With Oct. 1 just around the corner, inpatient rehabilitation facilities (IRFs) should assess their readiness for the policy changes that will become effective for the 2014 fiscal year. The final rule (CMS-1448-F) published July 31 made changes to update payment rates to IRFs and made additional policy changes summarized below:

Updates to payment rates

Consistent with prior patterns seen from the Centers for Medicare & Medicaid Services (CMS), the new payment rates include changes in the values for labor share, LIP percentages, and teaching status – as well as an increase in the standard payment conversion factor to $14,846 (from $14,343 in 2013). The new rates also feature a reduction in the high-cost outlier threshold to $9,272 (from $10,466 ) and updates to CMG weights and average length-of-stay estimates. 

Medicare estimates the overall impact of the changes at $170 million in increased payments to providers during the 2014 fiscal year. Don’t be fooled, though: depending on your specific case mix and labor percentage, you may not see any of these dollars!

Updates to the presumptive methodology code list for calculating the “60-percent” rule

CMS also plans to remove a number of codes from the presumptive compliance list, asserting that the presence of a code alone does not prove compliance with one or more of the 13 conditions specified as qualifying under the rules. These codes fall into a number of categories: non-specific diagnosis codes, arthritis, unilateral upper extremity codes, some congenital anomaly codes, and miscellaneous diagnoses codes. The announced delay until Oct. 1, 2014 is meant to give IRFs time to adjust to the changes. 

IRFs should take advantage of the implementation delay by developing improved overall documentation and coding systems to address coding issues. The removal of the codes from the presumptive methodology does not mean that these cases will not meet CMS criteria. It will be more difficult, however, to prove that the cases meet the requirement. IRFs can counterbalance this by implementing several strategies:

  1. Improve overall documentation related to the conditions.

When removing the codes (for example arthritis codes, orthopedic codes, etc.), the rule does not remove the diagnoses as IRF-approved CMS-13 diagnoses. It does, however, expose the record to medical review to prove compliance. In this case, the removed codes typically will require additional facts to support that they represent a CMS-13 condition. IRFs should evaluate their documentation practices to ensure that the documentation in the medical record, from preadmission through discharge, supports the admitting diagnosis and any other diagnoses that are used to support compliance.

  1. Add Coding Specificity

For areas where non-specific codes have been removed, IRFs still can qualify many of these patients under the presumptive methodology by appropriately assigning more specific codes. For example: CMS proposed to remove 438.20, late effects of cerebrovascular disease, hemiplegia affecting unspecified side.  Codes 438.21 and 438.22 (late effects of cerebrovascular disease, hemiplegia affecting dominant or non-dominant side) will remain.  IRFs can prepare now by working with their coding staffs and IRF physicians to ensure correct yet specific documentation and coding to meet the presumptive requirements.

Quality initiatives: 2014 and beyond

IRFs will continue reporting quality measures on catheter-associated urinary tract infections (CAUTIs) and pressure ulcers. Three additional measures are now required:

  • Percentage of patients who were assessed and appropriately given the seasonal influenza vaccine;
  • Influenza vaccination coverage among healthcare personnel; and
  • All cause-unplanned readmission measures for 30 days post-discharge from IRF.

These quality indicators will impact IRF PPS increase factors during future fiscal years:

2016       CAUTI measure

2015       Pressure ulcer measures (non-risk adjusted and previously

              collected on the IRF-PAI)

2017       All-cause unplanned readmission measures

2017       Influenza vaccination coverage among healthcare workers

2017       Percentage of patients with pressure ulcers that are new or worsened (short stay, risk-adjusted, collected on updated IRF-PAI)

We believe that most IRFs currently are managing seasonal flu vaccines for patients and staff as part of their overall infection control programs, and that the primary increase in cost burden in this area will be related to data collection and reporting. The combined impact, however, can be significant, with overall 2015 fiscal-year costs to implement the new reporting requirements estimated at $9.2 million. IRFs need to fine-tune their processes now to streamline data collection and entry in order to ensure compliance and manage the additional workload.


Of greater concern to IRFs, however, is the all-cause unplanned readmission measure. The measure is a claims-based metric that does not require additional reporting by the IRF, but instead uses complex models to measure rate of return admission to acute or long-term acute hospitals within 30 days of discharge. IRFs currently are receiving data about readmission rates in their Program for Evaluating Payment Patterns Electronic Report (PEPPER), and can use this as a baseline to address current status with respect to this measure.

IRFs need to start to implement effective programs for reducing readmissions immediately. These can include the following steps:

  1. Ensure excellent patient and family education prior to discharge.
  2. Add follow-up calls by your IRF case manager to ensure that all post-discharge services are initiated in a timely manner.
  3. Go beyond an initial follow-up call: check on patient status and progress weekly, and be sure patients know they can call on you for guidance and advice that is not emergent in nature.
  4. Consider a “care navigator” for discharged patients, including a 24-hour, on-call service to answer emergent questions.
  5. Wear out your “transitional apartment:” let patients with complex needs build confidence by having this option prior to discharge.
  6. Review or establish your “independence day” program to ensure patient and family readiness prior to discharge.
  7. Be certain that all patients have access to strong rehabilitation nursing programs as well as functional training in the areas of self-administration of medications, disease management, skin care, and bowel and bladder management.
  8. Think home health. Partner with an exceptional home health agency to be certain that patient needs are being met and that medical issues can be monitored without expensive trips to the ER for conditions that can be managed at home. Avoiding the ER is one of the best strategies for avoiding readmission.

Changes to the IRF patient assessment instrument (IRF-PAI)

While CAUTI information and influenza coverage among healthcare personnel measures will be reported through the National Healthcare Safety Network (NHSN), the IRF-PAI has been revised to capture the information needed to report the remaining clinical quality measures.  Specifically, the IRF-PAI now captures the data elements necessary to accommodate the risk-adjusted, NQF-endorsed pressure ulcer measure and the patient influenza vaccination data elements.

Modifications have been made to the data collection period for information captured on the IRF-PAI to cover the fiscal year. Data reported through NHSN will continue to be collected during the calendar year. Quarterly data submission deadlines will be added for CAUTIs, and a single data submission during influenza season for the healthcare personnel influenza vaccination measure will be required.

When collecting data for quality measures, it is essential that the data be complete, timely, and accurate. Take the time to train and retrain staff frequently to ensure that the information you submit accurately reflects the care you provide.

About the Author

Angela M. Phillips, PT, is president and chief executive officer of Images & Associates. A graduate of the University of Pennsylvania’s School of Allied Health Professions, she has more than 35 years of experience as a consultant, healthcare executive, hospital administrator, educator and clinician. Ms. Phillips is one of the nation’s leading consultants assisting inpatient rehabilitation facilities in operating effectively under the Medicare Prospective Payment System (PPS) and in addressing key issues related to compliance.

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