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Medicare Final Rule for FY 2022: Inpatient Rehabilitation Facility (IRF) Prospective Payment (PPS) 


Release Date: July 29, 2021
Federal Register Publication Date: August 4, 2021
Effective Date: October 1, 2021

IRF Final Rule:

Update Factors:  Final FY21 Final FY22
IRF Market basket update       2.4% 2.6%
Productivity Point Adjustment (.0%)   (0.7%)
IRF Increase Factor 2.4% 1.9%

CMS estimates IRF payments for FY2022 to increase 1.5% (or $130 million) related to payments in FY2021. Some takeaways from the final rule:

  • Outlier threshold amount updated from $7,906 for FY 2021 to $9,491 for FY 2022 to maintain estimated outlier payments at about 3% of total estimated aggregate IRF payments for FY 2022.
  • IRF national average urban CCR is .394, national average rural CCR at .478, and national average CCR ceiling at 1.35. 
  • CMS estimates the total labor-related share for FY2022 is equal to 72.9 percent.
  • IRFs not meeting reporting requirements are subject to a two-percentage point (2.0%) reduction in their annual increase factor.
  • COVID-19 Vaccination Coverage among HCP Measure will help assess whether IRFs are assisting in limiting the spread of COVID-19 among their HCP. Public reporting of the COVID-19 Vaccination coverage among HCP measure begins September 2022.
  • For exception where there was an absence of useable data for Q1 and Q2 of 2020. IRF QRP measures will be calculated using three quarters (Q3 2020 through Q1 2021) of data for assessment-based measures, and six quarters for claims-based measures.
  • CMS is finalizing exclusion from fee schedule adjustments from DMEPOS Competitive Bidding Program (CBP) for wheelchair accessories (i.e. seat, back cushions furnished in connection with group 3 or higher complex rehabilitative power wheelchairs).

Sources: CMS Year 2022 Medicare Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) Final Rule and Federal Register  

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