[Federal Register: May 6, 2009 (Volume 74, Number 86)]
[Proposed Rules]
[Page 21051-21133]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06my09-24]
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Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 412
Medicare Program; Inpatient Rehabilitation Facility Prospective Payment
System for Federal Fiscal Year 2010; Proposed Rule
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1538-P]
RIN 0938-AP56
Medicare Program; Inpatient Rehabilitation Facility Prospective
Payment System for Federal Fiscal Year 2010
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would update the payment rates for
inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY)
2010 (for discharges occurring on or after October 1, 2009 and on or
before September 30, 2010) as required under section 1886(j)(3)(C) of
the Social Security Act (the Act). Section 1886(j)(5) of the Act
requires the Secretary to publish in the Federal Register on or before
the August 1 that precedes the start of each fiscal year, the
classification and weighting factors for the IRF prospective payment
system's (PPS) case-mix groups and a description of the methodology and
data used in computing the prospective payment rates for that fiscal
year.
We are proposing to revise existing policies regarding the IRF PPS
within the authority granted under section 1886(j) of the Act.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on June 29, 2009.
ADDRESSES: In commenting, please refer to file code CMS-1538-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions for
``Comment or Submission'' and enter the file code to find the document
accepting comments.
2. By regular mail. You may send written comments by regular mail
(one original and two copies) to the following address only: Centers
for Medicare & Medicaid Services, Department of Health and Human
Services, Attention: CMS-1538-P, P.O. Box 8012, Baltimore, MD 21244-
8012.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) by express or overnight mail to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1538-P, Mail Stop C4-26-05,
7500 Security Boulevard, Baltimore, MD 21244-8012.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to either of the following addresses.
a. Room 445-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201.
Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.
b. 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Julie Stankivic, (410) 786-5725, for
general information regarding the proposed rule.
Susanne Seagrave, (410) 786-0044, for information regarding the
payment policies.
Jeanette Kranacs, (410) 786-9385, for information regarding the
wage index.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: 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 Web site as soon as possible after they have been
received: http://www.regulations.gov. Follow the search instructions on
that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Table of Contents
I. Background
A. Historical Overview of the Inpatient Rehabilitation Facility
Prospective Payment System (IRF PPS)
B. Operational Overview of the Current IRF PPS
II. Summary of Provisions of the Proposed Rule
A. Proposed Updates to the IRF PPS for Federal Fiscal Year (FY)
2010
B. Proposed Revisions to Existing Regulation Text
C. Proposed New Regulation Text
D. Proposed Rescission of Outdated HCFAR-85-2-1
III. Proposed Update to the Case-Mix Group (CMG) Relative Weights
and Average Length of Stay Values for FY 2010
IV. Proposed Updates to the Facility-Level Adjustment Factors for FY
2010
A. Background on Facility-Level Adjustments
B. Proposed Updates to IRF Facility-Level Adjustment Factors
C. Budget Neutrality Methodology for the Updates to the IRF
Facility-Level Adjustment Factors
V. Proposed FY 2010 IRF PPS Federal Prospective Payment Rates
A. Proposed Market Basket Increase Factor and Labor-Related
Share for FY 2010
B. Proposed Area Wage Adjustment
C. Description of the Proposed IRF Standard Payment Conversion
Factor and Payment Rates for FY 2010
D. Example of the Methodology for Adjusting the Proposed Federal
Prospective Payment Rates
VI. Proposed Update to Payments for High-Cost Outliers Under the IRF
PPS
A. Proposed Update to the Outlier Threshold Amount for FY 2010
B. Proposed Update to the IRF Cost-to-Charge Ratio Ceilings
VII. Inpatient Rehabilitation Facility (IRF) Classification and
Payment Requirements
A. Analysis of Current IRF Classification and Payment
Requirements
B. Summary of the Major Proposed Revisions and New Requirements
C. Proposed IRF Admission Requirements
D. Proposed Post-Admission Requirements
E. Proposed Changes to the Requirements for the
Interdisciplinary Team Meeting
F. Proposed Director of Rehabilitation Requirement
G. Clarifying and Conforming Amendments
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H. Proposed Introductory Paragraph at Sec. 412.30
I. Proposed Rescission of the HCFAR 85-2 Ruling
J. Proposed Change to the Requirement to Retain IRF-PAI Data
VIII. Proposed Revisions to the Regulation Text to Require IRFs to
Submit Patient Assessments on Medicare Advantage Patients for Use in
the ``60 Percent Rule'' Calculations
IX. Collection of Information Requirements
X. Response to Public Comments
XI. Regulatory Impact Analysis
A. Overall Impact
B. Anticipated Effects of the Proposed Rule
C. Alternatives Considered
D. Accounting Statement
E. Conclusion
Regulation Text
Addendum
Acronyms
Because of the many terms to which we refer by acronym in this
proposed rule, we are listing the acronyms used and their
corresponding terms in alphabetical order below.
ADC Average Daily Census
ASCA Administrative Simplification Compliance Act, Pub. L. 107-105
BBA Balanced Budget Act of 1997, Pub. L. 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Balanced Budget Refinement Act of 1999, Pub. L.
106-113
BIPA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Benefits Improvement and Protection Act of 2000,
Pub. L. 106-554
CBSA Core-Based Statistical Area
CCR Cost-to-Charge Ratio
CFR Code of Federal Regulations
CMG Case-Mix Group
DRG Diagnostic Related Group
DSH Disproportionate Share Hospital
FI Fiscal Intermediary
FR Federal Register
FTE Full-time Equivalent
FY Federal Fiscal Year
HCFA Health Care Financing Administration
HHH Hubert H. Humphrey Building
HIPAA Health Insurance Portability and Accountability Act, Pub. L.
104-191
IOM Internet Only Manual
IPF Inpatient Psychiatric Facility
IPPS Inpatient Prospective Payment System
IRF Inpatient Rehabilitation Facility
IRF-PAI Inpatient Rehabilitation Facility--Patient Assessment
Instrument
IRF PPS Inpatient Rehabilitation Facility Prospective Payment System
IRVEN Inpatient Rehabilitation Validation and Entry
LTCH Long Term Care Hospital
LIP Low-Income Percentage
MA Medicare Advantage
MAC Medicare Administrative Contractor
MBPM Medicare Benefit Policy Manual
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Pub. L.
110-173
OMB Office of Management and Budget
PAI Patient Assessment Instrument
PPS Prospective Payment System
QIC Qualified Independent Contractors
RAC Recovery Audit Contractors
RAND RAND Corporation
RFA Regulatory Flexibility Act, Pub. L. 96-354
RIA Regulatory Impact Analysis
RIC Rehabilitation Impairment Category
RPL Rehabilitation, Psychiatric, and Long-Term Care Hospital Market
Basket
SCHIP State Children's Health Insurance Program
I. Background
A. Historical Overview of the Inpatient Rehabilitation Facility
Prospective Payment System (IRF PPS)
Section 4421 of the Balanced Budget Act of 1997 (BBA), Pub. L. 105-
33, as amended by section 125 of the Medicare, Medicaid, and SCHIP
(State Children's Health Insurance Program) Balanced Budget Refinement
Act of 1999 (BBRA), Pub. L. 106-113, and by section 305 of the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA), Pub. L. 106-554, provides for the implementation of a
per discharge prospective payment system (PPS) under section 1886(j) of
the Social Security Act (the Act) for inpatient rehabilitation
hospitals and inpatient rehabilitation units of a hospital (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 the scope of
the IRF PPS. Although a complete discussion of the IRF PPS provisions
appears in the original FY 2002 IRF PPS final rule (66 FR 41316) and
the FY 2006 IRF PPS final rule (70 FR 47880), we are providing below a
general description of the IRF PPS for fiscal years (FYs) 2002 through
2009.
Under the IRF PPS from FY 2002 through FY 2005, as described in the
FY 2002 IRF PPS final rule (66 FR 41316), the Federal prospective
payment rates were computed across 100 distinct case-mix groups (CMGs).
We constructed 95 CMGs using rehabilitation impairment categories
(RICs), functional status (both motor and cognitive), and age (in some
cases, cognitive status and age may not be a factor in defining a CMG).
In addition, we constructed five special CMGs to account for very short
stays and for patients who expire in the IRF.
For each of the CMGs, we developed relative weighting factors to
account for a patient's clinical characteristics and expected resource
needs. Thus, the weighting factors accounted for the relative
difference in resource use across all CMGs. Within each CMG, we created
tiers based on the estimated effects that certain comorbidities would
have on resource use.
We established the Federal PPS rates using a standardized payment
conversion factor (formerly referred to as the budget neutral
conversion factor). For a detailed discussion of the budget neutral
conversion factor, please refer to our FY 2004 IRF PPS final rule (68
FR 45684 through 45685). In the FY 2006 IRF PPS final rule (70 FR
47880), we discussed in detail the methodology for determining the
standard payment conversion factor.
We applied the relative weighting factors to the standard payment
conversion factor to compute the unadjusted Federal prospective payment
rates under the IRF PPS from FYs 2002 through 2005. Within the
structure of the payment system, we then made adjustments to account
for interrupted stays, transfers, short stays, and deaths. Finally, we
applied the applicable adjustments to account for geographic variations
in wages (wage index), the percentage of low-income patients, location
in a rural area (if applicable), and outlier payments (if applicable)
to the IRF's unadjusted Federal prospective payment rates.
For cost reporting periods that began on or after January 1, 2002
and before October 1, 2002, we determined the final prospective payment
amounts using the transition methodology prescribed in section
1886(j)(1) of the Act. Under this provision, IRFs transitioning into
the PPS were paid a blend of the Federal IRF PPS rate and the payment
that the IRF would have received had the IRF PPS not been implemented.
This provision also allowed IRFs to elect to bypass this blended
payment and immediately be paid 100 percent of the Federal IRF PPS
rate. The transition methodology expired as of cost reporting periods
beginning on or after October 1, 2002 (FY 2003), and payments for all
IRFs now consist of 100 percent of the Federal IRF PPS rate.
We established a CMS Web site as a primary information resource for
the IRF PPS. The Web site URL is http://www.cms.hhs.gov/
InpatientRehabFacPPS/ and may be accessed to download or view
publications, software, data specifications, educational materials, and
other information pertinent to the IRF PPS.
Section 1886(j) of the Act confers broad statutory authority upon
the Secretary to propose refinements to the
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IRF PPS. In the FY 2006 IRF PPS final rule (70 FR 47880) and in
correcting amendments to the FY 2006 IRF PPS final rule (70 FR 57166)
that we published on September 30, 2005, we finalized a number of
refinements to the IRF PPS case-mix classification system (the CMGs and
the corresponding relative weights) and the case-level and facility-
level adjustments. These refinements included the adoption of OMB's
Core-Based Statistical Area (CBSA) market definitions, modifications to
the CMGs, tier comorbidities, and CMG relative weights, implementation
of a new teaching status adjustment for IRFs, revision and rebasing of
the IRF market basket, and updates to the rural, low-income percentage
(LIP), and high-cost outlier adjustments. Any reference to the FY 2006
IRF PPS final rule in this proposed rule also includes the provisions
effective in the correcting amendments. For a detailed discussion of
the final key policy changes for FY 2006, please refer to the FY 2006
IRF PPS final rule (70 FR 47880 and 70 FR 57166).
In the FY 2007 IRF PPS final rule (71 FR 48354), we further refined
the IRF PPS case-mix classification system (the CMG relative weights)
and the case-level adjustments, to ensure that IRF PPS payments
continue to reflect as accurately as possible the costs of care. For a
detailed discussion of the FY 2007 policy revisions, please refer to
the FY 2007 IRF PPS final rule (71 FR 48354).
In the FY 2008 IRF PPS final rule (72 FR 44284), we updated the
Federal prospective payment rates and the outlier threshold, revised
the IRF wage index policy, and clarified how we determine high-cost
outlier payments for transfer cases. For more information on the policy
changes implemented for FY 2008, please refer to the FY 2008 IRF PPS
final rule (72 FR 44284), in which we published the final FY 2008 IRF
Federal prospective payment rates.
After publication of the FY 2008 IRF PPS final rule (72 FR 44284),
section 115 of the Medicare, Medicaid, and SCHIP Extension Act of 2007,
Pub. L. 110-173 (MMSEA), amended section 1886(j)(3)(C) of the Act to
apply a zero percent increase factor for FYs 2008 and 2009, effective
for IRF discharges occurring on or after April 1, 2008. Section
1886(j)(3)(C) of the Act requires the Secretary to develop an increase
factor to update the IRF Federal prospective payment rates for each FY.
Based on the legislative change to the increase factor, we revised the
FY 2008 Federal prospective payment rates for IRF discharges occurring
on or after April 1, 2008. Thus, the final FY 2008 IRF Federal
prospective payment rates that were published in the FY 2008 IRF PPS
final rule (72 FR 44284) were effective for discharges occurring on or
after October 1, 2007 and on or before March 31, 2008; and the revised
FY 2008 IRF Federal prospective payment rates were effective for
discharges occurring on or after April 1, 2008 and on or before
September 30, 2008. The revised FY 2008 Federal prospective payment
rates are available on the CMS Web site at http://www.cms.hhs.gov/
InpatientRehabFacPPS/07_DataFiles.asp#TopOfPage.
In the FY 2009 IRF PPS final rule (73 FR 46370), we updated the CMG
relative weights, the average length of stay values, and the outlier
threshold; clarified IRF wage index policies regarding the treatment of
``New England deemed'' counties and multi-campus hospitals; and revised
the regulation text in response to section 115 of the MMSEA to set the
IRF compliance percentage at 60 percent (``the 60 percent rule'') and
continue the practice of including comorbidities in the calculation of
compliance percentages. We also applied a zero percent increase factor
for FY 2009. For more information on the policy changes implemented for
FY 2009, please refer to the FY 2009 IRF PPS final rule (73 FR 46370),
in which we published the final FY 2009 IRF Federal prospective payment
rates.
B. Operational Overview of the Current IRF PPS
As described in the FY 2002 IRF PPS final rule, upon the admission
and discharge of a Medicare Part A fee-for-service patient, the IRF is
required to complete the appropriate sections of a patient assessment
instrument (PAI), the Inpatient Rehabilitation Facility-Patient
Assessment Instrument (IRF-PAI). All required data must be
electronically encoded into the IRF-PAI software product. Generally,
the software product includes patient classification programming called
the GROUPER software. The GROUPER software uses specific IRF-PAI data
elements to classify (or group) patients into distinct CMGs and account
for the existence of any relevant comorbidities.
The GROUPER software produces a five-digit CMG number. The first
digit is an alpha-character that indicates the comorbidity tier. The
last four digits represent the distinct CMG number. Free downloads of
the Inpatient Rehabilitation Validation and Entry (IRVEN) software
product, including the GROUPER software, are available on the CMS Web
site at http://www.cms.hhs.gov/InpatientRehabFacPPS/06_Software.asp.
Once a patient is discharged, the IRF submits a Medicare claim as a
Health Insurance Portability and Accountability Act (HIPAA), Pub. L.
104-191, compliant electronic claim or, if the Administrative
Compliance Act (ASCA), Pub. L. 107-105, permits, a paper claim (a UB-04
or a CMS-1450 as appropriate) using the five-digit CMG number and sends
it to the appropriate Medicare fiscal intermediary (FI) or Medicare
Administrative Contractor (MAC). Claims submitted to Medicare must
comply with both ASCA and HIPAA.
Section 3 of the ASCA amends section 1862(a) of the Act by adding
paragraph (22) which requires the Medicare program, subject to section
1862(h) of the Act, to deny payment under Part A or Part B for any
expenses for items or services ``for which a claim is submitted other
than in an electronic form specified by the Secretary.'' Section
1862(h) of the Act, in turn, provides that the Secretary shall waive
such denial in situations in which there is no method available for the
submission of claims in an electronic form or the entity submitting the
claim is a small provider. In addition, the Secretary also has the
authority to waive such denial ``in such unusual cases as the Secretary
finds appropriate.'' For more information we refer the reader to the
final rule, ``Medicare Program; Electronic Submission of Medicare
Claims'' (70 FR 71008, November 25, 2005). CMS instructions for the
limited number of Medicare claims submitted on paper are available at:
(http://www.cms.hhs.gov/manuals/downloads/clm104c25.pdf.)
Section 3 of the ASCA operates in the context of the administrative
simplification provisions of HIPAA, which include, among others, the
requirements for transaction standards and code sets codified in 45
CFR, parts 160 and 162, subparts A and I through R (generally known as
the Transactions Rule). The Transactions Rule requires covered
entities, including covered healthcare providers, to conduct covered
electronic transactions according to the applicable transaction
standards. (See the program claim memoranda issued and published by CMS
at: http://www.cms.hhs.gov/ElectronicBillingEDITrans/ and listed in the
addenda to the Medicare Intermediary Manual, Part 3, section 3600).
The Medicare FI or MAC processes the claim through its software
system. This software system includes pricing programming called the
``PRICER'' software. The PRICER software uses the
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CMG number, along with other specific claim data elements and provider-
specific data, to adjust the IRF's prospective payment for interrupted
stays, transfers, short stays, and deaths, and then applies the
applicable adjustments to account for the IRF's wage index, percentage
of low-income patients, rural location, and outlier payments. For
discharges occurring on or after October 1, 2005, the IRF PPS payment
also reflects the new teaching status adjustment that became effective
as of FY 2006, as discussed in the FY 2006 IRF PPS final rule (70 FR
47880).
II. Summary of Provisions of the Proposed Rule
In this proposed rule, we are proposing updates to the IRF PPS,
revisions to existing regulations text for the purpose of providing
greater clarity, new regulations text to improve calculation of
compliance with the ``60 percent'' rule, and rescission of an outdated
Health Care Financing Administration (HFCA) Ruling (HCFAR 85-2-1).
These proposals are as follows:
A. Proposed Updates to the IRF PPS for Federal Fiscal Year (FY) 2010
Update the FY 2010 IRF PPS relative weights and average
length of stay values using the most current and complete Medicare
claims and cost report data in a budget neutral manner, as discussed in
section III.
Update the FY 2010 IRF facility-level adjustments (rural,
LIP, and teaching status adjustments) using the most current and
complete Medicare claims and cost report data in a budget neutral
manner, as discussed in section IV.
Update the FY 2010 IRF PPS payment rates by the proposed
market basket, as discussed in section V.A.
Update the FY 2010 IRF PPS payment rates by the proposed
wage index and the labor-related share in a budget neutral manner, as
discussed in section V.A and V.B.
Update the outlier threshold amount for FY 2010, as
discussed in section VI.A.
B. Proposed Revisions to Existing Regulation Text
Relocate and revise the criteria to be classified as an
inpatient rehabilitation hospital found at existing Sec. 412.23(b)(3)
through (b)(7) that describe requirements relating to preadmission
screening, close medical supervision, a director of rehabilitation, the
plan of care, and a coordinated multidisciplinary team approach.
Redesignate paragraphs (b)(8) and (b)(9) of Sec. 412.23 as paragraphs
(b)(3) and (b)(4) and revise newly redesignated paragraph (b)(4), as
described in section VII.
Revise the section heading at Sec. 412.29 that describes
the additional requirements applicable to inpatient rehabilitation
units to include inpatient rehabilitation hospitals, as described in
section VII.
Relocate and revise the existing requirements at Sec.
412.29(b) through (f) that describe the requirements relating to
preadmission screening, close medical supervision, a director of
rehabilitation, the plan of care, and a coordinated multidisciplinary
team approach, as described in section VII.
Revise the section heading at Sec. 412.30 that describes
the requirements applicable to new and converted rehabilitation units,
as described in section VII.
Revise the regulation text in Sec. 412.604, Sec.
412.606, Sec. 412.610. Sec. 412.614 and Sec. 412.618 to require the
collection of inpatient rehabilitation facility patient assessment
instrument data on Medicare Part C (Medicare Advantage) patients in
IRFs for use in the 60 percent rule compliance percentage calculations,
as described in section VIII.
Remove Sec. 412.614(a)(3) that provides for an exception
in the transmission of IRF-PAI data to CMS, as described in section
VIII.
Revise the heading at Sec. 412.614(d) to ``Consequences
of failure to submit complete and timely IRF-PAI data, as required
under paragraph (c) of this section,'' as described in section VIII.
Revise the heading at Sec. 412.614(d)(1) to ``Medicare
Part A fee-for-service data,'' as described in section VIII.
Redesignate existing subsection (1) as (1)(a) and correct
a technical error in the new subsection (1)(a), as described in section
VIII.
Redesignate existing subsection (2) as (1)(b), as
described in section VIII.
C. Proposed New Regulation Text
Revise Sec. 412.29, as described in section VII, to
include the additional requirements to be met by inpatient
rehabilitation hospitals and units and the requirements for coverage in
an IRF.
Add a new introductory paragraph at Sec. 412.30 that
includes the requirements previously found in Sec. 412.29(a)
(describing the requirements for new and converted rehabilitation
units), as described in section VII.
Revise Sec. 412.610(f) to require that the IRF provide a
copy of the electronic computer file format of the IRF-PAI to the
contractor upon request, as described in section VII.
Add a new paragraph Sec. 412.614(d)(2) to indicate that
failure of an IRF to submit IRF-PAI data on all of its Medicare Part C
(Medicare Advantage) patients will result in forfeiture of the IRF's
ability to have any of its Medicare Part C (Medicare Advantage) data
used in the compliance calculations, as described in section VIII.
D. Proposed Rescission of Outdated HCFAR-85-2-1
Rescind HCFA Ruling 85-2-1 entitled ``Medicare Criteria for
Medicare Coverage of Inpatient Hospital Rehabilitation Services'' and
set forth new coverage criteria applicable to care provided by IRFs, as
described in section VIII.
Proposed Update to the Case-Mix Group (CMG) Relative Weights and
Average Length of Stay Values for FY 2010
As specified in 42 CFR 412.620(b)(1), we calculate a relative
weight for each CMG that is proportional to the resources needed by an
average inpatient rehabilitation case in that CMG. For example, cases
in a CMG with a relative weight of 2, on average, will cost twice as
much as cases in a CMG with a relative weight of 1. Relative weights
account for the variance in cost per discharge due to the variance in
resource utilization among the payment groups, and their use helps to
ensure that IRF PPS payments support beneficiary access to care as well
as provider efficiency.
