Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2025 and Updates to the IRF Quality Reporting Program
| Published date | 29 March 2024 |
| Record Number | 2024-06550 |
| Citation | 89 FR 22246 |
| Court | Centers For Medicare & Medicaid Services |
| Section | Proposed rules |
Federal Register, Volume 89 Issue 62 (Friday, March 29, 2024)
[Federal Register Volume 89, Number 62 (Friday, March 29, 2024)]
[Proposed Rules]
[Pages 22246-22292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06550]
[[Page 22245]]
Vol. 89
Friday,
No. 62
March 29, 2024
Part II Department of Health and Human Services-----------------------------------------------------------------------Centers for Medicare & Medicaid Services-----------------------------------------------------------------------42 CFR Part 412Medicare Program; Inpatient Rehabilitation Facility Prospective Payment
System for Federal Fiscal Year 2025 and Updates to the IRF Quality
Reporting Program; Proposed Rule
Federal Register / Vol. 89 , No. 62 / Friday, March 29, 2024 /
Proposed Rules
[[Page 22246]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1804-P]
RIN 0938-AV31
Medicare Program; Inpatient Rehabilitation Facility Prospective
Payment System for Federal Fiscal Year 2025 and Updates to the IRF
Quality Reporting Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This rule proposes updates to the prospective payment rates
for inpatient rehabilitation facilities (IRFs) for Federal fiscal year
(FY) 2025. As required by statute, this proposed rule includes the
classification and weighting factors for the IRF prospective payment
system's case-mix groups and a description of the methodologies and
data used in computing the prospective payment rates for FY 2025. We
are proposing updates to the Office of Management and Budget (OMB)
market area delineations for the IRF prospective payment system (PPS)
wage index and proposing to apply a 3-year phase-out of the rural
adjustment. This rule also includes proposals for the IRF Quality
Reporting Program (QRP).
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by May 28, 2024.
ADDRESSES: In commenting, please refer to file code CMS-1804-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1804-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
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 to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1804-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Patricia Taft, (410) 786-4561, for general information.
Kim Schwartz, (410) 786-2571, for information about the IRF payment
policies, payment rates and coverage policies.
Ariel Cress, (410) 786-8571, for information about the IRF quality
reporting program.
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
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to
view public comments. CMS will not post on Regulations.gov public
comments that make threats to individuals or institutions or suggest
that the commenter will take actions to harm an individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this rule may be found at https://www.regulations.gov.
I. Executive Summary
A. Purpose
This proposed rule updates the prospective payment rates for IRFs
for FY 2025 (that is, for discharges occurring on or after October 1,
2024, and on or before September 30, 2025) as required under section
1886(j)(3)(C) of the Social Security Act (the Act). As required by
section 1886(j)(5) of the Act, this proposed rule includes the
classification and weighting factors for the IRF PPS's case-mix groups
(CMGs), a description of the methodologies and data used in computing
the prospective payment rates for FY 2025, and revised OMB core-based
statistical area delineations from the July 21, 2023, OMB Bulletin (No.
23-01) for the IRF PPS wage index. This proposed rule includes three
proposals for the FY 2028 IRF QRP and two Requests for Information
(RFIs).
This proposed rule proposes the collection of four new items as
standardized patient assessment data elements and the modification of
one item collected as a standardized patient assessment data element,
in the IRF-Patient Assessment Instrument (IRF-PAI) beginning with the
FY 2028 IRF QRP. This proposed rule also proposes to remove one
assessment item from the IRF-PAI beginning October 1, 2026. In
addition, this proposed rule requests information on quality measure
concepts for the IRF QRP in future years and an IRF star rating system.
B. Summary of Major Provisions
In this proposed rule, we use the methods described in the FY 2024
IRF PPS final rule (88 FR 50956) to update the prospective payment
rates for FY 2025 using updated FY 2023 IRF claims and the most recent
available IRF cost report data, which is FY 2022 IRF cost report data.
We are also proposing to use the revised OMB market area delineations
from the July 21, 2023, OMB Bulletin (No. 23-01) for the IRF PPS wage
index, and to apply a 3-year phase-out of the rural adjustment for
those IRFs changing from rural to urban.
Beginning with the FY 2028 IRF QRP, we are proposing four new items
as standardized patient assessment data elements to be collected and
submitted using the IRF-PAI: one item for Living Situation, two items
for Food, and one item for Utilities. Additionally, we are proposing to
modify the current Transportation item, and to remove one item
(Admission Class) from the IRF-PAI. Finally, we are seeking input from
interested parties on future IRF QRP quality measure concepts and an
IRF star rating system.
