On April 27, 2018, the Centers for Medicare & Medicaid Services (CMS) proposed changes on how Medicare pays inpatient rehabilitation facilities to make it easier for providers to spend more time with their patients, and improve the use of electronic health records. The proposed rule issued today proposes updates to Medicare payment policies and rates under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS).

The proposed policies in the IRF PPS proposed rule would further the agency’s priority of creating a patient-driven healthcare system by achieving greater price transparency, interoperability, and significant burden reduction so that inpatient rehabilitation facilities can operate with better flexibility.

In the FY 2018 IRF PPS proposed rule, CMS released a Request for Information that solicited ideas to provide greater flexibilities and efficiencies in the IRF PPS. CMS received numerous ideas in response to the Request for Information on how to improve the IRF PPS from beneficiaries, clinicians, advocacy groups, and other stakeholders. The policies in the proposed rule are responsive to this feedback.

The proposed payment rules issued today will update Medicare policies and rates under the Skilled Nursing Facilities Prospective Payment System (SNF PPS), Inpatient Rehabilitation Facilities Prospective Payment System (IRF PPS), Hospice Wage Index and Payment Rate Update, and Inpatient Psychiatric Facility Prospective Payment System (IPF PPS). These payment policy proposals for Fiscal Year 2019 further advance the agency’s priority of creating a patient-driven healthcare system that fosters innovation of efficient and accountable programs while removing waste, fraud, and abuse.

As part of the SNF PPS, the agency is proposing a Patient Driven Payment Model (PDPM), an innovative new system for SNF payment that ties payment to patients’ conditions and care needs rather than volume of services provided. PDPM would simplify complicated paperwork requirements for performing patient assessments by significantly reducing reporting burden, savings facilities approximately $2.0 billion over 10 years. The proposed new PDPM is designed to improve the incentives to treat the needs of the whole patient, instead of focusing on the volume of services the patient receives, which requires substantial paperwork to track over time. This approach advances CMS’ efforts to build a patient-driven healthcare system beginning with innovation throughout Medicare’s payment systems. Under the new SNF PPS case-mix model, patients will have more opportunity to choose a skilled nursing facility that offers services tailored to their condition and preferences, as the payment to nursing homes will be more based on the patient’s condition rather than the specific services provided by each skilled nursing facility.

In the proposed rules announced today, the agency is also responding to comments from stakeholders and seeking to incorporate its Patients over Paperwork Initiative through avenues that reduce unnecessary burden on providers by easing documentation requirements and offering more flexibility. In SNF settings, the proposed new case-mix model, PDPM, is designed to improve the incentives to treat the needs of the whole patient, instead of focusing on the volume of services the patient receives. Today’s IRF PPS rule reflects advances in telecommunications technology and would remove obstacles that may prevent rehabilitation physicians from conducting certain meetings without being physically in the room. For these facilities, the rules would also remove overly prescriptive documentation requirements for admission orders.

Proposed rules for updating Medicare policies and payments under both inpatient rehabilitation and inpatient psychiatric facilities include proposed removal of certain measures. Patient safety and program quality and integrity are top priorities for the agency and are the core of the meaningful measures initiative. The IRF and IPF proposed rules released today include measures that are patient-centered and outcome-driven rather than process-oriented. Where applicable, these changes will allow providers to work with a smaller set of more meaningful healthcare measures and spend more time on patient care.

To view the Fiscal Year 2019 proposed rules posted today at the Federal Register and a CMS fact sheet on each of the proposed rules, please visit the appropriate links:


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