In this proposed rule, we propose to update the CMG relative
weights and average length of stay values for FY 2010. Comments on the
FY 2009 IRF PPS proposed rule (73 FR 46373) suggested that the data
that we used for FY 2009 to update the CMG relative weights and average
length of stay values did not fully reflect recent changes in IRF
utilization that have occurred because of changes in the IRF compliance
percentage and the consequences of recent IRF medical necessity
reviews. In light of recently available data and our desire to ensure
that the CMG relative weights and average length of stay values are as
reflective as possible of these recent changes and that IRF PPS
payments continue to reflect as accurately as possible the current
costs of care in IRFs, we believe that it is appropriate to update the
CMG relative weights and average length of stay values at this time.
As required by statute, we always use the most recent available
data to update the CMG relative weights and average length of stay
values. For FY 2009,
[[Page 21056]]
however, those data were the FY 2006 IRF cost report data. As noted
above, many commenters on the FY 2009 IRF PPS proposed rule (73 FR
46373) suggested that the FY 2006 IRF cost report data were not fully
reflective of the recent IRF utilization changes and that the FY 2007
IRF cost report data would be more reflective of these changes. We were
unable to use the FY 2007 IRF cost report data for the FY 2009 final
rule (73 FR 46370) because, as we indicated in that rule, only a small
portion of the FY 2007 IRF cost reports were available for analysis at
that time. Thus, we used the most current and complete IRF cost report
data available at that time.
At this time, the majority of FY 2007 IRF cost reports are
available for use in analyses in this proposed rule. Thus, we are using
FY 2007 cost report data to update the proposed FY 2010 CMG relative
weights and average length of stay values in this proposed rule.
In this proposed rule, we propose to use the same methodology that
we used to update the CMG relative weights and average length of stay
values in the FY 2009 IRF PPS final rule (73 FR 46370). In calculating
the CMG relative weights, we use a hospital-specific relative value
method to estimate operating (routine and ancillary services) and
capital costs of IRFs. The process used to calculate the CMG relative
weights for this proposed rule follows below:
Step 1. We calculate the CMG relative weights by estimating the
effects that comorbidities have on costs.
Step 2. We adjust the cost of each Medicare discharge (case) to
reflect the effects found in the first step.
Step 3. We use the adjusted costs from the second step to calculate
CMG relative weights, using the hospital-specific relative value
method.
Step 4. We normalize the FY 2010 CMG relative weight to the same
average CMG relative weight from the CMG relative weights implemented
in the FY 2009 IRF PPS final rule (73 FR 46370).
Consistent with the way we implemented changes to the IRF
classification system in the FY 2006 IRF PPS final rule (70 FR 47880
and 70 FR 57166), the FY 2007 IRF PPS final rule (71 FR 48354), and the
FY 2009 IRF PPS final rule (73 FR 46370), we propose to make changes to
the CMG relative weights for FY 2010 in such a way that total estimated
aggregate payments to IRFs for FY 2010 would be the same with or
without the proposed changes (that is, in a budget neutral manner) by
applying a budget neutrality factor to the standard payment amount. To
calculate the appropriate proposed budget neutrality factor for use in
updating the FY 2010 CMG relative weights, we propose to use the
following steps:
Step 1. Calculate the estimated total amount of IRF PPS payments
for FY 2010 (with no proposed changes to the CMG relative weights).
Step 2. Apply the proposed changes to the CMG relative weights (as
discussed above) to calculate the estimated total amount of IRF PPS
payments for FY 2010.
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2 to determine the proposed budget neutrality factor
(1.0004) that would maintain the same total estimated aggregate
payments in FY 2010 with and without the proposed changes to the CMG
relative weights.
Step 4. Apply the proposed budget neutrality factor (1.0004) to the
FY 2009 IRF PPS standard payment amount after the application of the
budget-neutral wage adjustment factor.
In section V.C of this proposed rule, we discuss the proposed
methodology for calculating the standard payment conversion factor for
FY 2010.
Table 1 below, ``Proposed Relative Weights and Average Length of
Stay Values for Case-Mix Groups,'' presents the CMGs, the comorbidity
tiers, the proposed corresponding relative weights, and the proposed
average length of stay values for each CMG and tier for FY 2010. The
average length of stay for each CMG is used to determine when an IRF
discharge meets the definition of a short-stay transfer, which results
in a per diem case level adjustment. The proposed relative weights and
average length of stay values shown in Table 1 are subject to change
for the final rule if more recent data become available for use in
these analyses.
Table 1--Proposed Relative Weights and Average Length of Stay Values for Case-Mix Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed relative weight Proposed average length of stay
CMG CMG description (M=motor, ---------------------------------------------------------------------------------------
C=cognitive, A=age) Tier 1 Tier 2 Tier 3 None Tier 1 Tier 2 Tier 3 None
--------------------------------------------------------------------------------------------------------------------------------------------------------
0101............................ Stroke M > 51.05.............. 0.7687 0.7091 0.6360 0.6046 9 10 9 8
0102............................ Stroke M > 44.45 and M < 51.05 0.9676 0.8926 0.8006 0.7611 11 11 11 10
and C > 18.5.
0103............................ Stroke M > 44.45 and M < 51.05 1.1434 1.0548 0.9461 0.8994 14 14 12 12
and C < 18.5.
0104............................ Stroke M > 38.85 and M < 44.45 1.2167 1.1225 1.0068 0.9570 13 14 13 13
0105............................ Stroke M > 34.25 and M < 38.85 1.4313 1.3205 1.1843 1.1258 16 18 15 15
0106............................ Stroke M > 30.05 and M < 34.25 1.6634 1.5345 1.3763 1.3083 19 19 17 17
0107............................ Stroke M > 26.15 and M < 30.05 1.8955 1.7486 1.5684 1.4909 20 21 19 19
0108............................ Stroke M < 26.15 and A > 84.5. 2.2786 2.1021 1.8854 1.7922 28 26 23 22
0109............................ Stroke M > 22.35 and M < 26.15 2.1740 2.0057 1.7989 1.7100 22 23 21 22
and A < 84.5.
0110............................ Stroke M < 22.35 and A < 84.5. 2.7212 2.5104 2.2516 2.1404 30 30 27 26
0201............................ Traumatic brain injury M > 0.7736 0.6581 0.5909 0.5368 11 10 8 8
53.35 and C > 23.5.
0202............................ Traumatic brain injury M > 1.0344 0.8800 0.7901 0.7177 14 11 10 10
44.25 and M < 53.35 and C >
23.5.
[[Page 21057]]
0203............................ Traumatic brain injury M > 1.1675 0.9933 0.8918 0.8101 12 13 12 11
44.25 and C < 23.5.
0204............................ Traumatic brain injury M > 1.2977 1.1040 0.9913 0.9005 15 14 13 12
40.65 and M < 44.25.
0205............................ Traumatic brain injury M > 1.5866 1.3498 1.2120 1.1009 20 17 16 14
28.75 and M < 40.65.
0206............................ Traumatic brain injury M > 1.9678 1.6741 1.5032 1.3655 21 21 18 18
22.05 and M < 28.75.
0207............................ Traumatic brain injury M < 2.6606 2.2636 2.0324 1.8462 36 28 25 22
22.05.
0301............................ Non-traumatic brain injury M > 1.1006 0.9303 0.8372 0.7664 12 12 11 10
41.05.
0302............................ Non-traumatic brain injury M > 1.3956 1.1797 1.0615 0.9719 14 15 13 13
35.05 and M < 41.05.
0303............................ Non-traumatic brain injury M > 1.6795 1.4197 1.2775 1.1696 17 18 16 15
26.15 and M < 35.05.
0304............................ Non-traumatic brain injury M < 2.3029 1.9466 1.7517 1.6037 28 23 21 20
26.15.
0401............................ Traumatic spinal cord injury M 0.9262 0.7974 0.7669 0.6573 12 12 11 9
> 48.45.
0402............................ Traumatic spinal cord injury M 1.3955 1.2013 1.1554 0.9903 17 15 16 13
> 30.35 and M < 48.45.
0403............................ Traumatic spinal cord injury M 2.2854 1.9675 1.8922 1.6218 27 23 23 21
> 16.05 and M < 30.35.
0404............................ Traumatic spinal cord injury M 4.0113 3.4532 3.3211 2.8464 52 40 37 35
< 16.05 and A > 63.5.
0405............................ Traumatic spinal cord injury M 3.0911 2.6610 2.5592 2.1935 45 30 29 27
< 16.05 and A < 63.5.
0501............................ Non-traumatic spinal cord 0.8120 0.6408 0.5930 0.5226 9 10 8 8
injury M > 51.35.
0502............................ Non-traumatic spinal cord 1.1022 0.8698 0.8049 0.7094 13 11 11 10
injury M > 40.15 and M <
51.35.
0503............................ Non-traumatic spinal cord 1.4364 1.1336 1.0491 0.9245 16 14 13 13
injury M > 31.25 and M <
40.15.
0504............................ Non-traumatic spinal cord 1.7306 1.3658 1.2639 1.1139 21 17 16 15
injury M > 29.25 and M <
31.25.
0505............................ Non-traumatic spinal cord 2.0466 1.6151 1.4947 1.3172 23 21 19 17
injury M > 23.75 and M <
29.25.
0506............................ Non-traumatic spinal cord 2.8482 2.2478 2.0801 1.8332 32 27 26 23
injury M < 23.75.
0601............................ Neurological M > 47.75........ 0.9213 0.7561 0.7165 0.6517 11 9 10 9
0602............................ Neurological M > 37.35 and M < 1.2343 1.0130 0.9598 0.8730 12 13 12 12
47.75.
0603............................ Neurological M > 25.85 and M < 1.5714 1.2897 1.2220 1.1115 16 16 15 15
37.35.
0604............................ Neurological M < 25.85........ 2.0876 1.7133 1.6235 1.4766 24 21 20 18
0701............................ Fracture of lower extremity M 0.9097 0.7723 0.7302 0.6542 11 11 10 9
> 42.15.
0702............................ Fracture of lower extremity M 1.2047 1.0228 0.9671 0.8664 14 14 12 12
> 34.15 and M < 42.15.
0703............................ Fracture of lower extremity M 1.4750 1.2523 1.1841 1.0609 16 16 15 14
> 28.15 and M < 34.15.
0704............................ Fracture of lower extremity M 1.8842 1.5997 1.5126 1.3552 20 20 19 17
< 28.15.
0801............................ Replacement of lower extremity 0.6950 0.5693 0.5176 0.4707 8 7 8 7
joint M > 49.55.
0802............................ Replacement of lower extremity 0.9315 0.7631 0.6938 0.6309 10 10 9 9
joint M > 37.05 and M < 49.55.
0803............................ Replacement of lower extremity 1.3298 1.0894 0.9904 0.9007 13 13 13 12
joint M > 28.65 and M < 37.05
and A > 83.5.
0804............................ Replacement of lower extremity 1.1654 0.9547 0.8680 0.7893 13 12 11 11
joint M > 28.65 and M < 37.05
and A < 83.5.
[[Page 21058]]
0805............................ Replacement of lower extremity 1.4552 1.1921 1.0838 0.9856 16 16 13 13
joint M > 22.05 and M < 28.65.
0806............................ Replacement of lower extremity 1.8041 1.4779 1.3436 1.2219 18 18 17 15
joint M < 22.05.
0901............................ Other orthopedic M > 44.75.... 0.8415 0.7586 0.6834 0.6029 10 10 9 9
0902............................ Other orthopedic M > 34.35 and 1.1248 1.0140 0.9135 0.8059 13 13 12 11
M < 44.75.
0903............................ Other orthopedic M > 24.15 and 1.4546 1.3113 1.1813 1.0422 16 16 15 14
M < 34.35.
0904............................ Other orthopedic M < 24.15.... 1.9249 1.7352 1.5633 1.3791 22 22 19 18
1001............................ Amputation, lower extremity M 0.9396 0.9140 0.7841 0.7190 11 12 11 10
> 47.65.
1002............................ Amputation, lower extremity M 1.2481 1.2141 1.0416 0.9550 14 15 13 12
> 36.25 and M < 47.65.
1003............................ Amputation, lower extremity M 1.8120 1.7627 1.5122 1.3865 19 22 19 17
< 36.25.
1101............................ Amputation, non-lower 1.1979 0.9863 0.9863 0.8490 12 12 13 11
extremity M > 36.35.
1102............................ Amputation, non-lower 1.7482 1.4394 1.4394 1.2389 18 18 17 15
extremity M < 36.35.
1201............................ Osteoarthritis M > 37.65...... 1.0475 0.9619 0.8526 0.7588 11 12 11 10
1202............................ Osteoarthritis M > 30.75 and M 1.3064 1.1998 1.0634 0.9464 14 15 13 13
< 37.65.
1203............................ Osteoarthritis M < 30.75...... 1.6446 1.5103 1.3387 1.1914 16 18 17 15
1301............................ Rheumatoid, other arthritis M 1.1050 0.9958 0.8482 0.7584 12 12 11 10
> 36.35.
1302............................ Rheumatoid, other arthritis M 1.4925 1.3451 1.1456 1.0243 15 16 14 14
> 26.15 and M < 36.35.
1303............................ Rheumatoid, other arthritis M 1.9358 1.7445 1.4858 1.3285 24 22 19 17
< 26.15.
1401............................ Cardiac M > 48.85............. 0.8086 0.7359 0.6488 0.5737 10 10 9 8
1402............................ Cardiac M > 38.55 and M < 1.1101 1.0104 0.8907 0.7877 13 13 12 11
48.85.
1403............................ Cardiac M > 31.15 and M < 1.3542 1.2325 1.0866 0.9609 15 15 14 13
38.55.
1404............................ Cardiac M < 31.15............. 1.7581 1.6002 1.4107 1.2475 20 20 17 16
1501............................ Pulmonary M > 49.25........... 0.9737 0.8538 0.7507 0.7139 11 12 10 10
1502............................ Pulmonary M > 39.05 and M < 1.2407 1.0879 0.9565 0.9097 13 13 12 11
49.25.
1503............................ Pulmonary M > 29.15 and M < 1.5710 1.3776 1.2112 1.1519 16 17 14 14
39.05.
1504............................ Pulmonary M < 29.15........... 1.9666 1.7245 1.5162 1.4419 22 19 17 17
1601............................ Pain syndrome M > 37.15....... 1.0995 0.8921 0.7628 0.7055 13 13 10 10
1602............................ Pain syndrome M > 26.75 and M 1.4832 1.2034 1.0290 0.9518 16 16 13 13
< 37.15.
1603............................ Pain syndrome M < 26.75....... 1.9071 1.5473 1.3231 1.2238 21 19 17 16
1701............................ Major multiple trauma without 1.0471 0.9262 0.8483 0.7476 11 12 11 10
brain or spinal cord injury M
> 39.25.
1702............................ Major multiple trauma without 1.3692 1.2110 1.1092 0.9776 14 15 14 13
brain or spinal cord injury M
> 31.05 and M < 39.25.
1703............................ Major multiple trauma without 1.6479 1.4575 1.3350 1.1765 18 17 16 15
brain or spinal cord injury M
> 25.55 and M < 31.05.
1704............................ Major multiple trauma without 2.0704 1.8312 1.6773 1.4782 23 24 21 19
brain or spinal cord injury M
< 25.55.
1801............................ Major multiple trauma with 1.2289 0.9679 0.9097 0.7838 16 13 13 11
brain or spinal cord injury M
> 40.85.
1802............................ Major multiple trauma with 1.8447 1.4528 1.3655 1.1766 19 18 16 15
brain or spinal cord injury M
> 23.05 and M < 40.85.
1803............................ Major multiple trauma with 3.1568 2.4862 2.3367 2.0135 41 31 27 24
brain or spinal cord injury M
< 23.05.
1901............................ Guillain Barre M > 35.95...... 1.1168 0.9120 0.9120 0.8640 14 11 11 12
[[Page 21059]]
1902............................ Guillain Barre M > 18.05 and M 2.2757 1.8585 1.8585 1.7607 25 23 25 22
< 35.95.
1903............................ Guillain Barre M < 18.05...... 3.6152 2.9523 2.9523 2.7970 33 39 41 32
2001............................ Miscellaneous M > 49.15....... 0.8798 0.7281 0.6613 0.5922 11 10 9 8
2002............................ Miscellaneous M > 38.75 and M 1.1850 0.9807 0.8907 0.7977 12 13 12 11
< 49.15.
2003............................ Miscellaneous M > 27.85 and M 1.5208 1.2585 1.1431 1.0236 16 16 14 13
< 38.75.
2004............................ Miscellaneous M < 27.85....... 2.0336 1.6829 1.5286 1.3688 22 20 19 17
2101............................ Burns M > 0................... 2.2605 2.2605 1.9566 1.6843 25 25 25 17
5001............................ Short-stay cases, length of ......... ......... ......... 0.1465 ......... ......... ......... 3
stay is 3 days or fewer.
5101............................ Expired, orthopedic, length of ......... ......... ......... 0.6748 ......... ......... ......... 8
stay is 13 days or fewer.
5102............................ Expired, orthopedic, length of ......... ......... ......... 1.5299 ......... ......... ......... 19
stay is 14 days or more.
5103............................ Expired, not orthopedic, ......... ......... ......... 0.7087 ......... ......... ......... 9
length of stay is 15 days or
fewer.
5104............................ Expired, not orthopedic, ......... ......... ......... 1.9990 ......... ......... ......... 24
length of stay is 16 days or
more.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Generally, updates to the CMG relative weights result in some
increases and some decreases to the CMG relative weight values. Table 2
shows, overall, how the proposed revisions in this proposed rule would
affect particular CMG relative weight values, which affect the overall
distribution of payments within CMGs and tiers. Note that, because we
propose to implement the CMG relative weight revisions in a budget
neutral manner, total estimated aggregate payments to IRFs for FY 2010
would not be affected. However, the proposed revisions would affect the
distribution of payments within CMGs and tiers.
Table 2--Distributional Effects of the Proposed Changes to the CMG
Relative Weights (FY 2009 Values Compared With FY 2010 Values)
------------------------------------------------------------------------
Number of cases Percentage of
Percentage change affected cases affected
------------------------------------------------------------------------
Increased by 5% or more............. 0 0
Increased by between 0% and 5%...... 121,702 33
Changed by 0%....................... 72,205 19
Decreased by between 0% and 5%...... 180,032 48
Decreased by 5% or more............. 76 0
------------------------------------------------------------------------
As Table 2 shows, virtually 100 percent of all IRF cases are in
CMGs and tiers that would experience less than a 5 percent change
(either increase or decrease) in the CMG relative weight value as a
result of the proposed revisions. The largest increase in the proposed
CMG relative weight values would be a 2.9 percent increase in the CMG
relative weight value for CMG C0405--Traumatic spinal cord injury,
motor score less than 16.05 and age less than 63.5--in tier 2. However,
based on our analysis of the FY 2007 IRF claims data, this proposed
change would only affect 25 cases. The proposed increase affecting the
largest number of cases would be a 0.1 percent increase in the CMG
relative weight value for CMG A0110--Stroke, motor score less than
22.35 and age less than 84.5--in the ``no comorbidity'' tier. Based on
our analysis of the FY 2007 IRF claims data, this change would affect
15,426 cases. The largest percent decrease that would be anticipated
from the proposed CMG relative weight values would be an estimated 8.9
percent decrease in the CMG relative weight for CMG D2101--Burns, motor
score greater than zero--in tier 3. However, based on our analysis of
the FY 2007 IRF claims data, this proposed change would only affect 76
cases. The proposed decrease affecting the largest number of cases
would be a 0.1 percent decrease in the CMG relative weight value for
CMG A0704--Fracture of lower extremity, motor score less than 28.15--in
the ``no comorbidity'' tier. Based on our analysis of the FY 2007 IRF
claims data, this change would affect 24,541 cases.
Given the changes in IRFs' case mix over time, we believe that it
is important to update the CMG relative weights and average length of
stay values periodically to continue to reflect the trends in IRF
patient populations. As we have data that better reflect the recent IRF
utilization changes at this time, we propose the updates described in
this section.
IV. Proposed Updates to the Facility-Level Adjustment Factors for FY
2010
A. Background on Facility-Level Adjustments
Section 1886(j)(3)(A)(v) of the Act confers broad authority upon
the Secretary to adjust the per unit payment rate by ``such factors as
the Secretary determines are necessary to properly reflect variations
in necessary costs of
[[Page 21060]]
treatment among rehabilitation facilities.'' For example, we adjust the
Federal prospective payment amount associated with a CMG to account for
facility-level characteristics such as an IRF's LIP percentage,
teaching status, and location in a rural area, if applicable, as
described in Sec. 412.624(e).
In the FY 2002 IRF PPS final rule (66 FR at 41359), we published
the original adjustment factors that were used to calculate an IRF's
LIP percentage, and location in a rural area, if applicable. These
original adjustment factors were computed by the RAND Corporation
(RAND) under contract with CMS. As discussed in the FY 2002 IRF PPS
proposed rule (65 FR 66356), RAND used regression analysis to establish
these adjustment factors by examining the effects of various facility-
level characteristics, including rural location and percentage of low-
income patients, on an IRF's average cost per case. Based on RAND's
analysis, in the FY 2002 IRF PPS final rule (66 FR at 41359 through
41360) we finalized a rural adjustment factor of 19.14 percent and a
LIP adjustment formula of (1 + disproportionate share hospital (DSH)
patient percentage) raised to the power of (0.4838), where the DSH
patient percentage for each IRF =
[GRAPHIC] [TIFF OMITTED] TP06MY09.051
(From this point forward when we refer to the ``LIP adjustment
factor'', we mean the number to which the standard formula (1 + DSH
patient percentage) is raised [in this case, 0.4838].)