C. Summary of Impact
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II. Background
A. Statutory Basis and Scope for IRF PPS Provisions
Section 1886(j) of the Act provides for the implementation of a
per-discharge PPS for inpatient rehabilitation hospitals and inpatient
rehabilitation units of a hospital (collectively, 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. 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) and we provided
a general description of the IRF PPS for FYs 2007 through 2019 in the
FY 2020 IRF PPS final rule (84 FR 39055 through 39057). A general
description of the IRF PPS for FYs 2020 through 2024, along with
detailed background information for various other aspects of the IRF
PPS, is now available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS.
Under the IRF PPS from FY 2002 through FY 2005, the prospective
payment rates were computed across 100 distinct CMGs, as described in
the FY 2002 IRF PPS final rule (66 FR 41316). 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 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
IRFs' unadjusted 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 IRFs 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.
Section 1886(j) of the Act confers broad statutory authority upon
the Secretary to propose refinements to the 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), 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 the
Office of Management and Budget's (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; rebasing and revising the market
basket used to update IRF payments, and updates to the rural, low-
income percentage (LIP), and high-cost outlier adjustments. Beginning
with the FY 2006 IRF PPS final rule (70 FR 47908 through 47917), the
market basket used to update IRF payments was a market basket
reflecting the operating and capital cost structures for freestanding
IRFs, freestanding inpatient psychiatric facilities (IPFs), and long-
term care hospitals (LTCHs). Any reference to the FY 2006 IRF PPS final
rule in this final 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.
In response to COVID-19 Public Health Emergency (PHE), we published
two interim final rules with comment period affecting IRF payment and
conditions for participation. The interim final rule with comment
period (IFC) entitled ``Medicare and Medicaid Programs; Policy and
Regulatory Revisions in Response to the COVID-19 Public Health
Emergency,'' published on April 6, 2020 (85 FR 19230) (hereinafter
referred to as the April 6, 2020 IFC), included certain changes to the
IRF PPS medical supervision requirements at 42 CFR 412.622(a)(3)(iv)
and 412.29(e) during the PHE for COVID-19. In addition, in the April 6,
2020 IFC, we removed the post-admission physician evaluation
requirement at Sec. 412.622(a)(4)(ii) for all
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IRFs during the PHE for COVID-19. In the FY 2021 IRF PPS final rule, to
ease documentation and administrative burden, we permanently removed
the post-admission physician evaluation documentation requirement at
Sec. 412.622(a)(4)(ii) beginning in FY 2021.
A second IFC, entitled ``Medicare and Medicaid Programs, Basic
Health Program, and Exchanges; Additional Policy and Regulatory
Revisions in Response to the COVID-19 Public Health Emergency and Delay
of Certain Reporting Requirements for the Skilled Nursing Facility
Quality Reporting Program,'' was published on May 8, 2020 (85 FR 27550)
(hereinafter referred to as the May 8, 2020 IFC). Among other changes,
the May 8, 2020 IFC included a waiver of the ``3-hour rule'' at Sec.
412.622(a)(3)(ii) to reflect the waiver required by section 3711(a) of
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
(Pub. L. 116-136, enacted on March 27, 2020). In the May 8, 2020 IFC,
we also modified certain IRF coverage and classification requirements
for freestanding IRF hospitals to relieve acute care hospital capacity
concerns in States (or regions, as applicable) experiencing a surge
during the PHE for COVID-19. In addition to the policies adopted in our
IFCs, we responded to the PHE with numerous blanket waivers \1\ and
other flexibilities,\2\ some of which are applicable to the IRF PPS.
CMS finalized these policies in the Calendar Year 2023 Hospital
Outpatient Prospective Payment and Ambulatory Surgical Center Payment
Systems final rule with comment period (87 FR 71748). Subsequently, on
May 11, 2023, the U.S. Department of Health and Human Services
(``HHS'') declared the expiration of the COVID-19 public health
emergency. (See https://www.hhs.gov/about/news/2023/02/09/fact-sheet-covid-19-public-health-emergency-transition-roadmap.html.) As a result,
the ``3-hour rule'' waiver at Sec. 412.622(a)(3)(ii), and other IRF
flexibilities were terminated.
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\1\ CMS, ``COVID-19 Emergency Declaration Blanket Waivers for
Health Care Providers,'' (updated Feb. 19, 2021) (available at
https://www.cms.gov/files/document/summary-covid-19-emergency-declaration-waivers.pdf).
