Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2026 and Updates to the IRF Quality Reporting Program

DEPARTMENT OF HEALTH AND HUMAN SERVICES <SUBAGY>Centers for Medicare & Medicaid Services</SUBAGY> <CFR>42 CFR Part 412</CFR> <DEPDOC>[CMS-1829-P]</DEPDOC> <RIN>RIN 0938-AV48</RIN> <SUBJECT>Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2026 and Updates to the IRF Quality Reporting Program</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This proposed rule would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY) 2026. As required by statute, this proposed rule includes the proposed classification and weighting factors for the IRF prospective payment system's case-mix groups and a description of the methodologies and data used in computing the prospective payment rates for FY 2026. It also continues the second year of the 3-year phaseout of the rural adjustment, which began in FY 2025. Additionally, the proposed rule includes updates to the IRF Quality Reporting Program (QRP). </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> To be assured consideration, comments must be received at one of the addresses provided below by June 10, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> In commenting, please refer to file code CMS-1829-P. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. <E T="03">Electronically.</E> You may submit electronic comments on this regulation to <E T="03">https://www.regulations.gov.</E> Follow the “Submit a comment” instructions. 2. <E T="03">By regular mail.</E> You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1829-P, P.O. Box 8016, Baltimore, MD 21244-8016. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. <E T="03">By express or overnight mail.</E> You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1829-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, see the beginning of the <E T="02">SUPPLEMENTARY INFORMATION</E> section. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Patricia Taft, (410) 786-4561, for general information. Kimberly Schwartz, (410) 786-2571, for information about the IRF payment policies, payment rates and coverage policies. Ariel Cress, (410) 786-8571, for information about the IRF quality reporting program. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <E T="03">Inspection of Public Comments:</E> All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: <E T="03">https://www.regulations.gov.</E> Follow the search instructions on that website to view public comments. CMS will not post on <E T="03">Regulations.gov</E> public comments that make threats to individuals or institutions or suggest that the commenter will take actions to harm an individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. <E T="03">Plain Language Summary:</E> In accordance with 5 U.S.C. 553(b)(4), a plain language summary of this rule may be found at <E T="03">https://www.regulations.gov/.</E> <E T="03">Deregulation Request for Information (RFI):</E> On January 31, 2025, President Trump issued Executive Order (E.O.) 14192 “Unleashing Prosperity Through Deregulation,” which states the Administration policy to significantly reduce the private expenditures required to comply with Federal regulations to secure America's economic prosperity and national security and the highest possible quality of life for each citizen. We would like public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries, and other stakeholders participating in the Medicare program. CMS has made available a Request for Information (RFI) at: <E T="03">https://www.cms.gov/medicare-regulatory-relief-rfi.</E> Please submit all comments in response to this request for information through the provided weblink. <HD SOURCE="HD1">Availability of Certain Information Through the Internet on the CMS Website</HD> The IRF prospective payment system (IRF PPS) Addenda along with other supporting documents and tables referenced in this proposed rule are available on the CMS website at <E T="03">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS.</E> We note that prior to 2020, each rule or notice issued under the IRF PPS included a detailed reiteration of the various regulatory provisions that have affected the IRF PPS over the years. That discussion, which has been updated to reflect subsequent years, along with detailed background information for various other aspects of the IRF PPS, is now available on the CMS website at <E T="03">https://www.cms.gov/files/document/irf-regulatory-and-legislative-history.pdf.</E> Readers who experience any problems accessing any of these online IRF PPS documents should contact Kia Burwell at (410) 786-7816. <HD SOURCE="HD1">I. Executive Summary</HD> <HD SOURCE="HD2">A. Purpose</HD> This proposed rule proposes to update the prospective payment rates for IRFs for FY 2026 (that is, for discharges occurring on or after October 1, 2025, and on or before September 30, 2026) under section 1886(j)(3)(C) of the Social Security Act (the Act). As required by section 1886(j)(5) of the Act, this proposed rule includes the classification and weighting factors for the IRF PPS's case-mix groups (CMGs), a description of the methodologies and data used in computing the prospective payment rates for FY 2026. For the IRF QRP, this rule proposes to remove two quality measures: (1) the COVID-19 Vaccination Coverage among Healthcare Personnel (HCP) measure, beginning with the FY 2026 IRF QRP, and (2) the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure, beginning with the FY 2028 IRF QRP. Next, we propose to remove four Standardized Patient Assessment Data Elements under the Social Determinant of Health (SDOH) category with the FY2028 IRF QRP. We also propose to amend our reconsideration policy as described in section VII.D of this proposed rule. Finally, we include Requests for Information (RFIs) on four separate considerations: (1) future measure concepts for the IRF QRP in section VII.E of this proposed rule; (2) potential revisions to the IRF-Patient Assessment Instrument (PAI) as described in section VII.F of this proposed rule; (3) potential revisions to the data submission deadlines for assessment data collected for the IRF QRP as described in section VII.G of this proposed rule; and (4) advancing digital quality measurement in IRFs as described in section V11.H of this proposed rule. <HD SOURCE="HD2">B. Summary of Major Provisions</HD> In this proposed rule, we use the methods described in the FY 2025 IRF PPS final rule (89 FR 64276) to update the prospective payment rates for FY 2026 using the most current and complete data available at this time, which is FY 2024 IRF claims and FY 2023 IRF cost report data, as discussed in section IV. For the IRF QRP, this rule proposes to remove two quality measures, remove four SDOH items and amend our reconsideration policy. We also include Requests for Information (RFIs) on four separate considerations. <HD SOURCE="HD2">C. Summary of Impact</HD> <GPOTABLE COLS="2" OPTS="L2,nj,i1" CDEF="s100,r200"> <TTITLE>Table 1—Cost and Transfers</TTITLE> <CHED H="1">Provision description</CHED> <CHED H="1">Transfers/costs</CHED> <ROW> <ENT I="01">FY 2026 IRF PPS payment rate update</ENT> <ENT>The overall economic impact of this proposed rule is an estimated $295 million increase in payments from the Federal Government to IRFs during FY 2026.</ENT> </ROW> <ROW> <ENT I="01">FY 2026 IRF QRP changes</ENT> <ENT>The overall economic impact of this proposed rule is an estimated decrease in costs of $504,929.84 for IRFs for proposed measure removal in VII.C.1. and revisions to reconsiderations policy in VII.E. beginning with the FY 2026 IRF QRP.</ENT> </ROW> <ROW> <ENT I="01">FY 2028 IRF QRP changes</ENT> <ENT>The overall economic impact of this proposed rule is an estimated decrease in costs of $1,090,580.75 to IRFs for proposed measure and item removals in VII.C.2 and VII.D. beginning with the FY 2028 IRF QRP.</ENT> </ROW> </GPOTABLE> <HD SOURCE="HD1">II. Background</HD> <HD SOURCE="HD2">A. Statutory Basis and Scope for IRF PPS Provisions</HD> Section 1886(j) of the Act provides for the implementation of a per-discharge PPS for inpatient rehabilitation hospitals and inpatient rehabilitation units of a hospital (collectively, hereinafter referred to as IRFs). Payments under the IRF PPS encompass inpatient operating and capital costs of furnishing covered rehabilitation services (that is, routine, ancillary, and capital costs), but not direct graduate medical education costs, costs of approved nursing and allied health education activities, bad debts, and other services or items outside ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 218k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━