In the FY 2006 IRF PPS final rule (70 FR 47880, 47928 through
47934), we updated the adjustment factors for the rural and LIP
adjustments and added a new teaching status adjustment. The FY 2006
adjustment factors were based on updated regression analysis by RAND
using the same methodology used to develop the rural and LIP adjustment
factors for the FY 2002 IRF PPS final rule (66 FR at 41359) and the
most current and complete IRF claims and cost report data available at
that time (FY 2003). (RAND's analysis for FY 2006 is included in a
November 2005 RAND report titled ``Possible Refinements to the
Facility-Level Payment Adjustments for the Inpatient Rehabilitation
Facility Prospective Payment System,'' which can be downloaded from
RAND's Web site at http://www.rand.org/pubs/technical_reports/TR219/.)
Based on RAND's 2005 analysis, we finalized a rural adjustment factor
of 21.3 percent and a LIP adjustment factor of 0.6229 in the FY 2006
IRF PPS final rule (70 FR 47880, 47928 through 47934).
We also described our rationale for implementing a teaching status
adjustment for IRFs based on RAND's 2005 analysis in the FY 2006 IRF
PPS final rule (70 FR 47880, 47928 through 47932). The IRF teaching
status adjustment that was finalized in the FY 2006 IRF PPS final rule
(70 FR 47880, 47928 through 47932) was calculated using the following
formula for each IRF: (1 + full-time equivalent (FTE) residents/average
daily census) raised to the power of (0.9012). (From this point forward
when we refer to the ``teaching status adjustment factor'', we mean the
number to which the standard formula (1 + FTE residents/average daily
census) is raised [in this case, 0.9012]).
B. Proposed Updates to the IRF Facility-Level Adjustment Factors
In this rule, we propose to update the rural, LIP, and teaching
status adjustment factors for the IRF PPS based on updated regression
analysis using the same regression analysis methodology that was used
by RAND to compute the rural and LIP adjustment factors for the FY 2002
IRF PPS final rule (66 FR at 41359) and the rural, LIP, and teaching
status adjustment factors for the FY 2006 IRF PPS final rule (70 FR
47880, 47928 through 47934). However, for the reasons discussed below,
we are proposing to compute the adjustment factors using three
consecutive years of cost report data (FY 2005, FY 2006, and FY 2007)
and average the adjustment factors for all three years to develop the
proposed rural, LIP, and teaching status adjustment factors for FY
2010.
We received a comment on the FY 2009 IRF PPS proposed rule (73 FR
22674) suggesting that we consider a three-year moving average approach
because it would enable IRFs to plan their future Medicare payments
more accurately. We analyzed the suggestion and believe that a three
year average of the adjustment factors would promote more stability in
the adjustment factors over time, which we believe would benefit IRFs
by ensuring reduced variation from year to year, thus enabling them to
better project future Medicare payments and thereby facilitate IRFs'
long-term budgetary planning processes. If, instead, we were to
continue to compute the adjustment factors based on only a single
year's worth of data (as was done in the FY 2002 and FY 2006 IRF PPS
final rules (66 FR at 41359 and 70 FR 47880, 47928 through 47934)), we
believe that IRFs would experience unnecessarily large fluctuations in
the adjustment factors from year to year. These large fluctuations
would reduce the consistency and predictability of IRF PPS payments
over time, and could be detrimental to IRFs' long-term planning
processes. For this reason, we are proposing the use of a three-year
moving average in computing the proposed rural, LIP, and teaching
status adjustment factors in this proposed rule.
To study the effects of this proposal over time, we examined the
magnitude of changes in the rural, LIP, and teaching status adjustment
factors that would occur if we were to compute the proposed adjustment
factors based on a single year's worth of data (FY 2007) compared with
computing the proposed adjustment factors based on an average of three
year's worth of data (FY 2005, FY 2006, and FY 2007). In 2002 the rural
adjustment factor was set at 19.14 percent. It was updated in FY 2006
to 21.3 percent based on RAND's regression analysis of FY 2003 Medicare
claims and cost report data, as described above. If we were to update
the rural adjustment factor for FY 2010 using a single year's worth of
data (FY 2007), it would decrease to 17.65 percent. If instead we were
to calculate an average adjustment factor by using the most recent
three years worth of data (FY 2005, FY 2006, and FY 2007), the rural
adjustment factor would instead decrease to 18.27 percent. That is,
computing the adjustment factors based on an average of three year's
worth of data (FY 2005 through FY 2007) instead of a single year's
worth of data (FY 2007) would lead to a smaller decrease in the rural
adjustment factor and would thereby mitigate the impact of this change
on IRF payments to rural providers, which would benefit rural IRFs in
conducting their long-term budgetary planning processes.
Similarly, we examined the effects of the proposed three-year
moving average methodology on the magnitude of the LIP adjustment
factor for FY 2010. The LIP adjustment factor was 0.4838 in FY 2002. It
was updated in FY 2006 to 0.6229 based on RAND's regression
[[Page 21061]]
analysis of FY 2003 Medicare claims and cost report data, as described
above. If we were to update the LIP adjustment factor for FY 2010 using
FY 2007 data, it would decrease to 0.3865. If instead we were to
average the adjustment factors derived by using the most recent three
years worth of data (FY 2005, FY 2006, and FY 2007), the proposed LIP
adjustment factor for FY 2010 would be 0.4372. Thus, computing the LIP
adjustment factor based on the most recent three years worth of data
(FY 2005, FY 2006, and FY 2007) would result in a smaller decrease in
the LIP adjustment factor and would thereby mitigate the impact of this
change on IRF payments, which would benefit all IRF providers that
receive LIP payments.
Lastly, we examined the effects of the proposed three-year moving
average approach on the magnitude of the teaching status adjustment
factor for FY 2010. The IRF teaching status adjustment was first
implemented in the FY 2006 IRF PPS final rule (70 FR 47880, 47928
through 47932), and the teaching status adjustment factor implemented
in FY 2006 was 0.9012. If we were to update the teaching status
adjustment factor for FY 2010 using FY 2007 data, it would increase to
1.0451. If instead we were to average the adjustment factors derived by
using the most recent three years worth of data (FY 2005, FY 2006, and
FY 2007), the proposed teaching status adjustment factor for FY 2010
would be 1.0494. Thus, the proposed teaching status adjustment factor
based on the most recent three years worth of data (FY 2005, FY 2006,
and FY 2007) would be higher than the teaching status adjustment factor
based on one year's worth of data (FY 2007). We note, however, that the
teaching status adjustment factor fluctuates significantly from year to
year over the three year period (FY 2005 through 2007) that we
examined. Using FY 2005, FY 2006, and FY 2007 data, respectively, we
estimate that the teaching status adjustment factors would be 1.5155,
0.6732, and 1.0451, respectively. Such extreme volatility in the
teaching status adjustment factors demonstrates the benefit to IRF
providers of the proposed three year moving average approach because it
mitigates the volatility in provider payments from year to year.
Thus, we propose to use the same methodology developed by RAND in
computing the rural and LIP adjustment factors for the FY 2002 IRF PPS
final rule, and in computing the rural, LIP, and teaching status
adjustment factors for the FY 2006 IRF PPS final rule, to update the
proposed rural, LIP, and teaching status adjustment factors for FY 2010
in this proposed rule. However, we also propose to compute these
updated adjustment factors using each of three years worth of data (FY
2005, FY 2006, and FY 2007) and to average the adjustment factors for
these three years to compute the proposed updates to the adjustment
factors for this proposed rule. To calculate the proposed updates to
the rural, LIP, and teaching status adjustment factors for FY 2010, we
propose to use the following steps:
[Steps 1 and 2 are performed independently for each of three years
of IRF claims data: FY 2005, FY 2006, and FY 2007.]
Step 1. Calculate the average cost per case for each IRF in the IRF
claims data.
Step 2. Use logarithmic regression analysis on average cost per
case to compute the coefficients for the rural, LIP, and teaching
status adjustments.
Step 3. Calculate a simple mean for each of the coefficients across
the three years of data (using logarithms for the LIP and teaching
status adjustment coefficients (because they are continuous variables),
but not for the rural adjustment coefficient (because the rural
variable is either zero (if not rural) or 1 (if rural)). To compute the
LIP and teaching status adjustment factors, we convert these factors
back out of the logarithmic form.
Using the proposed methodology described above, we estimate the
proposed rural adjustment factor for FY 2010 to be 18.27 percent, the
proposed LIP adjustment factor for FY 2010 to be 0.4372, and the
proposed teaching status adjustment factor for FY 2010 to be 1.0494. We
note that we had expected that recent improvements in the CMG relative
weights implemented in FY 2006, FY 2007, and FY 2009 final rules would
more appropriately account for the variation in costs among different
types of IRF patients and thereby reduce the need for the facility-
level adjustments. This appears to be the case with respect to the
decreases in the estimated rural and LIP adjustment factors. The
proposed adjustment factors are subject to change for the final rule if
more recent data become available for use in these analyses.
C. Budget Neutrality Methodology for the Updates to the IRF Facility-
Level Adjustment Factors
Consistent with the way that we implemented changes to the IRF
facility-level adjustment factors (the rural, LIP, and teaching status
adjustment factors) in the FY 2006 IRF PPS final rule (70 FR 47880 and
70 FR 57166), which was the only year in which we updated these
adjustment factors, we propose to make changes to the rural, LIP, and
teaching status adjustment factors for FY 2010 in such a way that total
estimated aggregate payments to IRFs for FY 2010 would be the same with
or without the proposed changes (that is, in a budget neutral manner)
by applying budget neutrality factors for each of these three changes
to the standard payment amount. To calculate the proposed budget
neutrality factors used to update the rural, LIP, and teaching status
adjustment factors, we propose to use the following steps:
Step 1. Using the most recent available data (currently FY 2007),
calculate the estimated total amount of IRF PPS payments that would be
made in FY 2010 (without applying the proposed changes to the rural,
LIP, or teaching status adjustment factors).
Step 2. Calculate the estimated total amount of IRF PPS payments
that would be made in FY 2010 if the proposed update to the rural
adjustment factor were applied.
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2 to determine the proposed budget neutrality factor
(1.0025) that would maintain the same total estimated aggregate
payments in FY 2010 with and without the proposed change to the rural
adjustment factor.
Step 4. Calculate the estimated total amount of IRF PPS payments
that would be made in FY 2010 if the proposed update to the LIP
adjustment factor were applied.
Step 5. Divide the amount calculated in step 1 by the amount
calculated in step 4 to determine the proposed budget neutrality factor
(1.0221) that would maintain the same total estimated aggregate
payments in FY 2010 with and without the proposed change to the LIP
adjustment factor.
Step 6. Calculate the estimated total amount of IRF PPS payments
that would be made in FY 2010 if the proposed update to the teaching
status adjustment factor were applied.
Step 7. Divide the amount calculated in step 1 by the amount
calculated in step 6 to determine the proposed budget neutrality factor
(0.9980) that would maintain the same total estimated aggregate
payments in FY 2010 with and without the proposed change to the
teaching status adjustment factor.
Step 8. Apply the proposed budget neutrality factors for the
updates to the rural, LIP, and teaching status adjustment factors to
the FY 2009 IRF PPS standard payment amount after the application of
the proposed budget neutrality factors for the wage
[[Page 21062]]
adjustment and the CMG relative weights.
The proposed budget neutrality factors for the proposed changes to
the rural, LIP, and teaching status adjustment factors are subject to
change for the final rule if more recent data become available for use
in these analyses or if the proposed payment policies associated with
the proposed budget neutrality factors change.
In section V.C of this proposed rule, we discuss the proposed
methodology for calculating the standard payment conversion factor for
FY 2010.
V. Proposed FY 2010 IRF PPS Federal Prospective Payment Rates
A. Proposed Market Basket Increase Factor and Labor-Related Share for
FY 2010
Section 1886(j)(3)(C) of the Act requires the Secretary to
establish an increase factor that reflects changes over time in the
prices of an appropriate mix of goods and services included in the
covered IRF services, which is referred to as a market basket index.
According to section 1886(j)(3)(A)(i) of the Act, the increase factor
shall be used to update the IRF Federal prospective payment rates for
each FY. Section 115 of the MMSEA amended section 1886(j)(3)(C) of the
Act to apply a zero percent increase factor for FYs 2008 and 2009,
effective for IRF discharges occurring on or after April 1, 2008. In
the absence of any such amendment for FY 2010, we are proposing a
market basket increase factor based upon the most current data
available in accordance with section 1886(j)(3)(A)(i) of the Act.
Beginning with the FY 2006 IRF PPS final rule (70 FR 47908 through
47917), the market basket index used to update IRF payments is a 2002-
based market basket reflecting the operating and capital cost
structures for freestanding IRFs, freestanding inpatient psychiatric
facilities (IPFs), and long-term care hospitals (LTCHs) (hereafter
referred to as the rehabilitation, psychiatric, and long-term care
(RPL) market basket).
Therefore, in FY 2010 we propose to use the same methodology
described in the FY 2006 IRF PPS Final Rule (70 FR 47908 through 47917)
to compute the FY 2010 market basket increase factor and labor-related
share. Using this method and the IHS Global Insight, Inc. forecast for
the first quarter of 2009 of the 2002-based RPL market basket, the
proposed FY 2010 IRF market basket increase factor would be 2.4
percent. IHS Global Insight is an economic and financial forecasting
firm that contracts with CMS to forecast the components of providers'
market baskets. In addition, consistent with historical practice, we
propose to update the market basket increase factor and labor-related
share estimates in the final rule to reflect the most recent available
data.
We also propose to continue to use the methodology described in the
FY 2006 IRF PPS final rule to update the IRF labor-related share for FY
2010 (70 FR 47880, 47908 through 47917). Using this method and the IHS
Global Insight, Inc. forecast for the first quarter of 2009 of the
2002-based RPL market basket, the IRF labor-related share for FY 2010
is the sum of the FY 2010 relative importance of each labor-related
cost category. This figure reflects the different rates of price change
for these cost categories between the base year (FY 2002) and FY 2010.
Consistent with our proposal to update the labor-related share with the
most recent available data, the labor-related share for this proposed
rule reflects IHS Global Insight's first quarter 2009 forecast of the
2002-based RPL market basket. As shown in Table 3, the proposed FY 2010
labor-related share is currently calculated to be 75.904 percent.
Table 3--FY 2010 IRF RPL Labor-Related Share Relative Importance
------------------------------------------------------------------------
FY 2010 IRF labor-
related share
Cost category relative
importance
------------------------------------------------------------------------
Wages and salaries................................... 53.064
Employee benefits.................................... 13.880
Professional fees.................................... 2.894
All other labor intensive services................... 2.123
------------------
Subtotal......................................... 71.961
------------------------------------------------------------------------
Labor-related share of capital costs (.46)........... 3.943
------------------
Total............................................ 75.904
------------------------------------------------------------------------
SOURCE: IHS GLOBAL INSIGHT, INC., 1st QTR, 2009; @USMACRO/CONTROL0209@
CISSIM/TL0209.SIM Historical Data through 4th QTR, 2008.
We are interested in exploring the possibility of creating a stand-
alone IRF market basket that reflects the cost structures of only IRF
providers. To do so, we would propose combining Medicare cost report
data from freestanding IRF providers (which is presently incorporated
into the RPL market basket) and data from hospital-based IRF providers.
As part of our consideration of a stand-alone IRF market basket, we
seek to have a better understanding of differences in costs between
freestanding and hospital-based IRFs. An examination of the Medicare
cost report data for freestanding and hospital-based IRFs reveals
considerable differences in both cost levels and cost structure. We
have reviewed several explanatory variables such as geographic
variation, case mix, urban/rural status, share of low income patients,
teaching status, and outliers (short stay and high-cost); however, we
are currently unable to fully understand the observed cost differences
between these two types of IRF providers. We believe that further
research is required. Having examined the relevant data that is
internal to CMS, we welcome any help from the public in the form of
additional information, data, or suggested data sources that may help
us to better understand the underlying reasons for the variations in
cost structure between freestanding and hospital-based IRFs.
B. Proposed Area Wage Adjustment
Section 1886(j)(6) of the Act requires the Secretary to adjust the
proportion (as estimated by the Secretary from time to time) of
rehabilitation facilities' costs attributable to wages and wage-related
costs by a factor (established by the Secretary) reflecting the
relative hospital wage level in the geographic area of the
rehabilitation facility compared to the national average wage level for
those facilities. The Secretary is required to update the IRF PPS wage
index on the basis of information available to the Secretary on the
wages and wage-related costs to furnish rehabilitation services. Any
adjustments or updates made under section 1886(j)(6) of the Act for a
FY are made in a budget neutral manner.
In the FY 2009 IRF PPS final rule (73 FR 46370 at 46378), we
maintained the methodology described in the FY 2006 IRF PPS final rule
to determine the wage index, labor market area definitions, and hold
harmless policy consistent with the rationale outlined in the FY 2006
IRF PPS final rule (70 FR 47880, 47917 through 47933).
For FY 2010, we propose to maintain the policies and methodologies
described in the FY 2009 IRF PPS final rule relating to the labor
market area definitions and the wage index methodology for areas with
wage data. The FY 2009 hospital wage index defines hospital geographic
areas (labor market areas) based on the definitions of Core-Based
Statistical Areas (CBSAs) established by the Office of Management and
Budget announced in December 2003. It also uses data included in the
wage index derived from the Medicare Cost Report, the Hospital Wage
Index Occupational Mix Survey, hospitals' payroll records, contracts,
and other
[[Page 21063]]
wage-related documentation. However, the IRF wage index does not
include an occupational mix adjustment. In computing the wage index, we
derive an average hourly wage for each labor market area and a national
average hourly wage. A labor market area's wage index value is the
ratio of the area's average hourly wage to the national average hourly
wage. The wage index adjustment factor is applied only to the labor
portion of the standardized amounts. Therefore, this proposed rule
continues to use the CBSA labor market area definitions and the pre-
reclassification and pre-floor hospital wage index data based on 2005
cost report data.
The labor market designations made by the Office of Management and
Budget (OMB), include some geographic areas where there are no
hospitals and, thus, no hospital wage index data on which to base the
calculation of the IRF PPS wage index. We propose to continue to use
the same methodology discussed in the FY 2008 IRF PPS final rule (72 FR
44284 at 44299) to address those geographic areas where there are no
hospitals and, thus, no hospital wage index data on which to base the
calculation of the FY 2010 IRF PPS wage index.
Additionally, this proposed rule incorporates the CBSA changes
published in the most recent OMB bulletin that applies to the hospital
wage data used to determine the current IRF PPS wage index. The changes
were nominal and did not represent substantive changes to the CBSA-
based designations. Specifically, OMB added or deleted certain CBSA
numbers and revised certain titles. The OMB bulletins are available
Online at http://www.whitehouse.gov/omb/bulletins/index.html.
To calculate the wage-adjusted facility payment for the payment
rates set forth in this proposed rule, we multiply the unadjusted
Federal payment rate for IRFs by the proposed FY 2010 RPL labor-related
share (75.904 percent) to determine the labor-related portion of the
standard payment amount. We then multiply the labor-related portion by
the applicable proposed IRF wage index from the tables in the addendum
to this rule. Table 1 is for urban areas, and Table 2 is for rural
areas.
Adjustments or updates to the IRF wage index made under section
1886(j)(6) of the Act must be made in a budget neutral manner. We
propose to calculate a budget neutral wage adjustment factor as
established in the FY 2004 IRF PPS final rule (68 FR 45674 at 45689),
codified at Sec. 412.624(e)(1), as described in the steps below. We
propose to use the listed steps to ensure that the FY 2010 IRF standard
payment conversion factor reflects the update to the proposed wage
indexes (based on the FY 2005 hospital cost report data) and the labor-
related share in a budget neutral manner:
Step 1. Determine the total amount of the estimated FY 2009 IRF PPS
rates, using the FY 2009 standard payment conversion factor and the
labor-related share and the wage indexes from FY 2009 (as published in
the FY 2009 IRF PPS final rule (73 FR 46370 at 44301, 44298, and 44312
through 44335, respectively)).
Step 2. Calculate the total amount of estimated IRF PPS payments
using the FY 2009 standard payment conversion factor and the FY 2010
labor-related share and CBSA urban and rural wage indexes.
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2. The resulting quotient is the proposed FY 2010
budget neutral wage adjustment factor of 1.0010.
Step 4. Apply the proposed FY 2010 budget neutral wage adjustment
factor from step 3 to the FY 2009 IRF PPS standard payment conversion
factor after the application of the estimated market basket update to
determine the proposed FY 2010 standard payment conversion factor.
C. Description of the Proposed IRF Standard Payment Conversion Factor
and Payment Rates for FY 2010
To calculate the proposed standard payment conversion factor for FY
2010, as illustrated in Table 4 below, we begin by applying the
estimated market basket increase factor for FY 2010 (2.4 percent) to
the standard payment conversion factor for FY 2009 ($12,958), which
would equal $13,269. Then, we propose to apply the proposed budget
neutrality factor for the FY 2010 wage index and labor related share of
1.0010, which would result in a standard payment amount of $13,282.
Then, we propose to apply the proposed budget neutrality factor for the
revised CMG relative weights of 1.0004, which would result in a
standard payment amount of $13,287. Finally, we propose to apply the
proposed budget neutrality factors for the updates to the rural, LIP,
and IRF teaching status adjustments of 1.0025, 1.0221, and 0.9980,
respectively, which would result in the proposed FY 2010 standard
payment conversion factor of $13,587.
Table 4--Calculations to Determine the Proposed FY 2010 Standard Payment
Conversion Factor
------------------------------------------------------------------------
Explanation for adjustment Calculations
------------------------------------------------------------------------
Standard Payment Conversion Factor for FY 2009........ $12,958
Estimated Market Basket Increase Factor for FY 2010... x 1.0240
Proposed Budget Neutrality Factor for the Wage Index x 1.0010
and Labor-Related Share..............................
Proposed Budget Neutrality Factor for the Revisions to x 1.0004
the CMG Relative Weights.............................