\2\ CMS, ``COVID-19 Frequently Asked Questions (FAQs) on
Medicare Fee-for-Service (FFS) Billing,'' (updated March 5, 2021)
(available at https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf).
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The regulatory history previously included in each rule or notice
issued under the IRF PPS, including a general description of the IRF
PPS for FYs 2007 through 2024, is available on the CMS website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS.
B. Provisions of the Affordable Care Act and the Medicare Access and
CHIP Reauthorization Act of 2015 (MACRA) Affecting the IRF PPS in FY
2012 and Beyond
The Patient Protection and Affordable Care Act (Pub. L. 111-148)
was enacted on March 23, 2010. The Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised
several provisions of the Patient Protection and Affordable Care Act,
was enacted on March 30, 2010. In this proposed rule, we refer to the
two statutes collectively as the ``Affordable Care Act'' or ``ACA''.
The ACA included several provisions that affect the IRF PPS in FYs
2012 and beyond. In addition to what was previously discussed, section
3401(d) of the ACA also added section 1886(j)(3)(C)(ii)(I) of the Act
(providing for a ``productivity adjustment'' for FY 2012 and each
subsequent FY). The productivity adjustment for FY 2025 is discussed in
section V.D. of this proposed rule. Section 1886(j)(3)(C)(ii)(II) of
the Act provides that the application of the productivity adjustment to
the market basket update may result in an update that is less than 0.0
for a FY and in payment rates for a FY being less than such payment
rates for the preceding FY.
Section 3004(b) of the ACA and section 411(b) of the MACRA (Pub. L.
114-10, enacted on April 16, 2015) also addressed the IRF PPS. Section
3004(b) of ACA reassigned the previously designated section 1886(j)(7)
of the Act to section 1886(j)(8) of the Act and inserted a new section
1886(j)(7) of the Act, which contains requirements for the Secretary to
establish a QRP for IRFs. Under that program, data must be submitted in
a form and manner and at a time specified by the Secretary. Beginning
in FY 2014, section 1886(j)(7)(A)(i) of the Act requires the
application of a 2-percentage point reduction to the market basket
increase factor otherwise applicable to an IRF (after application of
paragraphs (C)(iii) and (D) of section 1886(j)(3) of the Act) for a FY
if the IRF does not comply with the requirements of the IRF QRP for
that FY. Application of the 2-percentage point reduction may result in
an update that is less than 0.0 for a FY and in payment rates for a FY
being lower than payment rates for the preceding FY. Reporting-based
reductions to the market basket increase factor are not cumulative;
they only apply for the FY involved. Section 411(b) of the MACRA
amended section 1886(j)(3)(C) of the Act by adding paragraph (iii),
which required us to apply for FY 2018, after the application of
section 1886(j)(3)(C)(ii) of the Act, an increase factor of 1.0 percent
to update the IRF prospective payment rates.
C. Operational Overview of the Current IRF PPS
As described in the FY 2002 IRF PPS final rule (66 FR 41316), upon
the admission and discharge of a Medicare Part A fee-for-service (FFS)
patient, the IRF is required to complete the appropriate sections of a
Patient Assessment Instrument (PAI), designated as the IRF-PAI. In
addition, beginning with IRF discharges occurring on or after October
1, 2009, the IRF is also required to complete the appropriate sections
of the IRF-PAI upon the admission and discharge of each Medicare
Advantage (MA) patient, as described in the FY 2010 IRF PPS final rule
(74 FR 39762) and the FY 2010 IRF PPS correction notice (74 FR 50712).
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-character CMG number. The
first character is an alphabetic character that indicates the
comorbidity tier. The last four characters are numeric characters that
represent the distinct CMG number. A free download of the Grouper
software is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Software.html. The Grouper software is also embedded in the internet
Quality Improvement and Evaluation System (iQIES) User tool available
in iQIES at https://www.cms.gov/medicare/quality-safety-oversight-general-information/iqies.
