The Inpatient Rehabilitation Facility (IRF) Prospective Payment System Final Rule for the 2015 fiscal year was published on Aug. 6, 2014. The final published rule:

  • Updates the federal prospective payment rates for the 2015 fiscal year
  • Finalizes a policy to collect data on dollar amounts and modes of therapy provided in the IRF setting
  • Revises the list of diagnosis and impairment group codes that presumptively meet the “60-percent rule”
  • Updates the IRF-PAI to provide the IRF a way to indicate whether the prior treatment and severity requirements have been met for arthritis cases to presumptively meet the “60-percent rule”
  • Revises and updates quality measures and reporting requirementsDelays the effective date for the revisions to the list of diagnosis codes that are used to determine presumptive compliance under the 60-percent rule that were finalized during the 2014 fiscal year
  • Addresses the implementation of ICD-10-CM for IRFs

This article will address several key components of the final rule.

Updates to the Federal Prospective Payment Rates for FY 2015

Consistent with prior years, the regulations update the payment rates, including adjustments to the relative weights and average length-of-stay values for individual CMGs. The final rule also includes adjustments to the wage index and labor-related share amounts of calculating the individual IRF payment for a given CMG. The IRF standard payment conversion factor is increasing from $14,846 in 2014 to $15,198, a rise of 2.37 percent. For IRFs that failed to meet the quality reporting requirements, however, the standard payment conversion Factor will be $14,901 – a substantially smaller increase at only 0.37 percent.

Data Collection on Modes of Therapy

The final rule also finalizes the requirement of the documentation of minutes of therapy by therapy specialty and mode of therapy delivery. But furthermore, the final rule made several other important changes, including the addition of a definition for concurrent therapy, the removal of the requirement to record specific minutes beyond the second full week of therapy, and a decision not to establish limits on the amount of group therapy being provided.

The finalized definitions are:

  • Individual therapy is the provision of therapy services by one licensed or certified therapist (or licensed therapy assistant, under the appropriate direction of a licensed or certified therapist) to one patient at a time (this is sometimes referred to as ‘‘one-on-one’’ therapy.)
  • Co-treatment is the provision of therapy services by more than one licensed or certified therapist (or licensed therapy assistant, under the appropriate direction of a licensed therapist) from different therapy disciplines to one patient at the same time.
  • Concurrent therapy is one licensed or certified therapist treating two patients at the same time, with each patient performing different activities.
  • Group therapy is the provision of therapy services by one licensed or certified therapist (or licensed  therapy assistant, under the appropriate direction of a licensed or certified therapist) treating two to six patients at the same time, with each performing the same or similar activities.

The Centers for Medicare & Medicaid Services (CMS) recognized both the administrative burden required to collect therapy data as well as the average length of stay for IRF patients of 13 days in changing the requirement for data collection from the entire stay to the first two complete weeks of care. The revised requirements are reflected in the changes to the IRF-PAI document sections that have been added to collect therapy data.

Revisions to Diagnosis and Impairment Group Codes for Presumptive Eligibility

An additional 10 status post-amputation diagnoses codes were removed from the list of codes that qualify for presumptive eligibility for the 60-percent rule. These V-codes include:

  • V49.65       Below elbow amputation status.
  • V49.66       Above elbow amputation status.
  • V49.67       Shoulder amputation status.
  • V49.73       Foot amputation status.
  • V49.74       Ankle amputation status.
  • V49.75       Below knee amputation status.
  • V49.76       Above knee amputation status.
  • V49.77       Hip amputation status.
  • V52.0         Fitting and adjustment of artificial arm (complete orpartial).
  • V52.1         Fitting and adjustment of artificial leg (complete or partial).

Concurrent with the removal of the above listed V-codes, the corresponding Impairment Group Codes (IGCs) were removed from Appendix B, which lists the IGCs that meet presumptive compliance criteria. The removed codes include 0005.1 Unilateral Upper Limb Above the Elbow, ICG 0005.2 and Unilateral Upper Limb Below the Elbow.

Additionally, since changes were made to the requirements for the IRF to document compliance with certain arthritis diagnoses, IGCs 0006.1 Rheumatoid Arthritis and 0006.9 Other Arthritis were also removed from Appendix B.

IRF-PAI Updates for Arthritis

After review of the proposed changes to the IRF-PAI to address presumptive compliance for certain arthritis conditions that are to be removed from the list of diagnoses acceptable as qualifying conditions, CMS has finalized a more simplified change. Section 24a for the IRF-PAI has been added as a “yes/no” field to allow the IRF to document whether any of the arthritis conditions recorded in the Impairment Group, Etiologic Diagnosis or Comorbid Conditions sections meet all of the requirements to be counted as appropriate. 

CMS further clarified that if these cases are required for the IRF to meet presumptive eligibility requirements at the end of the qualifying period, then a “limited” medical review on a statistically valid random sample would be completed to determine if these cases qualify.

Revisions and Update Related to Quality Measures and Reporting

As previously noted, IRFs that fail to submit the required quality data will have a reduction in the annual increase factor by 2 percent, and both IRFs that are units of hospitals and free-standing IRFs are required to submit the data.


IRFs will continue to report on previously identified quality measures and will have additional requirements for reporting. The continuing requirements are:

  • CAUTI Measures (NQF #0138)
  • Pressure Ulcer Measures (collected on the IRF-PAI)
  • Patient Influenza Vaccination (NQF #0680)
  • Influenza Vaccination Coverage Among Health Workers (NQF #0431)
  • All-Cause Unplanned Readmission Rates (NQF #2502)

The new requirements that will impact 2017 reductions for failure to report are:

  • National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716); and
  • National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Clostridium Difficile Infection (CDI) Outcome Measure (NQF #1717)

Table 11 from the final rule summarizes the reporting requirements.

Delays in Effective Date for Revision to Diagnostic Codes List

The effective dates for the changes to both the presumptive eligibility code list as well the methodology changes for completing a limited medical record review have been delayed until Oct. 1, 2015 in order to reduce confusion among providers.

Implementation of ICD-10-CM for IRF PPS

The rule also finalizes the previously cross-walked ICD-9-to-ICD-10 code lists ( and makes those codes effective when ICD-10-CM becomes the required medical data code set for use on Medicare claims and IRF-PAI submissions. This will allow IRF-PAI coding to match Medicare coding requirements without further rulemaking.

What Should IRFs Do Now?

In preparation for the coming changes, we continue to recommend that IRFs remain proactive in educating all stakeholders about the requirements for documentation of services. Key tasks to perform now include:

  • Educate therapy staff on the definitions for the modes of therapy delivery to avoid confusion later.
  • Establish tracking mechanisms to capture therapist time with patients in each of the these categories, and ensure that the medical record clearly reflects the minutes spent in each mode of care delivery.
  • If you document using an electronic medical record (EMR), create templates to capture the therapy modes of delivery and automate capture of the minutes.
  • Continue to train physician staff in documentation of conditions to ensure that there is appropriate documentation for coding to the level of specificity required for ICD-10.
  • Review, update, and implement new processes if necessary to ensure collection of the required quality metrics.
  • Review the updated IRF-PAI document carefully.

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.

Contact the Author

To comment on this article go to

Share This Article