Proposed Budget Neutrality Factor for the Update to x 1.0025
the Rural Adjustment Factor..........................
Proposed Budget Neutrality Factor for the Update to x 1.0221
the LIP Adjustment Factor............................
Proposed Budget Neutrality Factor for the Update to x 0.9980
the Teaching Status Adjustment Factor................
Proposed FY 2010 Standard Payment Conversion Factor... = $13,587
------------------------------------------------------------------------
After the application of the proposed CMG relative weights
described in section II of this proposed rule, the resulting proposed
unadjusted IRF prospective payment rates for FY 2010 are shown below in
Table 5, ``Proposed FY 2010 Payment Rates.'' The proposed standard
payment conversion factor and the proposed FY 2010 payment rates are
subject to change in the final rule if more recent data become
available for analysis or if any changes are made to any of the
proposed payment policies set forth in this proposed rule.
[[Page 21064]]
Table 5--Proposed FY 2010 Payment Rates
----------------------------------------------------------------------------------------------------------------
Payment rate Payment rate Payment rate Payment rate
CMG tier 1 tier 2 tier 3 no comorbidity
----------------------------------------------------------------------------------------------------------------
0101............................................ $10,444.33 $9,634.54 $8,641.33 $8,214.70
0102............................................ 13,146.78 12,127.76 10,877.75 10,341.07
0103............................................ 15,535.38 14,331.57 12,854.66 12,220.15
0104............................................ 16,531.30 15,251.41 13,679.39 13,002.76
0105............................................ 19,447.07 17,941.63 16,091.08 15,296.24
0106............................................ 22,600.62 20,849.25 18,699.79 17,775.87
0107............................................ 25,754.16 23,758.23 21,309.85 20,256.86
0108............................................ 30,959.34 28,561.23 25,616.93 24,350.62
0109............................................ 29,538.14 27,251.45 24,441.65 23,233.77
0110............................................ 36,972.94 34,108.80 30,592.49 29,081.61
0201............................................ 10,510.90 8,941.60 8,028.56 7,293.50
0202............................................ 14,054.39 11,956.56 10,735.09 9,751.39
0203............................................ 15,862.82 13,495.97 12,116.89 11,006.83
0204............................................ 17,631.85 15,000.05 13,468.79 12,235.09
0205............................................ 21,557.13 18,339.73 16,467.44 14,957.93
0206............................................ 26,736.50 22,746.00 20,423.98 18,553.05
0207............................................ 36,149.57 30,755.53 27,614.22 25,084.32
0301............................................ 14,953.85 12,639.99 11,375.04 10,413.08
0302............................................ 18,962.02 16,028.58 14,422.60 13,205.21
0303............................................ 22,819.37 19,289.46 17,357.39 15,891.36
0304............................................ 31,289.50 26,448.45 23,800.35 21,789.47
0401............................................ 12,584.28 10,834.27 10,419.87 8,930.74
0402............................................ 18,960.66 16,322.06 15,698.42 13,455.21
0403............................................ 31,051.73 26,732.42 25,709.32 22,035.40
0404............................................ 54,501.53 46,918.63 45,123.79 38,674.04
0405............................................ 41,998.78 36,155.01 34,771.85 29,803.08
0501............................................ 11,032.64 8,706.55 8,057.09 7,100.57
0502............................................ 14,975.59 11,817.97 10,936.18 9,638.62
0503............................................ 19,516.37 15,402.22 14,254.12 12,561.18
0504............................................ 23,513.66 18,557.12 17,172.61 15,134.56
0505............................................ 27,807.15 21,944.36 20,308.49 17,896.80
0506............................................ 38,698.49 30,540.86 28,262.32 24,907.69
0601............................................ 12,517.70 10,273.13 9,735.09 8,854.65
0602............................................ 16,770.43 13,763.63 13,040.80 11,861.45
0603............................................ 21,350.61 17,523.15 16,603.31 15,101.95
0604............................................ 28,364.22 23,278.61 22,058.49 20,062.56
0701............................................ 12,360.09 10,493.24 9,921.23 8,888.62
0702............................................ 16,368.26 13,896.78 13,139.99 11,771.78
0703............................................ 20,040.83 17,015.00 16,088.37 14,414.45
0704............................................ 25,600.63 21,735.12 20,551.70 18,413.10
0801............................................ 9,442.97 7,735.08 7,032.63 6,395.40
0802............................................ 12,656.29 10,368.24 9,426.66 8,572.04
0803............................................ 18,067.99 14,801.68 13,456.56 12,237.81
0804............................................ 15,834.29 12,971.51 11,793.52 10,724.22
0805............................................ 19,771.80 16,197.06 14,725.59 13,391.35
0806............................................ 24,512.31 20,080.23 18,255.49 16,601.96
0901............................................ 11,433.46 10,307.10 9,285.36 8,191.60
0902............................................ 15,282.66 13,777.22 12,411.72 10,949.76
0903............................................ 19,763.65 17,816.63 16,050.32 14,160.37
0904............................................ 26,153.62 23,576.16 21,240.56 18,737.83
1001............................................ 12,766.35 12,418.52 10,653.57 9,769.05
1002............................................ 16,957.93 16,495.98 14,152.22 12,975.59
1003............................................ 24,619.64 23,949.80 20,546.26 18,838.38
1101............................................ 16,275.87 13,400.86 13,400.86 11,535.36
1102............................................ 23,752.79 19,557.13 19,557.13 16,832.93
1201............................................ 14,232.38 13,069.34 11,584.28 10,309.82
1202............................................ 17,750.06 16,301.68 14,448.42 12,858.74
1203............................................ 22,345.18 20,520.45 18,188.92 16,187.55
1301............................................ 15,013.64 13,529.93 11,524.49 10,304.38
1302............................................ 20,278.60 18,275.87 15,565.27 13,917.16
1303............................................ 26,301.71 23,702.52 20,187.56 18,050.33
1401............................................ 10,986.45 9,998.67 8,815.25 7,794.86
1402............................................ 15,082.93 13,728.30 12,101.94 10,702.48
1403............................................ 18,399.52 16,745.98 14,763.63 13,055.75
1404............................................ 23,887.30 21,741.92 19,167.18 16,949.78
1501............................................ 13,229.66 11,600.58 10,199.76 9,699.76
1502............................................ 16,857.39 14,781.30 12,995.97 12,360.09
1503............................................ 21,345.18 18,717.45 16,456.57 15,650.87
1504............................................ 26,720.19 23,430.78 20,600.61 19,591.10
1601............................................ 14,938.91 12,120.96 10,364.16 9,585.63
1602............................................ 20,152.24 16,350.60 13,981.02 12,932.11
[[Page 21065]]
1603............................................ 25,911.77 21,023.17 17,976.96 16,627.77
1701............................................ 14,226.95 12,584.28 11,525.85 10,157.64
1702............................................ 18,603.32 16,453.86 15,070.70 13,282.65
1703............................................ 22,390.02 19,803.05 18,138.65 15,985.11
1704............................................ 28,130.52 24,880.51 22,789.48 20,084.30
1801............................................ 16,697.06 13,150.86 12,360.09 10,649.49
1802............................................ 25,063.94 19,739.19 18,553.05 15,986.46
1803............................................ 42,891.44 33,780.00 31,748.74 27,357.42
1901............................................ 15,173.96 12,391.34 12,391.34 11,739.17
1902............................................ 30,919.94 25,251.44 25,251.44 23,922.63
1903............................................ 49,119.72 40,112.90 40,112.90 38,002.84
2001............................................ 11,953.84 9,892.69 8,985.08 8,046.22
2002............................................ 16,100.60 13,324.77 12,101.94 10,838.35
2003............................................ 20,663.11 17,099.24 15,531.30 13,907.65
2004............................................ 27,630.52 22,865.56 20,769.09 18,597.89
2101............................................ 30,713.41 30,713.41 26,584.32 22,884.58
5001............................................ .............. .............. .............. 1,990.50
5101............................................ .............. .............. .............. 9,168.51
5102............................................ .............. .............. .............. 20,786.75
5103............................................ .............. .............. .............. 9,629.11
5104............................................ .............. .............. .............. 27,160.41
----------------------------------------------------------------------------------------------------------------
D. Example of the Methodology for Adjusting the Proposed Federal
Prospective Payment Rates
Table 6 illustrates the methodology for adjusting the proposed
Federal prospective payments (as described in sections V.A through V.C
of this proposed rule). The examples below are based on two
hypothetical Medicare beneficiaries, both classified into CMG 0110
(without comorbidities). The proposed unadjusted Federal prospective
payment rate for CMG 0110 (without comorbidities) appears in Table 5
above.
One beneficiary is in Facility A, an IRF located in rural Spencer
County, Indiana, and another beneficiary is in Facility B, an IRF
located in urban Harrison County, Indiana. Facility A, a rural non-
teaching hospital has a DSH percentage of 5 percent (which would result
in a LIP adjustment of 1.0216), a wage index of 0.8473, and a rural
adjustment of 18.27 percent. Facility B, an urban teaching hospital,
has a DSH percentage of 15 percent (which would result in a LIP
adjustment of 1.0630), a wage index of 0.9249, and a teaching status
adjustment of 0.0706.
To calculate each IRF's labor and non-labor portion of the proposed
Federal prospective payment, we begin by taking the proposed unadjusted
Federal prospective payment rate for CMG 0110 (without comorbidities)
from Table 5 above. Then, we multiply the estimated labor-related share
(75.904) described in section V.A of this proposed rule by the proposed
unadjusted Federal prospective payment rate. To determine the non-labor
portion of the proposed Federal prospective payment rate, we subtract
the labor portion of the proposed Federal payment from the proposed
unadjusted Federal prospective payment.
To compute the proposed wage-adjusted Federal prospective payment,
we multiply the labor portion of the proposed Federal payment by the
appropriate wage index found in the addendum in Tables 1 and 2. The
resulting figure is the wage-adjusted labor amount. Next, we compute
the proposed wage-adjusted Federal payment by adding the wage-adjusted
labor amount to the non-labor portion.
Adjusting the proposed wage-adjusted Federal payment by the
facility-level adjustments involves several steps. First, we take the
wage-adjusted Federal prospective payment and multiply it by the
appropriate rural and LIP adjustments (if applicable). Second, to
determine the appropriate amount of additional payment for the teaching
status adjustment (if applicable), we multiply the teaching status
adjustment (1.0706, in this example) by the wage-adjusted and rural-
adjusted amount (if applicable). Finally, we add the additional
teaching status payments (if applicable) to the wage, rural, and LIP-
adjusted Federal prospective payment rates. Table 6 illustrates the
components of the adjusted payment calculation.
Table 6--Example of Computing the Proposed IRF FY 2010 Federal
Prospective Payment
------------------------------------------------------------------------
Urban facility B
Steps Rural facility A (Harrison Co.,
(Spencer Co., IN) IN)
------------------------------------------------------------------------
1.......... Unadjusted Federal $29,081.61 $29,081.61
Prospective Payment.
2.......... Labor Share.......... x 0.75904 x 0.75904
3.......... Labor Portion of = $22,074.11 = $22,074.11
Federal Payment.
4.......... CBSA Based Wage Index x 0.8473 x 0.9249
(shown in the
Addendum, Tables 1
and 2).
5.......... Wage-Adjusted Amount. = $18,703.39 = $20,416.34
6.......... Nonlabor Amount...... + $7,007.50 + $7,007.50
7.......... Wage-Adjusted Federal = $25,710.89 = $27,423.84
Payment.
8.......... Rural Adjustment..... x 1.1827 x 1.000
9.......... Wage- and Rural- = $30,408.27 = $27,423.84
Adjusted Federal
Payment.
10......... LIP Adjustment....... x 1.0216 x 1.0630
11......... FY 2010 Wage-, Rural- = $31,065.09 = $29,151.55
and LIP-Adjusted
Federal Prospective
Payment Rate.
12......... FY 2010 Wage- and $30,408.27 $27,423.84
Rural-Adjusted
Federal Prospective
Payment.
[[Page 21066]]
13......... Teaching Status x 0.000 x 0.0706
Adjustment.
14......... Teaching Status = $0.00 = $1,936.12
Adjustment Amount.
15......... FY2010 Wage-, Rural-, + $31,065.09 + $29,151.55
and LIP-Adjusted
Federal Prospective
Payment Rate.
16......... Total FY 2010 = $31,065.09 = $31,087.67
Adjusted Federal
Prospective Payment.
------------------------------------------------------------------------
Thus, the proposed adjusted payment for Facility A would be
$31,065.09 and the proposed adjusted payment for Facility B would be
$31,087.67.
VI. Proposed Update to Payments for High-Cost Outliers Under the IRF
PPS
A. Proposed Update to the Outlier Threshold Amount for FY 2010
Section 1886(j)(4) of the Act provides the Secretary with the
authority to make payments in addition to the basic IRF prospective
payments for cases incurring extraordinarily high costs. A case
qualifies for an outlier payment if the estimated cost of the case
exceeds the adjusted outlier threshold. We calculate the adjusted
outlier threshold by adding the IRF PPS payment for the case (that is,
the CMG payment adjusted by all of the relevant facility-level
adjustments) and the adjusted threshold amount (also adjusted by all of
the relevant facility-level adjustments). Then, we calculate the
estimated cost of a case by multiplying the IRF's overall cost-to-
charge ratio (CCR) by the Medicare allowable covered charge. If the
estimated cost of the case is higher than the adjusted outlier
threshold, we make an outlier payment for the case equal to 80 percent
of the difference between the estimated cost of the case and the
outlier threshold.
In the FY 2002 IRF PPS final rule (66 FR 41316, 41362 through
41363), we discussed our rationale for setting the outlier threshold
amount for the IRF PPS so that estimated outlier payments would equal 3
percent of total estimated payments. For the 2002 IRF PPS final rule,
we analyzed various outlier policies using 3, 4, and 5 percent of the
total estimated payments, and we concluded that an outlier policy set
at 3 percent of total estimated payments would optimize the extent to
which we could reduce the financial risk to IRFs of caring for high-
cost patients, while still providing for adequate payments for all
other (non-high cost outlier) cases.
Subsequently, we updated the IRF outlier threshold amount in the
FYs 2006, 2007, 2008, and 2009 IRF PPS final rules (70 FR 47880, 70 FR
57166, 71 FR 48354, 72 FR 44284, and 73 FR 46370, respectively) to
maintain estimated outlier payments at 3 percent of total estimated
payments. We also stated in the FY 2009 final rule (FR 73 46287) that
we would continue to analyze the estimated outlier payments for
subsequent years and adjust the outlier threshold amount as appropriate
to maintain the 3 percent target.
For FY 2010, we are proposing to use updated data for calculating
the high-cost outlier threshold amount. Specifically, we propose to use
FY 2007 claims data using the same methodology that we used to set the
initial outlier threshold amount in the FY 2002 IRF PPS final rule (66
FR 41316, 41362 through 41363), which is also the same methodology that
we used to update the outlier threshold amounts for FYs 2006 through
2009.
Based on an analysis of updated FY 2007 claims data, we estimate
that IRF outlier payments as a percentage of total estimated payments
are 2.8 percent in FY 2009.
Based on the updated analysis of the most recent available claims
data (FY 2007), we propose to update the outlier threshold amount to
$9,976 to maintain estimated outlier payments at 3 percent of total
estimated aggregate IRF payments for FY 2010.
The proposed outlier threshold amount of $9,976 for FY 2010 is
subject to change in the final rule if more recent data become
available for analysis or if any changes are made to any of the other
proposed payment policies set forth in this proposed rule.
B. Proposed Update to the IRF Cost-to-Charge Ratio Ceilings
In accordance with the methodology stated in the FY 2004 IRF PPS
final rule (68 FR 45674, 45692 through 45694), we apply a ceiling to
IRFs' cost-to-charge ratios (CCRs). Using the methodology described in
that final rule, we propose to update the national urban and rural CCRs
for IRFs, as well as the national CCR ceiling for FY 2010, based on
analysis of the most recent data that is available. We apply the
national urban and rural CCRs in the following situations:
New IRFs that have not yet submitted their first Medicare
cost report.
IRFs whose overall CCR is in excess of the national CCR
ceiling for FY 2010, as discussed below.
Other IRFs for which accurate data to calculate an overall
CCR are not available.
Specifically, for FY 2010, we estimate a proposed national average
CCR of 0.621 for rural IRFs, which we calculate by taking an average of
the CCRs for all rural IRFs using their most recently submitted cost
report data. Similarly, we estimate a proposed national CCR of 0.493
for urban IRFs, which we calculate by taking an average of the CCRs for
all urban IRFs using their most recently submitted cost report data. We
apply weights to both of these averages using the IRFs' estimated
costs, meaning that the CCRs of IRFs with higher costs factor more
heavily into the averages than the CCRs of IRFs with lower costs. For
this proposed rule, we have used the most recent available cost report
data (FY 2007). This includes all IRFs whose cost reporting periods
begin on or after October 1, 2006, and before October 1, 2007. If, for
any IRF, the FY 2007 cost report was missing or had an ``as submitted''
status, we used data from a previous fiscal year's settled cost report
for that IRF. However, we do not use cost report data from before FY
2004 for any IRF because changes in IRF utilization since FY 2004
resulting from the ``60 percent'' rule and IRF medical review
activities mean that these older data do not adequately reflect the
current cost of care.
In addition, in light of the analysis described below, we propose
to set the national CCR ceiling at 3 standard deviations above the mean
CCR. The national CCR ceiling is set at 1.60 for FY 2010. This means
that, if an individual IRF's CCR exceeds this ceiling of 1.60 for FY
2010, we would replace the IRF's CCR with the appropriate national
average CCR (either rural or urban, depending on the geographic
location of the IRF). We estimate the national CCR ceiling by:
Step 1. Taking the national average CCR (weighted by each IRF's
total costs, as discussed above) of all IRFs for which we have
sufficient cost report data (both rural and urban IRFs combined);
[[Page 21067]]
Step 2. Estimating the standard deviation of the national average
CCR computed in step 1;
Step 3. Multiplying the standard deviation of the national average
CCR computed in step 2 by a factor of 3 to compute a statistically
significant reliable ceiling; and
Step 4. Adding the result from step 3 to the national average CCR
of all IRFs for which we have sufficient cost report data, from step 1.
We note that the proposed national average rural and urban CCRs and
our estimate of the national CCR ceiling in this section are subject to
change in the final rule if more recent data become available for use
in these analyses.
VII. Inpatient Rehabilitation Facility (IRF) Classification and Payment
Requirements
Prior to the introduction of the Inpatient Prospective Payment
System (IPPS) in 1983, hospital care was reimbursed on a cost basis.
Beneficiaries who required closely supervised, resource intensive
rehabilitation services, in addition to the treatment of the acute care
condition for which they were hospitalized, generally received these
rehabilitation services as part of the same inpatient hospital stay
that addressed their acute care needs. With the introduction of the
prospective payment methodology, we developed Diagnostic Related Groups
(DRGs) for classifying acute hospital stays. We found that DRGs did not
fully address the variability of the rehabilitation portion of a
hospital stay. Thus, in 1983, we established coverage for post-acute
hospital level rehabilitation services that were excluded from the IPPS
and reimbursed on a cost basis.
At that time, we established payment requirements that reimbursed
rehabilitation units and free-standing rehabilitation hospitals as IRFs
rather than as hospitals subject to the IPPS. The payment requirements
governing free-standing IRFs can be found in Sec. 412.23. Similar
requirements for hospital rehabilitation units classified as IRFs can
be found in Sec. 412.29. To provide further guidance on our
implementation of Sec. 412.23(b)(3) through (b)(7) and Sec. 412.29(b)
through (f), we issued a HCFA Ruling, HCFAR 85-2-1, at 50 FR 31040. It
outlines the criteria for Medicare coverage of inpatient hospital
rehabilitation services.
These regulatory payment requirements and the policies outlined in
HCFAR 85-2 were the basis for the policies currently contained in
Chapter 1, Section 110 of the Medicare Benefit Policy Manual (MBPM),
which provides further instructions applicable to IRFs. In this rule,
we are proposing regulatory changes to certain regulations. The final
changes will be incorporated into revised manual provisions that will
be placed in an updated Chapter 1, Section 110 of the MBPM. The
proposed regulatory changes, and the conforming manual provisions that
would provide policy instructions on these regulatory provisions, would
reflect the changes that have occurred in medical practice during the
past 25 years as well as the implementation of the inpatient
rehabilitation facility prospective payment system (IRF PPS). We also
propose to rescind the outdated HCFA Ruling 85-2 since it is
inconsistent with the current payment system.
A. Analysis of Current IRF Classification and Payment Requirements
The payment requirements and coverage policies that currently
govern IRFs were developed more than 25 years ago, and were designed to
provide instructions for a small subset of providers furnishing
intensive and complex therapy services in a fee-for-service environment
to a small segment of patients whose rehabilitation needs could only be
safely furnished at a hospital level of care. At that time about 350
IRFs were treating a relatively homogeneous patient group with similar
health conditions and deficit levels, that is, approximately 54,000
Medicare patients per year being treated primarily for stroke and other
severe neurological disorders. However, advances in health care
technology and treatments, in combination with the 2002 introduction of
a new IRF PPS, contributed to a rapid increase in the type and volume
of IRF services. By 2007, there were over 1,200 IRFs treating
approximately 400,000 Medicare cases per year for a broader range of
conditions. By 2007, the types of cases being treated in IRFs had also
become more heterogeneous as almost a third of IRF patients were
treated for orthopedic, rather than neurological, conditions.
Rehabilitation services of varying intensity and duration are
beneficial to beneficiaries with a broad range of conditions, but
rehabilitation can be provided in a range of settings. It has become
apparent that the existing IRF payment requirements and instructions do
not always enable us to distinguish between patients who require
complex, high intensity rehabilitation care in a hospital environment
and those patients whose rehabilitation needs can be met in less
intensive settings.
