Share This Post

Inpatient Rehabilitation Facility Prospective Payment System FY 2021 Proposed Rule

May 12, 2020
Compliance By Kay Hashagen, Senior Consultant

On April 16, 2020, The Centers for Medicare & Medicare Services (CMS) issued the proposed rule that updates Medicare payment policies and rates for facilities under the Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) for FY 2021. CMS published this proposed rule to support requirements to update all Medicare payment policies on an annual basis. You can read the entire rule in the Federal Register here.



There have been recent changes to regulations affecting IRFs related to the COVID-19 public health emergency including proposals that reduce provider burden and support care delivery by providers in the COVID-19 response. CMS recently issued these unprecedented temporary regulatory waivers and new rules to equip the American health care system with maximum flexibility to respond to the COVID-19 pandemic. For the IRF providers, these include:

  • Waiver of the 60 Percent Rule for patients admitted solely to respond to the emergency.
  • Allowing the required face-to-face physician visits in IRFs to be done using telehealth.
  • Removal of the Post-Admission Physician Evaluation requirement (PAPE) since much of the same information continues to be included in the pre-admission screening and plan of care.
  • Intensity of Therapy Requirement (3-Hour Rule) is being waived effective April 27, 2020 per the MLN Matters SE20015 Revised.

Some of the changes in the proposed rule for 2021 are being tested in the rules for the COVID-19 waiver.  Overall, CMS estimates payments to IRFs will increase by 2.9 percent in FY 2021.  Many of the increases are to support the Patients Over Paperwork initiative. The policy changes in the 2021 proposed rule include:

  • Amending the IRF coverage requirements to remove the need for the Post-Admission Physician Evaluation (PAPE).
  • Modifying the IRF coverage requirements to allow non-physician practitioners to perform certain services that are currently required to be performed by a rehabilitation physician for the following:
    • Completing the Pre-Admission Screening (PAS),
    • Developing the individual overall plan of care (IPOC),
    • Performing three face-to-face visits per week,
    • Leading interdisciplinary team meetings, and
    • Review and concurrence of the Pre-Admission Screening assessment (PAS).
  • Review of existing documentation instructions and guidance to ensure uniformity between the Medicare Benefit Policy Manual and the new regulations.
  • Clarifying the definition of a “week,” defined as a period of 7 consecutive calendar days beginning with the date of admission to the IRF, for the purposes of the intensity of therapy requirement.

In addition to the above list, the proposed rule includes highlights that define FY 2021 Case Mix Revisions and Payment Changes. Quality Reporting Program Provisions are also outlined.

These proposed changes are significant and greatly ease the regulations that are currently required and outlined in Chapter 1 of the Medicare Benefit Policy Manual for IRFs. The important thing to remember is that if these relaxed regulations come into play, the documentation will still need to demonstrate that the admission and care delivery meet reasonable and necessary requirements.

To be assured consideration, any comments to the proposed rule must be submitted to CMS no later than June 15, 2020.

LW Consulting, Inc. has a series of interactive training tools that detail specific requirements for IRFs, reinforcing the requirement for medical necessity. These will be updated based on the Final Rule.

 Meet IRF medical necessity requirements with our 13-Part General Inpatient Rehabilitation Facility Training Modules. Contact Jim Wright by calling 717-213-3128  or email to learn more.

Contact Us