 IRF outlier payments as a percentage of total estimated payments will be 3.0 percent. CMS has updated the national IRF cost-to-charge ratio (CCR) ceiling to 0.619 for rural IRFs and to 0.490 for urban IRFs and has set the CCR ceiling at 1.6.
CMS has also taken this opportunity to use the FY 2009 Final rule to clarify policies regarding New England deemed counties and multi-campus hospitals to be consistent with the Inpatient Prospective Payment System and the other post-acute care settings. CMS will update the IRF wage index tables based on the Office of Management and Budget bulletins used to update the hospital wage data.
Payment rate impact
CMS estimates that the policy changes for FY 2009 will result in an estimated decrease in aggregate IRF payments of $40 million, or 0.7 percent of total IRF payments. This decrease is due to the update to the outlier threshold amount to maintain estimated outlier payments at 3.0 percent for FY 2009. The Final rule will be will be effective for discharges in FY 2009, beginning October 1, 2008.
Source: Final rule, 73 FR 46370, Aug. 8, 2008
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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