In the absence of clear, up-to-date instructions on determining and
documenting the medical necessity of IRF care, different stakeholders
(including providers, FIs, and, most recently, Recovery Audit
Contractors (RACs)) have developed different and sometimes conflicting
interpretations of how our existing payment requirements and policies
apply to the determination of IRF medical necessity. Recently, the
differing interpretations of these requirements have led to a high
volume of IRF claims denials by Medicare contractors as well as
concerns about the effects of the claims denials on the IRF industry
and on beneficiaries' access to IRF care.
In response to these concerns, CMS assembled an internal workgroup
in June 2007 to determine how best to clarify IRF classification and
payment requirements and make corresponding revisions to the
regulations and manual instructions. The workgroup enlisted the advice
of medical directors from within CMS, from several of the fiscal
intermediaries, from one of the qualified independent contractors
(QICs), and from the National Institutes of Health. These individuals,
including general physicians, physiatrists, and therapists, considered
how best to identify those patients for whom IRF coverage was intended,
that is, patients who both require complex rehabilitation in a hospital
environment and could most reasonably be expected to benefit from IRF
services.
In addition, we received comments from industry groups in response
to the FY 2009 IRF PPS proposed rule (73 FR 22674). These commenters
requested that we revise and update IRF coverage policy so that all
stakeholders would have a clear understanding of CMS policy and the
expectations of CMS contractors charged with performing medical review
to validate claims payment.
Finally, the Medicare, Medicaid, and SCHIP Extension Act of 2007
(MMSEA), Pub. L. 110-173, mandated at section 115(c)(1) that the
Secretary evaluate IRF access and utilization issues. In so doing,
section 115(c)(1) of the MMSEA required that the Secretary obtain input
from a broad range of stakeholders. While a full report on our findings
is beyond the scope of this proposed rule, we have carefully considered
those findings and the stakeholder comments in framing this proposed
revision to the IRF classification and payment regulations and the
conforming amendments to the MBPM. A formal report on our findings in
response to section 115(c)(1) of the MMSEA will be included in a Report
to Congress.
[[Page 21068]]
B. Summary of the Major Proposed Revisions and New Requirements
In this proposed rule, we are proposing to amend certain
regulations for the purpose of providing greater clarity and rescind
the outdated HCFAR 85-2-1 to ensure that our policies reflect current
medical practice and the needs of the current IRF PPS. Proposed changes
to the existing classification and payment requirements are presented
in sections VII.C and VII.D of this rule. We intend to redraft the
corresponding manual provisions found in Chapter 1, Sec. 110 of the
MBPM to make conforming changes. A copy of the revised draft of Section
110 of the MBPM has been posted on the Medicare IRF PPS Web site at
http://www.cms.hhs.gov/InpatientRehabFacPPS/02_Spotlight.asp#TopOfPag.
We encourage stakeholder comment on the proposed changes to the
classification and payment requirements. We are also requesting
separate comments on the draft revisions to the MBPM. While CMS will
address comments on the proposed changes to the regulation in the final
rule, it is beyond the scope of the final rule to address all of the
separate comments on the draft revisions to the MBPM in the final rule.
We will instead address the separate comments on the draft revisions to
the MBPM on the Medicare IRF PPS Web site at http://www.cms.hhs.gov/
InpatientRehabFacPPS/02_Spotlight.asp#TopOfPag.
The IRF PPS is a per-stay, case-mix adjusted prospective payment
system. However, the policies on which we base our medical necessity
claims reviews for IRFs were developed more than 25 years ago for a
cost-based, per diem system. The proposed revisions in this rule
recognize that a potential patient's likely post-admission performance
is subject to many factors outside the IRF's control. Therefore, these
revisions focus on the key decision points that should be considered
and documented when making a decision to admit, retain, or discharge a
patient. Thus, we focus the proposed regulatory and conforming manual
changes on the processes rehabilitation physicians use to make
admission, continued stay, and discharge decisions. In sections VII.C
through VII.D below, we provide more detail on these revisions and the
reasoning behind each of the revisions. In summary, the major proposed
revisions are as follows:
1. Redesignating and expanding the existing requirements at Sec.
412.23(b)(4) and Sec. 412.29(c) in a new Sec. 412.29(a) to require
that IRFs provide rehabilitation nursing, physical therapy,
occupational therapy, speech-language pathology, social services,
psychological services, and prosthetic and orthotic services using
qualified personnel and adding to those requirements that these
services be ordered by a rehabilitation physician.
2. Redesignating and expanding the existing requirements at Sec.
412.23(b)(3) and Sec. 412.29(b) in a new Sec. 412.29(b)(2) to require
that IRFs conduct a comprehensive preadmission screening to evaluate
the appropriateness of IRF-level care. The requirements for a
preadmission screening process are discussed in section VII.C of this
rule and detailed instructions are presented in section 110.1.1 of the
draft MBPM.
3. Establishing a new post-admission evaluation requirement at
Sec. 412.29(c)(1) to document the status of the patient after
admission to the IRF, to compare it to that noted in the preadmission
screening documentation, and to begin development of the patient's
overall plan of care. The overall plan of care would be required to be
completed with input from all of the interdisciplinary team members.
The preadmission and post-admission evaluations document the
appropriateness of an admission and then serve as a basis for the
development of the overall plan of care. The requirements for a post-
admission evaluation are discussed in section VII.D of this rule, and
detailed instructions are presented in section 110.1.2 of the draft
MBPM.
4. Redesignating and expanding the existing requirements at Sec.
412.23 (b)(6) and Sec. 412.29(d) for an overall plan of care at the
new Sec. 412.29(c)(2) to establish the responsibility of the
rehabilitation physician in the care planning process. The requirements
for an overall plan of care are discussed in section VII.D of this
rule, and detailed instructions are presented in section 110.1.3 of the
draft MBPM.
5. Redesignating and revising the regulatory requirements at
412.23(b)(7) and 412.29(e) governing a multidisciplinary team and the
required team meetings at the new Sec. 412.29(d) to require an
interdisciplinary team, to define the members of the interdisciplinary
team, to define the minimum content to be covered at the team meetings,
and to specify the expected frequency of the team meetings. We propose
to require that team meetings be held at least once every week, rather
than once every two weeks. The requirements governing interdisciplinary
team meetings are discussed in section VII.E of this rule, and detailed
instructions are presented in section 110.2.2 of the draft MBPM.
C. Proposed IRF Admission Requirements
IRFs provide intensive rehabilitation services through a
coordinated interdisciplinary team of skilled professionals, based upon
physician orders that document the need for intensive rehabilitation
services. Thus, we believe that a patient appropriate for admission to
an IRF should be able and willing to actively participate in an
intensive rehabilitation program that is provided through a coordinated
interdisciplinary team approach in an inpatient hospital setting.
Further, the patient should also be expected to make measurable
improvement that will be of practical value in terms of improving the
patient's functional capacity or adaptation to impairments.
We believe that the use of the term ``interdisciplinary team''
instead of ``multidisciplinary team'' (as is currently required at
Sec. 412.23(b)(7) and Sec. 412.29(e)) more accurately reflects the
care provided in an IRF. A multidisciplinary team approach to care
requires only that clinicians representing various rehabilitation
disciplines individually work with the patient to achieve an optimal
level of functioning. However, with each clinician working
independently, the patient loses the benefits of the coordinated care
approach offered in IRFs.
In contrast, the interdisciplinary team approach to care requires
that treating clinicians interact with each other and the patient to
define a set of coordinated goals for the IRF stay and work together in
a cooperative manner to deliver the services necessary to achieve these
goals. As a result, we believe that the use of an interdisciplinary
team instead of a multidisciplinary team will ensure that patients
achieve better outcomes. Therefore, we are proposing that the IRF shall
ensure that each patient's treatment is managed using a coordinated
interdisciplinary approach to treatment.
We believe that patients who have completed their acute care
hospital stay, but do not need or are not able or willing to
participate in the level of intensive rehabilitation provided in an
inpatient setting, should be referred to a less-intensive
rehabilitation setting.
We believe that a comprehensive preadmission screening process is
the key factor in initially identifying appropriate candidates for IRF
care. For this reason, we are proposing (at Sec. 412.29(b)(2)) to
clarify our expectations regarding the scope of the preadmission
assessment and to require documentation of the clinical evaluation
[[Page 21069]]
process that must form the basis of the admission decision. The
detailed preadmission screening requirements, including instructions
for documenting the decision-making process used to determine the
appropriateness of an IRF admission, are presented in detail in the
draft MBPM. In accordance with the proposed regulations, the
comprehensive preadmission screening must include an evaluation of the
following proposed requirements that a patient must meet to be admitted
to an IRF (see proposed Sec. 412.29(b)):
1. Whether the patient's condition is sufficiently stable to allow
the patient to actively participate in an intensive rehabilitation
program.
We recognize that there are strong financial incentives for acute
care hospitals to discharge patients whose care is covered by IPPS as
quickly as possible to IRFs for post-acute rehabilitation care. We
believe that these incentives for early discharge could have negative
consequences on patient care and on the total cost of care. For
example, patients who are transferred to the IRF setting before they
are adequately stabilized may later need to be re-hospitalized for
treatment of the same acute condition or a complication that arose
during the original hospital stay. Therefore, we are proposing to
require that the patient be sufficiently stable at the time of
admission to allow the patient to actively participate in an intensive
rehabilitation program.
2. Whether the patient has the appropriate therapy needs for
placement in an IRF.
Since one of the critical aspects of care provided in an IRF is the
provision of interdisciplinary care, we are proposing (at Sec.
412.29(b)(1)(i)) to require that, at the time of admission to the IRF,
the patient require the active and ongoing therapeutic intervention of
at least two therapy disciplines (physical therapy, occupational
therapy, speech-language pathology, or prosthetics/orthotics therapy),
one of which must be physical or occupational therapy.
3. Whether the patient requires the intensive services of an
inpatient rehabilitation setting.
Another critical aspect of care provided in an IRF, versus another
post-acute care setting, is that IRFs generally provide at least 3
hours of therapy per day at least 5 days per week. To conform to this
standard, we propose (at Sec. 412.29(b)(1)(ii)) to require that
patients generally require and reasonably be expected to actively
participate in at least 3 hours of therapy per day at least 5 days per
week, and be expected to make measurable improvement that will be of
practical value to improve the patient's functional capacity or
adaptation to impairments. In addition, we are proposing (at Sec.
412.29(b)(1)(ii)) to require that therapy treatments begin within 36
hours after the patient's admission to the IRF, to conform with IRF
best practices and to ensure that the patient's care goals can be met.
Patients who are unwilling or unable to tolerate this intense level
of therapy should be referred to another setting of care that is more
appropriate to their medical needs, such as SNFs, long-term care
hospitals, or home health agencies, where the patient can receive more
appropriate levels of rehabilitation therapy and other forms of care.
At the same time, we recognize that a patient's condition may vary
during the course of the stay. Therefore, in the MBPM we provide
instructions on the procedures that should be followed to document
cases in which therapy can be reduced or suspended for brief periods of
time.
Also, we note that many IRF patients will medically benefit from
more than 3 hours of therapy per day. Therefore, the 3 hour per day
requirement is intended to be a minimum number of hours of therapy
provided in an IRF, not a maximum. However, for the safety of the
patient, we note that the intensity of therapy provided must never
exceed the patient's level of tolerance or compromise the patient's
safety.
In addition, while the requirement that IRFs ``ensure that the
patients receive close medical supervision'' has been in effect since
the mid-1980s, it has recently raised confusion among IRFs and Medicare
contractors. Since this criterion currently found at 42 CFR
412.23(b)(4) and 412.29(c) has not been well-defined, it has been
unclear how an IRF would document that close medical supervision was
either needed by a patient or provided by the IRF. The need for
physician supervision cannot be inferred retroactively from the
presence or absence of an acute medical complication during the IRF
stay. Similarly, the need for close medical supervision cannot
generally be inferred from the presence or absence of frequent
physician orders. Instead, we are proposing to include an evaluation of
each patient's risk for clinical complications as part of the
preadmission screening. Candidates for IRF admission should be assessed
to ascertain the presence of risk factors requiring a level of
physician supervision similar to the physician involvement generally
expected in an acute inpatient environment, as compared with other
settings of care. While the need for physician supervision will vary
with each patient, we are proposing that the close medical supervision
requirement would generally be met by having a rehabilitation
physician, or other licensed treating physician with specialized
training and experience in inpatient rehabilitation, conduct face-to-
face visits with the patient a minimum of at least 3 days per week
throughout the patient's stay. The purpose of the face-to-face visits
is to assess the patient both medically and functionally, as well as to
modify the course of treatment as needed to maximize the patient's
capacity to benefit from the rehabilitation process.
It is critical to capture the preadmission screening information as
closely as possible to the actual time of the IRF admission, so that
the information provides a reliable picture of the patient's condition
at the time of admission. For this reason, we propose to require (at
Sec. 412.29(b)(2)(i)) that the preadmission screening be conducted by
a qualified clinician(s) designated by a rehabilitation physician
within the 48 hours immediately preceding the IRF admission, to give
the most accurate picture of the patient upon admission to the IRF.
Further, we are proposing to require (at Sec. 412.29(b)(2)(v)) that
the preadmission screening documentation must be retained in the
patient's medical record. We would expect that the reasons that the IRF
clinical staff believe that the patient meets all of the required
criteria for admission to the IRF would be included in the preadmission
screening documentation. The MBPM will include more detailed
instructions on the types of information required by the preadmission
screening.
We are also proposing (at Sec. 412.29(b)(2)(iv)) to require that a
rehabilitation physician review and document his or her concurrence
with the findings and results of the preadmission screening. By
``rehabilitation physician,'' we mean a licensed physician with
specialized training and experience in rehabilitation. This requirement
ensures that the appropriate admission decision will be made by a
physician with specialized knowledge of rehabilitation therapies and
will be based on the best available information about the patient's
condition.
Finally, since the proposed preadmission screening must be detailed
and comprehensive for every patient, we do not believe that there will
be a continued need for an extensive post-admission assessment period
which, when the current manual was written over two decades ago, was
used to evaluate the need for IRF care. Therefore, we intend to delete
the post-
[[Page 21070]]
admission evaluation period that is currently described in subsection
110.3 of the MBPM (rev. October 1, 2003) and replace it with more
detailed instructions on continued stay and discharge policies as
demonstrated in the draft MBPM.
By establishing these requirements, we recognize the importance of
the professional judgment of a rehabilitation physician in the review
of the preadmission screen at the time an admission decision is made.
This information is more useful in reviewing the IRF admission decision
than aspects of the IRF stay that would either be unknown or outside
the control of the rehabilitation physician at the time of admission.
D. Proposed Post-Admission Requirements
It is the IRF's responsibility to initiate care as soon as the
patient is admitted. To make accurate care planning decisions, the
rehabilitation physician and interdisciplinary care team need to verify
that the information obtained during the preadmission screen is still
accurate. This post-admission evaluation also documents the physician
decision-making process, and will provide additional insight to CMS in
the program oversight process.
1. Post-Admission Evaluation: Once a patient has been admitted to
an IRF, it is the responsibility of the rehabilitation physician with
input from the interdisciplinary team to identify any relevant changes
that may have occurred since the preadmission screening. Therefore,
consistent with current industry practice, we propose to add a
requirement (at Sec. 412.29(c)(1)) for a post-admission evaluation by
a rehabilitation physician within 24 hours of admission. The purpose of
the post-admission evaluation is to document the patient's status on
admission to the IRF, compare it to that noted in the preadmission
screening documentation, and begin development of the patient's
expected course of treatment that will be completed with input from all
of the interdisciplinary team members in the overall plan of care. The
results of the post-admission evaluation may result in a change from
the preadmission conclusion that the patient is appropriate for IRF
care. In such cases, appropriate steps should be taken. We propose to
require that this document be retained in the patient's medical record.
Please see section 110.1.2 of the draft MBPM for more detailed
instructions on this proposal.
2. Individualized Overall Plan of Care: The overall plan of care is
essential to providing high-quality care in IRFs. Comprehensive
planning of the patient's course of treatment in the early stages of
the stay leads to a more coordinated delivery of services to the
patient, and such coordinated care is a critical aspect of the care
provided in IRFs. The current regulations do not define the term
``overall plan of care,'' provide any instructions on the information
required in the overall plan of care, or require it to be retained in
the patient's medical record. We propose to require retention of the
overall plan of care at the new section 412.29(c)(2)(ii). Furthermore,
we intend to provide instructions on overall plans of care as seen in
section 110.1.3 of the draft manual. Such detail would provide CMS with
the information necessary for program review activities.
We believe that it is critical that a rehabilitation physician be
responsible for developing the overall plan of care, with substantial
input from the interdisciplinary team. We also believe that the
physician-generated overall plan of care must be individualized to the
unique needs of the patient, to ensure that each patient's individual
care goals can be met.
Therefore, we are proposing (at Sec. 412.29(c)(2)) to require that
an individualized overall plan of care be developed for each IRF
admission by a rehabilitation physician with input from the
interdisciplinary team within 72 hours of the patient's admission to
the IRF, and be retained in the patient's medical record.
E. Proposed Changes to the Requirements for the Interdisciplinary Team
Meeting
As mentioned earlier in this proposed rule, we believe that
interdisciplinary services, by definition, cannot be provided by only
one discipline. The purpose of the interdisciplinary team meeting is to
foster communication among disciplines to establish, prioritize, and
achieve treatment goals.
Currently, we require team meetings at least once every two weeks.
However, the length of many IRF stays has decreased significantly since
this requirement was established. We believe that the biweekly meeting
requirement is inadequate to ensure the appropriate establishment and
achievement of treatment goals. Therefore, we propose at (Sec.
412.29(d)(2)) to increase the required frequency of the
interdisciplinary team meetings to at least once per week to reflect
current best practices in IRFs.
Also, to improve the effectiveness and coordination of the care
provided to IRF patients and to better reflect best practices in IRFs,
we propose (at Sec. 412.29(d)(1)) to broaden the requirements
regarding the professional staff that are expected to participate in
the interdisciplinary team meetings. We propose that, at a minimum, the
interdisciplinary team must consist of professionals from the following
disciplines (each of whom must have current knowledge of the
beneficiary as documented in the medical record):
A rehabilitation physician with specialized training and
experience in rehabilitation services;
A registered nurse with specialized training or experience
in rehabilitation;
A social worker or a case manager (or both); and
A licensed or certified therapist from each therapy
discipline involved in treating the patient.
Although the purpose of the proposed requirement for
interdisciplinary team meetings is to allow the exchange of information
from all of the different disciplines involved in the patient's care,
we believe that it is important to designate one person, specifically
the rehabilitation physician, to be responsible for making the final
decisions regarding the patient's IRF care. Thus, we are proposing to
require (at Sec. 412.29(d)(3)) that the rehabilitation physician
document concurrence with all decisions made by the interdisciplinary
team at each meeting.
As discussed above, the interdisciplinary team must include
registered nurses with training or experience in rehabilitation. We
believe that 24-hour nursing care is both a key component of IRF care,
and the normal standard of care in IRFs. Further, we believe that
requiring registered nurses to have specialized training or experience
is warranted considering that IRF patients typically have significant
risk factors for medical complications that need to be monitored in an
inpatient hospital environment. Thus, it is important to note that
under proposed Sec. 412.29(a) the facility must be staffed to provide
specialized nursing, regardless of whether any particular patient
actually has a complication requiring specialized nursing.
Another critical aspect of IRF care is that rehabilitation therapy
services are generally provided to each patient by a licensed or
certified therapist working directly with the patient, more commonly
known as one-on-one therapy. Anecdotally, we have heard that some IRFs
are providing essentially all ``group therapy'' to their patients. We
believe that group therapies have a role in patient care in an IRF, but
that they should be used in IRFs primarily as an adjunct to one-on-one
therapy services, not as the main or only source of therapy services
provided to IRF
[[Page 21071]]
patients. While we recognize the value of group therapy, we believe
that group therapy is typically a lower intensity service that should
be considered as a supplement to the intensive individual therapy
services generally provided in an IRF. To improve our understanding of
when group therapy may be appropriate in IRFs, we specifically solicit
comments on the types of patients for which group therapy may be
appropriate, and the specific amounts of group instead of one-on-one
therapies that may be beneficial for these types of patients. We
anticipate using this information to assess the appropriate use of
group therapies in IRFs and may create standards for group therapies in
IRFs.
F. Proposed Director of Rehabilitation Requirement
We are proposing to retain the existing requirements for a Director
of Rehabilitation without change.
G. Clarifying and Conforming Amendments
Since the proposed classification and payment requirements
described above will apply to both rehabilitation hospitals and
rehabilitation units, we are proposing to consolidate the criteria into
one section of the regulations (at revised Sec. 412.29). Thus, we
propose to revise the heading of Sec. 412.29 to include rehabilitation
hospitals and to relocate the criteria to be classified as an inpatient
rehabilitation hospital found at existing Sec. 412.23(b)(3) through
(b)(7) to the revised Sec. 412.29. As a result, we propose to
redesignate paragraphs (b)(8) and (b)(9) of Sec. 412.23 as paragraphs
(b)(3) and (b)(4). Lastly, we propose to make a technical correction to
newly redesignated paragraph (b)(4) to ensure that it is consistent
with the language found in the introductory paragraph at revised Sec.
412.29 by changing the word ``or'' to the word ``and'' following the
words ``specified in Sec. 412.1(a)(1).''
H. Proposed Introductory Paragraph at Sec. 412.30
As a result of the proposed changes to revised Sec. 412.29, we are
proposing to relocate the current provisions found at Sec. 412.29(a)
to a new introductory paragraph to be inserted at the beginning of
Sec. 412.30. The purpose of moving the definitions of a new and
converted IRF is to separate them from the proposed requirements for
admission and post-admission. Section 412.30 currently only contains
regulatory requirements for new and converted rehabilitation units. As
amended, it will cover inpatient rehabilitation hospitals and hospital
units as well.
I. Proposed Rescission of the HCFAR 85-2 Ruling
As noted previously, the HCFAR is inconsistent with the current
payment system. We would therefore like to take this opportunity to
propose rescission of this document in order to prevent further
confusion over which document provides instructions on the IRF PPS
regulations (that document is Chapter 1, Section 110 of the MBPM).
VIII. Proposed Revisions to the Regulation Text To Require IRFs To
Submit Patient Assessments on Medicare Advantage Patients for Use in
the ``60 Percent Rule'' Calculations
In order to be excluded from the acute care inpatient hospital PPS
specified in Sec. 412.1(a)(1) and instead be paid under the IRF PPS,
rehabilitation hospitals and units must meet the requirements for
classification as an IRF stipulated in subpart B of part 412. In
particular, Sec. 412.23(b)(2) specifies that an IRF must meet a
minimum percentage requirement that at least 60 percent of the IRF's
population has one of the 13 medical conditions listed in Sec.
412.23(b)(2)(ii) as a primary condition or comorbidity in order for the
facility to be classified as an IRF. The minimum percentage is known as
the ``compliance threshold.''
The instructions that we provide to Medicare contractors in Chapter
3, section 140 of the Medicare Claims Processing Manual, Internet-Only
Manual (IOM) Pub. L. 100-04, provide for two methodologies that
Medicare contractors may use to determine an IRF's compliance
threshold. We refer to the first of these two methodologies as the
``presumptive methodology.'' This methodology makes use of the IRF-PAI
information that is submitted for Medicare Part A fee-for-service
inpatients under Sec. 412.604 and Sec. 412.618. It is ``presumptive''
in that, while the compliance threshold requirements specify the
percent of all patients, this method utilizes Medicare patient data to
estimate the compliance percent for the entire IRF patient population.
The presumptive methodology uses computer software to examine the IRF-
PAIs that each IRF submits to CMS for diagnostic codes that would
indicate that a particular IRF patient has one of the 13 medical
conditions listed in Sec. 412.23(b)(2)(ii). If the computer software
determines that the patient has a diagnostic code that indicates one of
the 13 medical conditions listed in Sec. 412.23(b)(2)(ii), then that
patient is counted in the presumptive methodology calculation of that
facility's compliance percentage; otherwise, the patient is not
counted. Once the computer software has examined all of the IRF-PAIs
submitted by a particular facility, the computer software computes the
presumptive compliance percentage for that facility, which equals the
total number of IRF-PAIs for patients with a diagnostic code indicating
at least one of the 13 medical conditions listed in Sec.
412.23(b)(2)(ii) divided by the total number of IRF-PAIs submitted by
the facility. This becomes the facility's presumptive compliance
percentage, which is then compared to the required minimum compliance
percentage to determine whether the facility has met the required
minimum compliance percentage for the designated compliance review
period.
In accordance with IOM instructions in Chapter 3, section 140 of
the Medicare Claims Processing Manual, the presumptive methodology
described above is used in instances in which the Medicare contractor
has verified that the facility's Medicare Part A fee-for-service
inpatient population is representative of the facility's total
inpatient population. For this to be the case, the IOM instructions
specify that the facility's Medicare Part A fee-for-service inpatient
population must be at least 50 percent or more of the facility's total
inpatient population. If the facility's Medicare Part A fee-for-service
inpatient population is less than 50 percent of the facility's total
inpatient population, we cannot conclude that the IRF-PAI data are
representative of the IRF's aggregate utilization pattern. Therefore,
we require the Medicare contractors to use the second of the 2
methodologies to determine the facility's compliance percentage.
The second methodology is commonly known as the ``medical review''
methodology. This methodology requires the Medicare contractor to
review a sample of medical records from the facility's total inpatient
population. Information from those records is then used in an
extrapolation that estimates the facility's compliance percentage. The
second methodology may be used at any time at the discretion of the
Medicare contractor, but we require its use if the facility's Medicare
Part A fee-for-service inpatient population is less than 50 percent of
the facility's total inpatient population (as described above) or if
the facility fails to meet the minimum compliance percentage using the
presumptive methodology. The medical review methodology is time
consuming and labor intensive for both providers and contractors. It is
most useful when
[[Page 21072]]
evaluating facilities with questionable utilization patterns, such as
facilities that do not meet the presumptive compliance percentage, and
is not efficient as the sole method for evaluating compliance.
As described above, the presumptive methodology relies upon the
IRF-PAI data that is submitted under Sec. 412.604 and Sec. 412.618.
To be used, the Medicare Part A inpatient population must consist of at
least 50 percent or more of the facility's total inpatient population.
Since 2004, however, increasing numbers of Medicare beneficiaries
in many areas of the country have been enrolling in Medicare Advantage
(MA) plans rather than remaining in the traditional Medicare Part A
fee-for-service program. This, in turn, has led to decreases in the
number of Medicare Part A fee-for-service inpatients in certain IRFs
across the country and has resulted in a reduction in the number of
IRFs that can benefit from the presumptive methodology. For this
reason, we have received many comments from individual IRFs as well as
from IRF industry groups requesting that we allow Medicare Advantage
patient data to be used in the presumptive methodology to improve
facilities' chances of reaching the required 50 percent or more of the
population mark for use of the presumptive methodology.
We agree with the unsolicited comments on the FY 2009 proposed rule
that the MA population represents an increasing percentage of the
patient populations in IRFs in many areas of the country. We also
believe that it is important to update our policies wherever possible
to allow for a reasonable means for calculating an IRF's compliance
percentage under the 60 percent rule. Although we do not currently
require IRFs to submit IRF-PAI data on MA patients, we understand that
some IRFs are voluntarily submitting IRF-PAI data on some or all of
their MA patients. To ensure that IRFs do not selectively submit IRF-
PAI data on only those MA patients that help them in meeting their
compliance percentage, we believe that it is essential to require IRFs
to submit IRF-PAI data on all of their MA patients. We believe that
this is the only way to maintain the integrity of the compliance
percentage review process. Therefore, we are proposing to require that
IRFs submit IRF-PAI data on all of their MA patients to facilitate
better calculations under the 60 percent rule. However, we are seeking
comments on whether requiring IRFs to submit IRF-PAI data on all of
their MA patients is the best way to ensure the integrity of the
compliance review process.
Where an IRF fails to submit all MA IRF PAIs, we propose that CMS
will not count the MA patients in the compliance percentage for that
IRF. In addition, to ensure that we receive all IRF-PAI data for all
Medicare Patients, whether Part A or Part C, we propose to remove Sec.
412.614(a)(3) of the regulations that currently provides for an
exception that allows an IRF to not transmit IRF-PAIs for Medicare
patients if the IRF does not submit a claim to Medicare for payment.
Thus, we propose to revise the regulation text in Sec. 412.604,
Sec. 412.606, Sec. 412.610, Sec. 412.14, and Sec. 412.618 to
require IRFs to submit IRF-PAI information to CMS for all MA inpatients
in IRFs, in addition to all Medicare Part A fee-for-service inpatients
in IRFs. Requiring IRFs to submit IRF-PAI information for all MA
inpatients will allow Medicare contractors to use this information to
determine facilities' compliance percentages for the IRF 60 percent
rule using the presumptive methodology. Note that we are proposing to
preserve the long-standing 5 year record retention requirement for the
IRF-PAIs completed on Medicare Part A fee-for-service patients, as
currently required in Sec. 412.610(f), but we are proposing a 10 year
record retention requirement for IRF-PAIs completed on Medicare Part C
(Medicare Advantage) patients to maintain consistency with the record
retention requirements for Medicare Part C data specified in Sec.
422.504(d).
For this reason, we propose the following revisions to the
regulation text in Sec. 412.604, Sec. 412.606, Sec. 412.610, Sec.
412.14, and Sec. 412.618. Specifically, we propose to add Medicare
Part C (Medicare Advantage) patients to the patients for whom IRFs must
complete and submit an IRF-PAI, remove the paragraph that allows IRFs
not to submit IRF PAI data in instances in which the IRF does not
submit a claim to Medicare, and reject MA IRF-PAI data that is not
complete. The proposed changes to the regulations text are as follows:
In Sec. 412.604(c), we propose to add the following
sentence to the end of the paragraph: ``IRFs must also complete a
patient assessment instrument in accordance with Sec. 412.606 for each
Medicare Part C (Medicare Advantage) patient admitted to or discharged
from an IRF on or after October 1, 2009.'' Thus, the paragraph would
read as follows: ``For each Medicare Part A fee-for-service patient
admitted to or discharged from an IRF on or after January 1, 2002, the
inpatient rehabilitation facility must complete a patient assessment
instrument in accordance with Sec. 412.606. IRFs must also complete a
patient assessment instrument in accordance with Sec. 412.606 for each
Medicare Part C (Medicare Advantage) patient admitted to or discharged
from an IRF on or after October 1, 2009.''
In Sec. 412.606(b), we propose to add the phrase ``and
Medicare Part C (Medicare Advantage)'' after ``fee-for-service'' and
before ``inpatients.'' The paragraph would read as follows: ``An
inpatient rehabilitation facility must use the CMS inpatient
rehabilitation facility patient assessment instrument to assess
Medicare Part A fee-for-service and Medicare Part C (Medicare
Advantage) inpatients who--''
In Sec. 412.606(c)(1), we propose to add a sentence at
the end of the existing paragraph that reads as follows: ``IRFs must
also complete a patient assessment instrument in accordance with Sec.
412.606 for each Medicare Part C (Medicare Advantage) patient admitted
to or discharged from an IRF on or after October 1, 2009.''
In Sec. 412.610(a), we propose to add the phrase ``and
Medicare Part C (Medicare Advantage)'' after ``fee-for-service'' and
before ``inpatient.'' The paragraph would read as follows: ``For each
Medicare Part A fee-for-service or Medicare Part C (Medicare Advantage)
inpatient, an inpatient rehabilitation facility must complete a patient
assessment instrument as specified in Sec. 412.606 that covers a time
period that is in accordance with the assessment schedule specified in
paragraph (c) of this section.''
In Sec. 412.610(b), we propose to add the phrase ``or
Medicare Part C (Medicare Advantage)'' after ``fee-for-service'' and
before ``inpatient.'' The paragraph would read as follows: ``The first
day that the Medicare Part A fee-for-service or Medicare Part C
(Medicare Advantage) inpatient is furnished Medicare-covered services
during his or her current inpatient rehabilitation facility hospital
stay is counted as day one of the patient assessment schedule.''
In Sec. 412.610(c), we propose to add the phrase ``or
Medicare Part C (Medicare Advantage)'' after ``fee-for-service'' and
before ``patient's.'' The paragraph would read as follows: ``The
inpatient rehabilitation facility must complete a patient assessment
instrument upon the Medicare Part A fee-for-service or Medicare Part C
(Medicare Advantage) patient's admission and discharge as specified in
paragraphs (c)(1) and (c)(2) of this section.''
[[Page 21073]]
In Sec. 412.610(c)(1)(i)(A), we propose to add the phrase
``or Medicare Part C (Medicare Advantage)'' after ``fee-for-service''
and before ``hospitalization.'' The paragraph would read as follows:
``Time period is a span of time that covers calendar days 1 through 3
of the patient's current Medicare Part A fee-for-service or Medicare
Part C (Medicare Advantage) hospitalization; * * *''
In Sec. 412.610(c)(2)(ii)(B), we propose to add the
phrase ``or Medicare Part C (Medicare Advantage)'' after ``fee-for-
service'' and before ``inpatient,'' so that the resulting paragraph
would read, ``The patient stops being furnished Medicare Part A fee-
for-service or Medicare Part C (Medicare Advantage) inpatient
rehabilitation services.''
In Sec. 412.610(f), we propose to add the phrase ``and
Medicare Part C (Medicare Advantage) patients within the previous 10
years'' after ``5 years'' and before ``either,'' and also add the
phrase ``and produce upon request to CMS or its contractors'' after
``obtain.'' The paragraph would read as follows: ``An inpatient
rehabilitation facility must maintain all patient assessment data sets
completed on Medicare Part A fee-for-service patients within the
previous 5 years and Medicare Part C (Medicare Advantage) patients
within the previous 10 years either in a paper format in the patient's
clinical record or in an electronic computer file format that the
inpatient rehabilitation facility can easily obtain and produce upon
request to CMS or its contractors.''
In Sec. 412.614(a), we propose to add the phrase ``and
Medicare Part C (Medicare Advantage)'' after ``fee-for-service'' and
before ``inpatient,'' the paragraph would read as follows: ``The
inpatient rehabilitation facility must encode and transmit data for
each Medicare Part A fee-for-service and Medicare Part C (Medicare
Advantage) inpatient--''
We propose to remove Sec. 412.614(a)(3).
In Sec. 412.614(b)(1), we propose to add the phrase ``and
Medicare Part C (Medicare Advantage)'' after ``fee-for-service'' and
before ``inpatient,'' the paragraph would read as follows:
``Electronically transmit complete, accurate, and encoded data from the
patient assessment instrument for each Medicare Part A fee-for-service
and Medicare Part C (Medicare Advantage) inpatient to our patient data
system in accordance with the data format specified in paragraph (a) of
this section; and * * *''
We propose to revise Sec. 412.614(d) to read,
``Consequences of failure to submit complete and timely IRF-PAI data,
as required under paragraph (c) of this section.''
We propose to revise Sec. 412.614(d)(1) to read,
``Medicare Part A fee-for-service data.''
We propose to make a technical correction to the paragraph
formerly designated as Sec. 412.614(d)(1) and assign the revised
language to a new paragraph Sec. 412.614(d)(1)(a), which would read as
follows: ``We assess a penalty when an inpatient rehabilitation
facility does not transmit all of the required data from the patient
assessment instrument for its Medicare Part A fee-for-service patients
to our patient data system in accordance with the transmission timeline
in paragraph (c) of this section.
We propose to redesignate paragraph Sec. 412.614(d)(2) as
Sec. 412.614(d)(1)(b).
We propose to add a new paragraph Sec. 412.614(d)(2),
which would read as follows: ``Medicare Part C (Medicare Advantage)
data. Failure of the inpatient rehabilitation facility to transmit all
of the required patient assessment instrument data for its Medicare
Part C (Medicare Advantage) patients to our patient data system in
accordance with the transmission timeline in paragraph (c) of this
section will result in a forfeiture of the facility's ability to have
any of its Medicare Part C (Medicare Advantage) data used in the
calculations for determining the facility's compliance with the
regulations at Sec. 412.23(b)(2).
In the introductory paragraph of Sec. 412.618, we propose
to add the phrase ``or Medicare Part C (Medicare Advantage)'' after
``fee-for-service'' and before ``patient.'' The paragraph would read as
follows: ``For purposes of the patient assessment process, if a
Medicare Part A fee-for-service or Medicare Part C (Medicare Advantage)
patient has an interrupted stay, as defined under Sec. 412.602, the
following applies: * * *''
In addition, we have received several inquiries concerning the need
to include IRF PAIs in the medical record. The IRF PAI was introduced
as a payment tool when the IRF PPS was established in 2002. The IRF PAI
provides detailed information on each patient's medical condition and
rehabilitation status. As such, it is also used by CMS to conduct its
program oversight functions. We are therefore proposing to revise Sec.
412.610(f) to require that the IRF maintain all patient assessment data
sets completed on Medicare Part A fee-for-service patients within the
previous 5-years and Medicare Part C (Medicare Advantage) patients
within the previous 10-years either in a paper format in the patient's
clinical record or in an electronic computer file format that the
inpatient rehabilitation facility can easily obtain and produce upon
request to CMS or its contractors. This is meant to clarify any
confusion that may have existed previously about whether the IRF-PAI is
considered part of the patient's medical record. Note that we are
proposing to preserve the long-standing 5-year record retention
requirement for the IRF-PAIs completed on Medicare Part A fee-for-
service patients, as required in current Sec. 412.610(f), but we are
proposing a 10-year record retention requirement for IRF-PAIs completed
on Medicare Part C (Medicare Advantage) patients to maintain
consistency with the record retention requirements for Medicare Part C
data specified in Sec. 422.504(d)(1)(ii).
IX. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
Therefore, we are soliciting public comment on each of these issues
for the following sections of this document that contain information
collection requirements:
Section 412.29 Excluded Rehabilitation Hospitals and Units: Additional
Requirements
In 1983, CMS sought to distinguish rehabilitation hospitals from
other hospitals that offer general medical and surgical services, but
also provide some rehabilitation services, by developing new regulatory
provisions that describe the criteria that hospital must meet to be
excluded from the Inpatient Prospective Payment System (IPPS). These
criteria relate to the preadmission screening of prospective
inpatients, to the types of services that must be furnished by or
[[Page 21074]]
made available in the hospital, and to the hospital's management of the
rehabilitation services it furnished.
All IPPS hospitals, including excluded rehabilitation hospitals and
units, have been and continue to be required to comply with the
Hospital Conditions of Participation (CoP) that served as the basis for
the excluded criteria established in 1983. In this proposed rule, we
propose regulatory provisions that would reinforce the link between the
Hospital CoPs for medical records and delivery of inpatient
rehabilitation services within the exclusion criteria, and that would
promote further understanding of how medical necessity for
rehabilitation services provided in IRFs should be established.
As previously discussed in this proposed rule, we are proposing to
consolidate the existing exclusion criteria in Sec. 412.23(b)(3)
through (7) and Sec. 412.29(b) through (f) into a revised Sec. 412.29
that applies to both rehabilitation hospitals and units. We will then
utilize the MPBM to issue guidance on how the documentation
requirements relating to the medical record should be used in
determining the medical necessity of IRF claims.
Section 412.23(b)(3) and Sec. 412.29(b) currently require IRF
facilities to have a preadmission screening process for each potential
IRF patient. These requirements would be combined in the proposed Sec.
412.29(b)(2)(iv). The proposed Sec. 412.29(b)(2)(iv) would also
require that the rehabilitation physician review and document his or
her concurrence with the preadmission screening findings and the
admission decision in keeping with the Hospital CoPs at Sec.
482.24(c)(1). Similarly, the preadmission screening findings and
admission decision would need to be retained in the patient's medical
record, in keeping with the Hospital CoPs at Sec. 482.24(c)(2). The
burden associated with these proposed requirements would be the time
and effort put forth by the rehabilitation physician to document his or
her concurrence with the preadmission findings and the admission
decision and retain the information in the patient's medical record.
The burden associated with these proposed requirements are in keeping
with the ``Condition of Participation: Medical record services,'' that
are already applicable to Medicare participating hospitals. The burden
associated with these requirements is currently approved under
OMB 0938-0328. As stated in the approved Hospital CoPs
Supporting Statement, we believe that the proposed requirements reflect
customary and usual business and medical practice. Thus, in accordance
with section 1320.3(b)(2) of the Act, the burden is not subject to the
PRA.
Proposed section Sec. 412.29(c)(1) would be in keeping with the
existing Hospital CoP requirement at Sec. 482.24(c)(2) that requires
the facility to have and utilize a post-admission evaluation process.
The proposed post admission evaluation process at Sec. 412.29(c)(1)
would require that a rehabilitation physician complete a post-admission
evaluation for each patient within 24 hours of that patient's admission
to the IRF facility in order to document the patient's status on
admission to the IRF, compare it to that noted in the preadmission
screening documentation, and begin development of the overall
individualized plan of care. Similarly, this proposed section would
require that a post-admission physician evaluation be retained in the
patient's medical record, in keeping with the Hospital CoPs at Sec.
482.24(c)(2).
The burden associated with these proposed requirements would be the
time and effort put forth by the rehabilitation physician to document
the patient's status on admission to the IRF, compare it to that noted
in the preadmission screening document, begin development of the plan
of care, and retain the information in the patient's medical record.
The burden associated with these proposed requirements are in keeping
with the ``Condition of Participation: Medical record services,''
applicable to Medicare participating Hospitals. The burden associated
with these requirements is currently approved under OMB 0938-
0328. As stated in the approved ``Hospital CoPs Supporting Statement,''
we believe that the proposed requirements reflect customary and usual
business and medical practice. Thus, in accordance with section
1320.3(b)(2) of the Act, the burden is not subject to the PRA.
Proposed Sec. 412.29(c)(2) would be in keeping with the existing
requirement at Sec. 412.23(c)(6) to develop an overall plan of care
for each IRF admission. Such a proposal is in keeping with the Hospital
CoPs at Sec. 482.56(b). Similarly, the individualized plan of care
that would be required by proposed Sec. 412.29(c)(2) would be required
to be retained in the patient's medical record, as currently required
by the Hospital CoPs at Sec. 482.24(c)(2).
The burden associated with these prospective requirements would be
the time and effort put forth by the rehabilitation physician to
develop the individualized overall plan of care and retain the
individualized overall plan of care in the patient's medical record.
The burden associated with these proposed requirements are in keeping
with the ``Condition of Participation: Medical record services,'' and
the ``Standard: Delivery of Services,'' that are already applicable to
Medicare participating hospitals. The burden associated with these
requirements is currently approved under OMB 0938-0328. As
stated in the approved ``Hospital CoPs Supporting Statement,'' we
believe that the purposed requirements reflect customary and usual
business and medical practice. The requirement for an individualized
plan of care is also an industry standard. Thus, in accordance with
section 1320.3(b)(2) of the Act, the burden is not subject to the PRA.
Proposed Sec. 412.29(d)(2) would require the interdisciplinary
team to meet at least once per week throughout the duration of the
patient's stay to implement appropriate treatment services; review the
patient's progress toward stated rehabilitation goals; identify any
problems that could impede progress towards those goals; and, where
necessary, reassess previously established goals in light of
impediments, revise the treatment plan in light of new goals, and
monitor continued progress toward those goals. Proposed Sec.
412.23(d)(2) would be in keeping with Sec. 482.24(c)(1) and (c)(2) of
the Hospital CoPs.
The proposed requirement for a weekly conference revises the
current requirement for bi-weekly meetings to reflect current medical
practice and a reduction in the average patient lengths of stay that in
turn make more frequent monitoring of patient status an important
factor in ensuring adequate patient care. For example, with the average
length of stay for many IRF stays under 14 days, a bi-weekly
requirement for consultation and coordination of the patient's care
would be ineffective. In consulting with clinicians, we have found that
more frequent interdisciplinary team meetings are considered to be a
currently recognized standard of practice, regardless of payor source.
As with all other proposed requirements in this proposed rule, the
public may submit comments on this proposed change.
The burden associated with this proposed revised requirement would
be the time spent discussing the patient's progress, problems and
reassessment/monitoring of continued progress. The burden associated
with this proposed requirement is in keeping with the ``Condition of
Participation: Medical record services,'' that are already applicable
to Medicare participating hospitals. The burden associated with
[[Page 21075]]
these requirements is currently approved under OMB 0938-0328.
As stated in the approved ``Hospital CoPs Supporting Statement,'' we
believe that the proposed requirements reflect customary and usual
business and medical practice. Thus, in accordance with section
1320.3(b)(2) of the Act, the burden is not subject to the PRA.
Proposed Sec. 412.29(d)(3) would require the rehabilitation
physician to document concurrence with all decisions made by the
interdisciplinary team at each team meeting, which would be in keeping
with what is currently required by the Hospital CoPs at Sec.
482.24(c)(1).
The burden associated with this proposed requirement is the time
and effort put forth by the rehabilitation physician to document
concurrence. The burden associated with this proposed requirement is in
keeping with the ``Condition of Participation: Medical record
services,'' applicable to Medicare participating hospitals. The burden
associated with these requirements is currently approved under
OMB 0938-0328. As stated in the approved ``Hospital CoPs
Supporting Statement,'' we believe that the proposed requirements
reflect customary and usual business and medical practice. Thus, in
accordance with section 1320.3(b)(2) of the Act, the burden is not
subject to the PRA.
Section 412.604 Conditions for Payment Under the Prospective Payment
System for Inpatient Rehabilitation Facilities
We have proposed to amend Sec. 412.604(c) to add an IRF-PAI
requirement for Medicare Part C (Medicare Advantage) patients that are
admitted to or discharged from an Inpatient Rehabilitation Facility
(IRF) on or after October 1, 2009.
The burden associated with this requirement is the time and effort
put forth by each IRF to complete an average of approximately 38
additional patient assessment instruments each year associated with its
Medicare Part C patients. We obtained the estimated average number of
Medicare Part C patients in each IRF from the American Medical
Rehabilitation Providers Association (AMRPA), based on AMRPA's own
analysis of the eRehabData[supreg] policy database. CMS currently
estimates that it takes the IRF 0.75 of an hour to complete a single
patient assessment instrument. Therefore, the annual hour burden for
each IRF to complete approximately 38 additional patient assessment
instruments is 28.5 hours (38 x 0.75). The total annual hour burden for
all 1,205 IRFs is 34,342.5 hours (28.5 hours x 1,205 IRFs). The burden
estimate for using the patient assessment instrument for Medicare Part
A is currently approved under 0938-0842. CMS will revise this currently
approved package as necessary to include any additional burden placed
on the IRF for submitting the patient assessment instrument for
Medicare Advantage patients.
Section 412.606 Patient Assessments
Section 412.606 proposes to require an IRF to use the CMS inpatient
rehabilitation facility patient assessment instrument to assess
Medicare Part A fee-for-service and Medicare Part C (Medicare
Advantage) inpatients.
The burden for using the patient assessment instrument for Medicare
Part A is currently approved under 0938-0842. CMS will revise this
currently approved package as necessary to include any additional
burden placed on IRFs for submitting the patient assessment instrument
for Medicare Advantage patients.
Section 412.610 Assessment Schedule
Proposed Sec. 412.610(f) states that an IRF must maintain all
patient assessment data sets completed on Medicare Part A fee-for-
service patients within the previous 5 years and Medicare Part C
(Medicare Advantage) patients within the previous 10 years either in a
paper format in the patient's clinical record or in an electronic
computer file format that the inpatient rehabilitation facility can
easily obtain and produce upon request to CMS or its contractors.
The burden for maintaining the patient assessment instrument for
Medicare Part A is currently approved under OMB 0938-0842. CMS
will revise this currently approved package as necessary to include any
additional burden placed on IRFs for maintaining the patient assessment
instrument for Medicare Advantage patients.
Section 412.614 Transmission of Patient Assessment Data
Section 412.614(a) requires that the IRF must encode and transmit
patient assessment data to CMS. The burden associated with this
requirement is the time staff must take to transmit the data.
CMS currently estimates that it takes the IRF 0.10 of an hour to
transmit a single patient assessment instrument. Therefore, the annual
hour burden to transmit an average of approximately 38 additional
patient assessments instruments per IRF is 3.8 hours (38 x 0.10). The
total annual hour burden for all 1,205 IRFs is 4,579 hours (3.8 hours x
1,205 IRFs). The burden estimate for transmitting the patient
assessment instrument for Medicare Part A is currently approved under
0938-0842. CMS will revise this currently approved package as necessary
to include any additional burden placed on the IRF for transmitting the
patient assessment instrument for Medicare Advantage patients.
You may submit comments on these information collection and
recordkeeping requirements in one of the following ways (please choose
only one of the ways listed):
4. Submit your comments electronically as specified in the
ADDRESSES section of this proposed rule; or
5. Submit your written comments to the Office of Information and
Regulatory Affairs, Office of Management and Budget, Attention: CMS
Desk Officer; Fax: (202) 395-7245; or E-mail: OIRA_
submission@omb.eop.gov.
X. Response to Public Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the ``DATES'' section of this
preamble, and, when we proceed with a subsequent document, we will
respond to the comments in the preamble to that document.
XI. Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this proposed rule as required by
Executive Order 12866 (September 30, 1993, Regulatory Planning and
Review), the Regulatory Flexibility Act (RFA, September 19, 1980, Pub.
L. 96-354), section 1102(b) of the Social Security Act, section 202 of
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive
Order 13132 on Federalism (August 4, 1999), and the Congressional
Review Act (5 U.S.C. 804(2)).
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any one year). This
proposed rule is a major rule, as defined in Title 5, United States
Code, section 804(2),
[[Page 21076]]
because we estimate the impact to the Medicare program, and the annual
effects to the overall economy, will be more than $100 million. We
estimate that the total impact of these proposed changes for estimated
FY 2010 payments compared to estimated FY 2009 payments would be an
increase of approximately $150 million (this reflects a $140 million
increase from the update to the payment rates and a $10 million
increase due to the proposed update to the outlier threshold amount to
increase estimated outlier payments from approximately 2.8 percent in
FY 2009 to 3 percent in FY 2010).
The Regulatory Flexibility Act (RFA) requires agencies to analyze
options for regulatory relief of small entities, if a rule has a
significant impact on a substantial number of small entities. For
purposes of the RFA, small entities include small businesses, nonprofit
organizations, and small governmental jurisdictions. Most IRFs and most
other providers and suppliers are small entities, either by nonprofit
status or by having revenues of $7 million to $34.5 million in any one
year. (For details, see the Small Business Administration's final rule
that set forth size standards for health care industries, at 65 FR
69432, November 17, 2000.) Because we lack data on individual hospital
receipts, we cannot determine the number of small proprietary IRFs or
the proportion of IRFs' revenue that is derived from Medicare payments.
Therefore, we assume that all IRFs (an approximate total of 1,200 IRFs,
of which approximately 60 percent are nonprofit facilities) are
considered small entities and that Medicare payment constitutes the
majority of their revenues. The Department of Health and Human Services
generally uses a revenue impact of 3 to 5 percent as a significance
threshold under the RFA. As shown in Table 7, we estimate that the net
revenue impact of this proposed rule on all IRFs is to increase
estimated payments by about 2.6 percent, with an estimated positive
increase in payments of 3 percent or higher for some categories of IRFs
(such as urban IRFs in the Mountain and Pacific regions). Thus, we
anticipate that this proposed rule would have a significant impact on a
substantial number of small entities. However, there is no negative
estimated impact of this proposed rule that is within the significance
threshold of 3 to 5 percent, so we believe that this proposed rule
would not impose a significant burden on small entities. Medicare
fiscal intermediaries and carriers are not considered to be small
entities. Individuals and States are not included in the definition of
a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. As discussed in detail
below, the rates and policies set forth in this proposed rule will not
have an adverse impact on rural hospitals based on the data of the 193
rural units and 21 rural hospitals in our database of 1,205 IRFs for
which data were available.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any one year of
$100 million in 1995 dollars, updated annually for inflation. In 2009,
that threshold level is approximately $133 million. This proposed rule
will not impose spending costs on State, local, or tribal governments,
in the aggregate, or by the private sector, of $133 million.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. As stated above, this proposed rule would not have a
substantial effect on State and local governments.
B. Anticipated Effects of the Proposed Rule
1. Basis and Methodology of Estimates
This proposed rule sets forth updates of the IRF PPS rates
contained in the FY 2009 final rule and proposes updates to the CMG
relative weights and length of stay values, the facility-level
adjustments, the wage index, and the outlier threshold for high-cost
cases.
We estimate that the FY 2010 impact would be a net increase of $150
million in payments to IRF providers (this reflects a $140 million
estimated increase from the proposed update to the payment rates and a
$10 million estimated increase due to the proposed update to the
outlier threshold amount to increase the estimated outlier payments
from approximately 2.8 percent in FY 2009 to 3.0 percent in FY 2010).
The impact analysis in Table 7 of this proposed rule represents the
projected effects of the proposed policy changes in the IRF PPS for FY
2010 compared with estimated IRF PPS payments in FY 2009 without the
proposed policy changes. We estimate the effects by estimating payments
while holding all other payment variables constant. We use the best
data available, but we do not attempt to predict behavioral responses
to these proposed changes, and we do not make adjustments for future
changes in such variables as number of discharges or case-mix.
We note that certain events may combine to limit the scope or
accuracy of our impact analysis, because such an analysis is future-
oriented and, thus, susceptible to forecasting errors because of other
changes in the forecasted impact time period. Some examples could be
legislative changes made by the Congress to the Medicare program that
would impact program funding, or changes specifically related to IRFs.
Although some of these changes may not necessarily be specific to the
IRF PPS, the nature of the Medicare program is such that the changes
may interact, and the complexity of the interaction of these changes
could make it difficult to predict accurately the full scope of the
impact upon IRFs.
In updating the rates for FY 2010, we are proposing a number of
standard annual revisions and clarifications mentioned elsewhere in
this proposed rule (for example, the update to the wage and market
basket indexes used to adjust the Federal rates). We estimate that
these proposed revisions would increase payments to IRFs by
approximately $140 million (all due to the update to the market basket
index, since the update to the wage index is done in a budget neutral
manner--as required by statute--and therefore neither increases nor
decreases aggregate payments to IRFs).
The aggregate change in estimated payments associated with this
proposed rule is estimated to be an increase in payments to IRFs of
$150 million for FY 2010. The market basket increase of $140 million
and the $10 million increase due to the proposed update to the outlier
threshold amount to increase estimated outlier payments from
approximately 2.8 percent in FY 2009 to 3.0 percent in FY 2010 would
result in a net change in estimated payments from FY 2009 to FY 2010 of
$150 million.
The effects of the proposed changes that impact IRF PPS payment
rates are shown in Table 7. The following proposed changes that affect
the IRF
[[Page 21077]]
PPS payment rates are discussed separately below:
The effects of the proposed update to the outlier
threshold amount, from approximately 2.8 to 3.0 percent of total
estimated payments for FY 2010, consistent with section 1886(j)(4) of
the Act.
The effects of the annual market basket update (using the
RPL market basket) to IRF PPS payment rates, as required by section
1886(j)(3)(A)(i) and section 1886(j)(3)(C) of the Act.
The effects of applying the budget-neutral labor-related
share and wage index adjustment, as required under section 1886(j)(6)
of the Act.
The effects of the proposed budget-neutral changes to the
CMG relative weights and length of stay values, under the authority of
section 1886(j)(2)(C)(i) of the Act.
The effects of the proposed budget-neutral changes to the
facility-level adjustment factors, as permitted under section
1886(j)(3)(A)(v) of the Act.
The total proposed change in estimated payments based on
the FY 2010 proposed policies relative to estimated FY 2009 payments
without the proposed policies.
2. Description of Table 7
The table below categorizes IRFs by geographic location, including
urban or rural location, and location with respect to CMS's nine census
divisions (as defined on the cost report) of the country. In addition,
the table divides IRFs into those that are separate rehabilitation
hospitals (otherwise called freestanding hospitals in this section),
those that are rehabilitation units of a hospital (otherwise called
hospital units in this section), rural or urban facilities, ownership
(otherwise called for-profit, non-profit, and government), and by
teaching status. The top row of the table shows the overall impact on
the 1,205 IRFs included in the analysis.
The next 12 rows of Table 7 contain IRFs categorized according to
their geographic location, designation as either a freestanding
hospital or a unit of a hospital, and by type of ownership; all urban,
which is further divided into urban units of a hospital, urban
freestanding hospitals, and by type of ownership; and all rural, which
is further divided into rural units of a hospital, rural freestanding
hospitals, and by type of ownership. There are 991 IRFs located in
urban areas included in our analysis. Among these, there are 793 IRF
units of hospitals located in urban areas and 198 freestanding IRF
hospitals located in urban areas. There are 214 IRFs located in rural
areas included in our analysis. Among these, there are 193 IRF units of
hospitals located in rural areas and 21 freestanding IRF hospitals
located in rural areas. There are 398 for-profit IRFs. Among these,
there are 324 IRFs in urban areas and 74 IRFs in rural areas. There are
739 non-profit IRFs. Among these, there are 615 urban IRFs and 124
rural IRFs. There are 68 government-owned IRFs. Among these, there are
52 urban IRFs and 16 rural IRFs.
The remaining three parts of Table 7 show IRFs grouped by their
geographic location within a region and by teaching status. First, IRFs
located in urban areas are categorized with respect to their location
within a particular one of the nine CMS geographic regions. Second,
IRFs located in rural areas are categorized with respect to their
location within a particular one of the nine CMS geographic regions. In
some cases, especially for rural IRFs located in the New England,
Mountain, and Pacific regions, the number of IRFs represented is small.
Finally, IRFs are grouped by teaching status, including non-teaching
IRFs, IRFs with an intern and resident to average daily census (ADC)
ratio less than 10 percent, IRFs with an intern and resident to ADC
ratio greater than or equal to 10 percent and less than or equal to 19
percent, and IRFs with an intern and resident to ADC ratio greater than
19 percent.
The estimated impacts of each proposed change to the facility
categories listed above are shown in the columns of Table 7. The
description of each column is as follows:
Column (1) shows the facility classification categories described
above.
Column (2) shows the number of IRFs in each category in our FY 2007
analysis file.
Column (3) shows the number of cases in each category in our FY
2007 analysis file.
Column (4) shows the estimated effect of the proposed adjustment to
the outlier threshold amount so that estimated outlier payments
increase from approximately 2.8 percent in FY 2009 to 3.0 percent of
total estimated payments for FY 2010.
Column (5) shows the estimated effect of the market basket update
to the IRF PPS payment rates.
Column (6) shows the estimated effect of the update to the IRF
labor-related share and wage index, in a budget neutral manner.
Column (7) shows the estimated effect of the update to the CMG
relative weights and average length of stay values, in a budget neutral
manner.
Column (8) shows the estimated effect of the update to the
facility-level adjustment factors (rural, LIP, and teaching status), in
a budget neutral manner.
Column (9) compares our estimates of the payments per discharge,
incorporating all of the proposed changes reflected in this proposed
rule for FY 2010, to our estimates of payments per discharge in FY 2009
(without these proposed changes).
The average estimated increase for all IRFs is approximately 2.6
percent. This estimated increase includes the effects of the 2.4
percent market basket update. It also includes the 0.2 percent overall
estimated increase (the difference between 2.8 percent in FY 2009 and
3.0 percent in FY 2010) in estimated IRF outlier payments from the
proposed update to the outlier threshold amount. Because we are making
the remainder of the proposed changes outlined in this proposed rule in
a budget-neutral manner, they would not affect total estimated IRF
payments in the aggregate. However, as described in more detail in each
section, they would affect the estimated distribution of payments among
providers.
Table 7--Proposed IRF Impact Table for FY 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2010
Number of Number of Market CBSA wage Facility Total
Facility classification IRFs cases Outlier basket index and CMG adjustments percent
labor-share change
(1) (2) (3) (4) (5) (6) (7) (8) (9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total........................................... 1,205 376,418 0.2% 2.4% 0.0% 0.0% 0.0% 2.6%
Urban unit...................................... 793 205,883 0.3 2.4 0.0 0.0 0.2 2.9
Rural unit...................................... 193 31,249 0.3 2.4 0.1 0.0 -1.9 0.8
[[Page 21078]]
Urban hospital.................................. 198 132,879 0.1 2.4 0.0 0.0 0.3 2.8
Rural hospital.................................. 21 6,407 0.1 2.4 0.1 0.0 -2.3 0.3
Urban for-profit................................ 324 128,187 0.2 2.4 0.1 0.0 0.1 2.9
Rural for-profit................................ 74 13,477 0.2 2.4 0.0 0.0 -2.2 0.3
Urban Non-Profit................................ 615 195,986 0.3 2.4 -0.1 0.0 0.3 2.8
Rural Non-Profit................................ 124 21,898 0.2 2.4 0.1 0.0 -1.9 0.9
Urban Government................................ 52 14,589 0.5 2.4 0.1 0.0 0.0 3.0
Rural Government................................ 16 2,281 0.5 2.4 0.3 0.0 -1.8 1.4
Urban........................................... 991 338,762 0.2 2.4 0.0 0.0 0.2 2.8
Rural........................................... 214 37,656 0.2 2.4 0.1 0.0 -2.0 0.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Urban by region
--------------------------------------------------------------------------------------------------------------------------------------------------------
Urban New England............................... 32 16,461 0.2 2.4 0.0 0.0 0.2 2.8
Urban Middle Atlantic........................... 156 60,076 0.2 2.4 -0.3 0.0 0.5 2.7
Urban South Atlantic............................ 133 57,429 0.3 2.4 -0.2 0.0 0.1 2.6
Urban East North Central........................ 195 59,475 0.3 2.4 -0.6 0.0 0.6 2.6
Urban East South Central........................ 54 24,565 0.2 2.4 -0.1 0.0 0.4 2.9
Urban West North Central........................ 68 17,166 0.3 2.4 0.4 0.0 0.2 3.3
Urban West South Central........................ 175 58,891 0.2 2.4 0.0 0.0 0.3 3.0
Urban Mountain.................................. 71 21,982 0.3 2.4 0.3 0.0 0.2 3.2
Urban Pacific................................... 107 22,717 0.4 2.4 1.5 0.0 -1.1 3.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rural by region
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rural New England............................... 6 1,480 0.4 2.4 -0.3 0.0 -1.5 0.9
Rural Middle Atlantic........................... 18 3,372 0.2 2.4 -0.3 0.0 -1.3 0.9
Rural South Atlantic............................ 26 5,505 0.2 2.4 -0.2 0.0 -2.2 0.2
Rural East North Central........................ 36 6,332 0.2 2.4 -0.5 0.0 -1.7 0.3
Rural East South Central........................ 23 4,078 0.1 2.4 -0.2 0.0 -2.7 -0.4
Rural West North Central........................ 37 5,485 0.3 2.4 0.5 0.0 -1.7 1.4
Rural West South Central........................ 57 10,316 0.2 2.4 0.7 0.0 -2.3 1.0
Rural Mountain.................................. 6 592 0.4 2.4 0.3 0.0 -1.8 1.3
Rural Pacific................................... 5 496 0.8 2.4 0.5 0.0 -1.0 2.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Teaching Status
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-teaching.................................... 1,087 325,871 0.2 2.4 0.0 0.0 -0.1 2.6
Resident to ADC less than 10%................... 66 35,237 0.2 2.4 -0.1 0.0 0.0 2.5
Resident to ADC 10%-19%......................... 34 10,178 0.2 2.4 -0.8 0.0 0.4 2.2
Resident to ADC greater than 19%................ 18 5,132 0.2 2.4 -0.2 0.0 2.4 4.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. Impact of the Proposed Update to the Outlier Threshold Amount
In the FY 2009 IRF PPS final rule (73 FR 46370), we used FY 2007
patient-level claims data (the best, most complete data available at
that time) to set the outlier threshold amount for FY 2009 so that
estimated outlier payments would equal 3 percent of total estimated
payments for FY 2009. For this proposed rule, we are proposing to
update our analysis using more current FY 2007 data. Using the updated
FY 2007 data, we now estimate that IRF outlier payments, as a
percentage of total estimated payments for FY 2010, decreased from 3
percent using the FY 2007 data to approximately 2.8 percent using the
updated FY 2007 data. As a result, we are proposing to adjust the
outlier threshold amount for FY 2010 to $9,976, reflecting total
estimated outlier payments equal to 3 percent of total estimated
payments in FY 2010.
The impact of the proposed update to the outlier threshold amount
(as shown in column 4 of Table 7) is to increase estimated overall
payments to IRFs by 0.2 percent. We do not estimate that any group of
IRFs would experience a decrease in payments from this proposed update.
We estimate the largest increase in payments to be a 0.8 percent
increase in estimated payments to rural IRF's in the Pacific region.
4. Impact of the Proposed Market Basket Update to the IRF PPS Payment
Rates
The proposed market basket update to the IRF PPS payment rates is
presented in column 5 of Table 7. In the aggregate the proposed update
would result in a 2.4 percent increase in overall estimated payments to
IRFs.
5. Impact of the Proposed CBSA Wage Index and Labor-Related Share
In column 6 of Table 7, we present the effects of the proposed
budget neutral update of the wage index and labor-related share. In the
aggregate and for all urban IRFs, we do not estimate that these
proposed changes would affect
[[Page 21079]]
overall estimated payments to IRFs. However, we estimate that these
proposed changes would have small distributional effects. We estimate a
0.1 percent increase in payments to rural IRFs, with the largest
increase in payments of 1.5 percent for urban IRFs in the Pacific
region. We estimate the largest decrease in payments from the proposed
update to the CBSA wage index and labor-related share to be a 0.8
percent decrease for IRFs with an intern and resident to ADC ratio
greater than or equal to 10 percent and less than or equal to 19
percent.
6. Impact of the Proposed Update to the CMG Relative Weights and
Average Length of Stay Values
In column 7 of Table 7, we present the effects of the proposed
budget neutral update of the CMG relative weights and average length of
stay values. In the aggregate and across all hospital groups we do not
estimate that these proposed changes would affect overall estimated
payments to IRFs.
7. Impact of the Proposed Update to the Rural, LIP, and Teaching Status
Adjustment Factors
In column 8 of Table 7, we present the effects of the proposed
budget neutral update to the rural, LIP, and teaching status adjustment
factors. In the aggregate, we do not estimate that these proposed
changes would affect overall estimated payments to IRFs. However, we
estimate that these proposed changes would have small distributional
effects. We estimate the largest increase in payments to be a 2.4
percent increase for IRFs with a resident to ADC ratio greater than 19
percent. We estimate the largest decrease in payments to be a 2.7
percent decrease for rural IRFs in the East South Central region.
C. Alternatives Considered
Because we have determined that this proposed rule would have a
significant economic impact on IRFs and on a substantial number of
small entities, we will discuss the alternative changes to the IRF PPS
that we considered.
Section 1886(j)(3)(C) of the Act requires the Secretary to update
the IRF PPS payment rates by an increase factor that reflects changes
over time in the prices of an appropriate mix of goods and services
included in the covered IRF services. As noted in section V of this
proposed rule, in the absence of statutory direction on the FY 2010
market basket increase factor, it is our understanding that the
Congress requires a full market basket increase factor based upon
current data. Thus, we did not consider alternatives to updating
payments using the estimated RPL market basket increase factor
(currently 2.4 percent) for FY 2010.
We considered maintaining the existing CMG relative weights and
average length of stay values for FY 2010. However, several commenters
on the FY 2009 IRF PPS proposed rule (73 FR 46373) suggested that the
data that we used for FY 2009 to update the CMG relative weights and
average length of stay values did not fully reflect recent changes in
IRF utilization that have occurred because of changes in the IRF
compliance percentage and the consequences of recent IRF medical
necessity reviews. In light of recently available data and our desire
to ensure that the CMG relative weights and average length of stay
values are as reflective as possible of these recent changes and that
IRF PPS payments continue to reflect as accurately as possible the
current costs of care in IRFs, we believe that it is appropriate to
update the CMG relative weights and average length of stay values at
this time.
We also considered maintaining the existing rural, LIP, and
teaching status adjustment factors for FY 2010. However, the current
rural, LIP, and teaching status adjustment factors are based on RAND's
analysis of FY 2003 data, which are not reflective of recent changes in
IRF utilization that have occurred because of changes in the IRF
compliance percentage and the consequences of recent IRF medical
necessity reviews. Thus, we believe that it is important to update
these adjustment factors at this time to ensure that payments to IRFs
reflect as accurately as possible the current costs of care in IRFs.
In estimating the proposed updates to the rural, LIP, and teaching
status adjustment factors, we considered either basing them on an
analysis of FY 2007 data alone, or averaging the adjustment factors
based on the most recent three years of data (FYs 2005, 2006, and
2007). We decided to propose the new approach of averaging the
adjustment factors based on the most recent three years of data to
avoid unnecessarily large fluctuations in the adjustment factors from
year to year, and thereby promote the consistency and predictability of
IRF PPS payments over time. We believe that this will benefit all IRFs
by enabling them to plan their future Medicare payments more
accurately.
We considered maintaining the existing outlier threshold amount for
FY 2010. However, the proposed update to the outlier threshold amount
would have a positive impact on IRF providers and, therefore, on small
entities (as shown in Table 7, column 4). Further, analysis of FY 2007
data indicates that estimated outlier payments would not equal 3
percent of estimated total payments for FY 2010 unless we proposed to
update the outlier threshold amount. Thus, we believe that this update
is appropriate for FY 2010.
In addition, we considered maintaining the existing coverage
requirements for IRFs, without clarification. However, these coverage
requirements have not been updated in over 20 years and no longer
reflect current medical practice or changes that have occurred in IRF
utilization and payments as a result of the implementation of the IRF
PPS in 2002. We believe that the proposed clarifications would benefit
IRFs and Medicare's contractors (including fiscal intermediaries,
Medicare Administrative Contractors, and Recovery Audit Contractors) by
promoting a more consistent understanding of CMS's IRF coverage
policies among stakeholders, thereby leading to fewer disputed IRF
claims denials.
Finally, we considered maintaining our current policy of requiring
that an IRF's Medicare Part A inpatient population consist of at least
50 percent or more of the facility's total inpatient population before
the presumptive methodology can be used to calculate the IRF's
compliance percentage under the 60 percent rule. However, increasing
numbers of Medicare beneficiaries in many areas of the country have
been enrolling in Medicare Advantage (MA) plans rather than remaining
in the traditional Medicare Part A fee-for-service program. This, in
turn, has led to decreases in the number of Medicare Part A fee-for-
service inpatients in certain IRFs across the country and has resulted
in a reduction in the number of IRFs that can benefit from the
presumptive methodology. We did not anticipate this result when the
policy was implemented. In light of these recent trends, we believe
that it is appropriate at this time to include the Medicare Advantage
patients in the calculations for the purposes of using the presumptive
methodology to determine IRFs' compliance with the 60 percent rule
requirements.
D. Accounting Statement
As required by OMB Circular A-4 (available at http://
www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 8 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the
[[Page 21080]]
provisions of this proposed rule. This table provides our best estimate
of the increase in Medicare payments under the IRF PPS as a result of
the proposed changes presented in this proposed rule based on the data
for 1,205 IRFs in our database. All estimated expenditures are
classified as transfers to Medicare providers (that is, IRFs).
Table 8--Accounting Statement: Classification of Estimated Expenditures, From the 2009 IRF PPS Fiscal Year to
the 2010 IRF PPS Fiscal Year
----------------------------------------------------------------------------------------------------------------
Category Transfers
----------------------------------------------------------------------------------------------------------------
Annualized Monetized Transfers......... $150 million.
From Whom to Whom?..................... Federal Government to IRF Medicare Providers.
----------------------------------------------------------------------------------------------------------------
E. Conclusion
Overall, the estimated payments per discharge for IRFs in FY 2010
are projected to increase by 2.6 percent, compared with those in FY
2009, as reflected in column 9 of Table 7. IRF payments are estimated
to increase 2.8 percent in urban areas and 0.7 percent in rural areas,
per discharge compared with FY 2009. Payments to rehabilitation units
in urban areas are estimated to increase 2.9 percent per discharge.
Payments to rehabilitation freestanding hospitals in urban areas are
estimated to increase 2.8 percent per discharge. Payments to
rehabilitation units in rural areas are estimated to increase 0.8
percent per discharge, while payments to freestanding rehabilitation
hospitals in rural areas are estimated to increase 0.3 percent per
discharge.
Overall, the largest payment increase is estimated at 4.9 percent
for IRFs with a resident to ADC ratio greater than 19 percent. Rural
IRFs in the East South Central region are estimated to have a decrease
of 0.4 percent in payments.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 412
Administrative practice and procedure, Health facilities, Medicare,
Puerto Rico, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as follows:
PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
1. The authority citation for part 412 continues to read as
follows:
Authority: Sections 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart B--Hospital Services Subject to and Excluded From the
Prospective Payment Systems for Inpatient Operating Costs and
Inpatient Capital-Related Costs
2. Section 412.23 is amended by--
A. Removing paragraphs (b)(3) through (b)(7).
B. Redesignating paragraphs (b)(8) and (b)(9) as paragraphs (b)(3)
and (b)(4).
C. Revising newly redesignated paragraph (b)(4).
The revision reads as follows:
Sec. 412.23 Excluded hospitals: Classifications.
* * * * *
(b) * * *
(4) For cost reporting periods beginning on or after October 1,
1991, if a hospital is excluded from the prospective payment systems
specified in Sec. 412.1(a)(1) and is paid under the prospective
payment system specified in Sec. 412.1(a)(3) for a cost reporting
period under paragraph (b)(3) of this section, but the inpatient
population it actually treated during that period does not meet the
requirements of paragraph (b)(2) of this section, we adjust payments to
the hospital retroactively in accordance with the provisions in Sec.
412.130.
* * * * *
3. Section 412.29 is amended by--
A. Revising the section heading.
B. Revising the introductory text.
C. Revising paragraphs (a) through (d).
D. Removing paragraph (e).
E. Redesignating paragraph (f) as paragraph (e).
F. Revising newly redesignated paragraph (e).
The revisions read as follows:
Sec. 412.29 Excluded rehabilitation hospitals and units: Additional
requirements.
In order to be excluded from the prospective payment systems
described in Sec. 412.1(a)(1) and to be paid under the prospective
payment system specified in Sec. 412.1(a)(3), a rehabilitation
hospital or a rehabilitation unit, collectively referred to as
``inpatient rehabilitation facilities,'' must meet the following
requirements:
(a) Provide rehabilitation nursing, physical therapy, occupational
therapy, plus, as needed, speech-language pathology, social services,
psychological services, and prosthetic and orthotic services that--
(1) Are ordered by a rehabilitation physician; that is, a licensed
physician with specialized training and experience in rehabilitation.
(2) Require the care of skilled professionals, such as
rehabilitation nurses, physical therapists, occupational therapists,
speech-language pathologists, prosthetists, orthotists, and
neuropsychologists.
(b) Inpatient Rehabilitation Facility Admission Requirements:
(1) The facility must ensure that each patient it admits meets the
following requirements at the time of admission--
(i) Requires the active and ongoing therapeutic intervention of at
least two therapy disciplines (physical therapy, occupational therapy,
speech-language pathology, or prosthetics/orthotics therapy), one of
which must be physical or occupational therapy.
(ii) Generally requires and can reasonably be expected to actively
participate in at least 3 hours of therapy (physical therapy,
occupational therapy, speech-language pathology, or prosthetics/
orthotics therapy) per day at least 5 days per week and is expected to
make measurable improvement that will be of practical value to improve
the patient's functional capacity or adaptation to impairments. The
required therapy treatments must begin within 36 hours after the
patient's admission to the IRF.
(iii) Is sufficiently stable at the time of admission to the IRF to
be able to actively participate in an intensive rehabilitation program.
(iv) Requires physician supervision by a rehabilitation physician,
as defined in subsection (a)(1), or other licensed treating physician
with specialized training and experience in inpatient rehabilitation.
Generally, the requirement for medical supervision means that the
rehabilitation physician
[[Page 21081]]
must conduct fact-to-face visits with the patient at least 3 days per
week throughout the patient's stay in the IRF to assess the patient
both medically and functionally, as well as to modify the course of
treatment as needed to maximize the patient's capacity to benefit from
the rehabilitation process.
(2) The facility must have and utilize a thorough preadmission
screening process for each potential patient that meets the following
criteria:
(i) It is conducted by a qualified clinician(s) designated by a
rehabilitation physician described in paragraph (a)(1) of this section
within the 48 hours immediately preceding the IRF admission.
(ii) It includes a detailed and comprehensive review of each
prospective patient's condition and medical history.
(iii) It serves as the basis for the initial determination of
whether or not the patient meets the IRF admission requirements in
paragraph (b) of this section.
(iv) It is used to inform a rehabilitation physician who reviews
and documents his or her concurrence with the findings and results of
the preadmission screening.
(v) It is retained in the patient's medical record.
(c) Post-Admission Requirements:
(1) Post-Admission Evaluation. The facility must have and utilize a
post-admission evaluation process in which a rehabilitation physician
completes a post-admission evaluation for each patient within 24 hours
of that patient's admission to the IRF facility in order to document
the patient's status on admission to the IRF, compare it to that noted
in the preadmission screening documentation, and begin development of
the overall individualized plan of care. This post-admission physician
evaluation is to be retained in the patient's medical record.
(2) Individualized Overall Plan of Care. The facility shall ensure
that:
(i) An individualized overall plan of care is developed by a
rehabilitation physician with input from the interdisciplinary team
within 72 hours of the patient's admission to the IRF.
(ii) The individualized overall plan of care is retained in the
patient's medical record.
(d) Interdisciplinary Team. The facility shall ensure that each
patient's treatment is managed using a coordinated interdisciplinary
team approach to treatment.
(1) At a minimum, the interdisciplinary team is to be led by a
rehabilitation physician and further consist of a registered nurse with
specialized training or experience in rehabilitation; a social worker
or case manager (or both); and a licensed or certified therapist from
each therapy discipline involved in treating the patient. All team
members must have current knowledge of the patient's medical and
functional status.
(2) The team must meet at least once per week throughout the
duration of the patient's stay to implement appropriate treatment
services; review the patient's progress toward stated rehabilitation
goals; identify any problems that could impede progress towards those
goals; and, where necessary, reassess previously established goals in
light of impediments, revise the treatment plan in light of new goals,
and monitor continued progress toward those goals.
(3) The rehabilitation physician must document concurrence with all
decisions made by the interdisciplinary team at each team meeting.
(e) Director of Rehabilitation. The IRF must have a director of
rehabilitation who--
(1) In a rehabilitation hospital provides services to the hospital
and its inpatients on a full-time basis, or
(2) In a rehabilitation unit, provides services to the unit and to
its inpatients for at least 20 hours per week; and
(3) Meets the definition of a physician as set forth in Section
1861(r) of the Act; and,
(4) Has had, after completing a one-year hospital internship, at
least two years of training or experience in the medical management of
inpatients requiring rehabilitation services.
4. Section 412.30 is amended by--
A. Revising the section heading.
B. Adding new introductory text.
The revision and addition read as follows:
Sec. 412.30 Exclusion of new and converted rehabilitation units and
expansion of units already excluded.
In order to be excluded from the prospective payment systems
described in Sec. 412.1(a)(1) and to be paid under the prospective
payment system specified in Sec. 412.1(a)(3), a new rehabilitation
unit must meet either the requirements for a new unit under Sec.
412.30(b) or a converted unit under Sec. 412.30(c).
* * * * *
Subpart P--Prospective Payment for Inpatient Rehabilitation
Hospitals and Rehabilitation Units
5. Section 412.604 is amended by revising paragraph (c) to read as
follows:
Sec. 412.604 Conditions for payment under the prospective payment
system for inpatient rehabilitation facilities.
* * * * *
(c) Completion of patient assessment instrument. For each Medicare
Part A fee-for-service patient admitted to or discharged from an IRF on
or after January 1, 2002, the inpatient rehabilitation facility must
complete a patient assessment instrument in accordance with Sec.
412.606. IRFs must also complete a patient assessment instrument in
accordance with Sec. 412.606 for each Medicare Part C (Medicare
Advantage) patient admitted to or discharged from an IRF on or after
October 1, 2009.
* * * * *
6. Section 412.606 is amended by--
A. Revising paragraph (b) introductory text.
B. Revising paragraph (c)(1).
The revisions read as follows:
Sec. 412.606 Patient Assessments.
* * * * *
(b) Patient assessment instrument. An inpatient rehabilitation
facility must use the CMS inpatient rehabilitation facility patient
assessment instrument to assess Medicare Part A fee-for-service and
Medicare Part C (Medicare Advantage) inpatients who--
* * * * *
(c) * * *
(1) A clinician of the inpatient rehabilitation facility must
perform a comprehensive, accurate, standardized, and reproducible
assessment of each Medicare Part A fee-for-service inpatient using the
inpatient rehabilitation facility patient assessment instrument
specified in paragraph (b) of this section as part of his or her
patient assessment in accordance with the schedule described in Sec.
412.610. IRFs must also complete a patient assessment instrument in
accordance with Sec. 412.606 for each Medicare Part C (Medicare
Advantage) patient admitted to or discharged from an IRF on or after
October 1, 2009.
* * * * *
7. Section 412.610 is amended by--
A. Revising paragraph (a).
B. Revising paragraph (b).
C. Revising paragraph (c) introductory text.
D. Revising paragraph (c)(1)(i)(A).
E. Revising paragraph (c)(2)(ii)(B).
F. Revising paragraph (f).
The revisions read as follows:
Sec. 412.610 Assessment schedule.
(a) General. For each Medicare Part A fee-for-service or Medicare
Part C (Medicare Advantage) inpatient, an inpatient rehabilitation
facility must complete a patient assessment instrument as specified in
Sec. 412.606 that covers a time period that is in accordance with the
assessment
[[Page 21082]]
schedule specified in paragraph (c) of this section.
(b) Starting the assessment schedule day count. The first day that
the Medicare Part A fee-for-service or Medicare Part C (Medicare
Advantage) inpatient is furnished Medicare-covered services during his
or her current inpatient rehabilitation facility hospital stay is
counted as day one of the patient assessment schedule.
(c) Assessment schedules and references dates. The inpatient
rehabilitation facility must complete a patient assessment instrument
upon the Medicare Part A fee-for-service or Medicare Part C (Medicare
Advantage) patient's admission and discharge as specified in paragraphs
(c)(1) and (c)(2) of this section.
(1) * * *
(i) * * *
(A) Time period is a span of time that covers calendar days 1
through 3 of the patient's current Medicare Part A fee-for-service or
Medicare Part C (Medicare Advantage) hospitalization;
* * * * *
(2) * * *
(ii) * * *
(B) The patient stops being furnished Medicare Part A fee-for-
service or Medicare Part C (Medicare Advantage) inpatient
rehabilitation services.
* * * * *
(f) Patient assessment instrument record retention. An inpatient
rehabilitation facility must maintain all patient assessment data sets
completed on Medicare Part A fee-for-service patients within the
previous 5 years and Medicare Part C (Medicare Advantage) patients
within the previous 10 years either in a paper format in the patient's
clinical record or in an electronic computer file format that the
inpatient rehabilitation facility can easily obtain and produce upon
request to CMS or its contractors.
8. Section 412.614 is amended by--
A. Revising paragraph (a) introductory text.
B. Removing paragraph (a)(3).
C. Revising paragraph (b)(1).
D. Revising paragraph (d).
E. Revising paragraph (e).
The revisions read as follows:
Sec. 412.614 Transmission of patient assessment data.
(a) Data format; General rule. The inpatient rehabilitation
facility must encode and transmit data for each Medicare Part A fee-
for-service and Medicare Part C (Medicare Advantage) inpatient--
* * * * *
(b) * * *
(1) Electronically transmit complete, accurate, and encoded data
from the patient assessment instrument for each Medicare Part A fee-
for-service and Medicare Part C (Medicare Advantage) inpatient to our
patient data system in accordance with the data format specified in
paragraph (a) of this section; and
* * * * *
(d) Consequences of failure to submit complete and timely IRF-PAI
data, as required under paragraph (c) of this section.
(1) Medicare Part A fee-for-service data.
(i) We assess a penalty when an inpatient rehabilitation facility
does not transmit all of the required data from the patient assessment
instrument for its Medicare Part A fee-for-service patients to our
patient data system in accordance with the transmission timeline in
paragraph (c) of this section.
(ii) If the actual patient assessment data transmission date for a
Medicare Part A fee-for-service patient is later than 10 calendar days
from the transmission date specified in paragraph (c) of this section,
the patient assessment data is considered late and the inpatient
rehabilitation facility receives a payment rate than is 25 percent less
than the payment rate associated with a case-mix group.
(2) Medicare Part C (Medicare Advantage) data. Failure of the
inpatient rehabilitation facility to transmit all of the required
patient assessment instrument data for its Medicare Part C (Medicare
Advantage) patients to our patient data system in accordance with the
transmission timeline in paragraph (c) of this section will result in a
forfeiture of the facility's ability to have any of its Medicare Part C
(Medicare Advantage) data used in the calculations for determining the
facility's compliance with the regulations in Sec. 412.23(b)(2).
(e) Exemption to the consequences for transmitting the IRF-PAI data
late. CMS may waive the consequences of failure to submit complete and
timely IRF-PAI data specified in paragraph (d) of this section when,
due to an extraordinary situation that is beyond the control of an
inpatient rehabilitation facility, the inpatient rehabilitation
facility is unable to transmit the patient assessment data in
accordance with paragraph (c) of this section. Only CMS can determine
if a situation encountered by an inpatient rehabilitation facility is
extraordinary and qualifies as a situation for waiver of the penalty
specified in paragraph (d)(1)(ii) of this section or for waiver of the
forfeiture specified in paragraph (d)(2) of this section. An
extraordinary situation may be due to, but is not limited to, fires,
floods, earthquakes, or similar unusual events that inflect extensive
damage to an inpatient facility. An extraordinary situation may be one
that produces a data transmission problem that is beyond the control of
the inpatient rehabilitation facility, as well as other situations
determined by CMS to be beyond the control of the inpatient
rehabilitation facility. An extraordinary situation must be fully
documented by the inpatient rehabilitation facility.
9. Section 412.618 is amended by revising the introductory text to
read as follows.
Sec. 412.618 Assessment process for interrupted stays.
For purposes of the patient assessment process, if a Medicare Part
A fee-for-service or Medicare Part C (Medicare Advantage) patient has
an interrupted stay, as defined under Sec. 412.602, the following
applies:
* * * * *
Authority: (Catalog of Federal Domestic Assistance Program No.
93.773, Medicare--Hospital Insurance; and Program No. 93.774,
Medicare--Supplementary Medical Insurance Program)
Dated: March 11, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: April 16, 2009.
Charles E. Johnson,
Acting Secretary.
The following addendum will not appear in the Code of Federal
Regulations.
Addendum
In this addendum, we provide the wage index tables referred to
throughout the preamble to this proposed rule. The tables presented
below are as follows:
Table 1--Proposed Inpatient Rehabilitation Facility Wage Index for
Urban Areas for Discharges Occurring from October 1, 2009 through
September 30, 2010
Table 2--Proposed Inpatient Rehabilitation Facility Wage Index for
Rural Areas for Discharges Occurring from October 1, 2009 through
September 30, 2010.
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[FR Doc. E9-10078 Filed 4-28-09; 4:15 pm]
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