Once a Medicare Part A FFS patient is discharged, the IRF submits a
Medicare claim as a Health Insurance Portability and Accountability Act
of 1996 (HIPAA) (Pub. L. 104-191, enacted on August 21, 1996) compliant
electronic claim or, if the Administrative Simplification Compliance
Act of 2002 (ASCA) (Pub. L. 107-105, enacted on December 27, 2002)
permits, a paper claim (a UB-04 or a CMS-1450 as appropriate) using the
five-character CMG number and sends it to the appropriate Medicare
Administrative Contractor (MAC). In
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addition, once a MA patient is discharged, in accordance with the
Medicare Claims Processing Manual, chapter 3, section 20.3 (Pub. 100-
04), hospitals (including IRFs) must submit to their MAC an
informational-only bill (type of bill (TOB) 111) that includes
Condition Code 04. This will ensure that the MA days are included in
the hospital's Supplemental Security Income (SSI) ratio (used in
calculating the IRF LIP adjustment) for FY 2007 and beyond. Claims
submitted to Medicare must comply with both ASCA and HIPAA.
Section 3 of the ASCA amended 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, see the ``Medicare Program;
Electronic Submission of Medicare Claims'' final rule (70 FR 71008).
Our instructions for the limited number of Medicare claims submitted on
paper are available at https://www.cms.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
part 160 and part 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 CMS program claim memoranda at https://www.cms.gov/ElectronicBillingEDITrans/ and listed in the addenda to the Medicare
Intermediary Manual, Part 3, section 3600.)
The MAC processes the claim through its software system. This
software system includes pricing programming called the ``Pricer''
software. The Pricer software uses the 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 teaching
status adjustment that became effective as of FY 2006, as discussed in
the FY 2006 IRF PPS final rule (70 FR 47880).
III. Summary of Provisions of the Proposed Rule
In the FY 2025 IRF PPS proposed rule, we are proposing to update
the IRF PPS for FY 2025 and the IRF QRP for FY 2028.
The proposed policy changes and updates to the IRF prospective
payment rates for FY 2025 are as follows:
Update the CMG relative weights and average length of stay
values for FY 2025, in a budget neutral manner, as discussed in section
IV.
Update the IRF PPS payment rates for FY 2025 by the market
basket increase factor, based upon the most current data available,
with a productivity adjustment required by section 1886(j)(3)(C)(ii)(I)
of the Act, as described in section V.
Update the FY 2025 IRF PPS payment rates by the FY 2025
wage index, describe the proposed adoption of the revised OMB market
area delineations, the phase-out of the rural adjustment for those IRFs
changing from rural to urban, and the labor-related share in a budget-
neutral manner, as discussed in section V.
Describe the calculation of the IRF standard payment
conversion factor for FY 2025, as discussed in section V.
Update the outlier threshold amount for FY 2025, as
discussed in section VI.
Update the cost-to-charge ratio (CCR) ceiling and urban/
rural average CCRs for FY 2025, as discussed in section VI.
We also propose updates to the IRF QRP beginning with the FY 2028
IRF QRP and request information in section VII. of this proposed rule
as follows:
Propose to adopt four items as standardized patient
assessment data elements and modify one item collected as a
standardized patient assessment data element in the IRF-PAI.
Remove the Admission Class item from the IRF-PAI.
Request information on IRF QRP quality measure and
concepts.
Request information on an IRF QRP star rating system.
IV. Proposed Update to the Case-Mix Group (CMG) Relative Weights and
Average Length of Stay (ALOS) Values for FY 2025
As specified in Sec. 412.620(b)(1), we calculate a relative weight
for each CMG that is proportional to the resources needed for 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 ALOS values for FY 2025. Typically, we use the most recent
available data to update the CMG relative weights and ALOS values. For
FY 2025, we are proposing to use the FY 2023 IRF claims and FY 2022 IRF
cost report data. These data are the most current and complete data
available at this time. Currently, only a small portion of the FY 2023
IRF cost report data is available for analysis, but the majority of the
FY 2023 IRF claims data are available for analysis. We are proposing
that if more recent data become available after the publication of the
proposed rule and before the publication of the final rule, we would
use such data to determine the FY 2025 CMG relative weights and ALOS
values in the final rule.
We are proposing to apply these data using the same methodologies
that we have used to update the CMG relative weights and ALOS values
each FY since we implemented an update to the methodology. The detailed
cost to charge ratio (CCR) data from the cost reports of IRF provider
units of primary acute care hospitals is used for this methodology,
instead of CCR data from the associated primary care hospitals, to
calculate IRFs' average costs per case, as discussed in the FY 2009 IRF
PPS final rule (73 FR 46372). 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
to calculate the CMG relative weights for this proposed rule is as
follows:
Step 1. We estimate the effects that comorbidities have on costs.
Step 2. We adjust the cost of each Medicare discharge (case) to
reflect the effects found in Step 1.
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Step 3. We use the adjusted costs from Step 2 to calculate CMG
relative weights, using the hospital-specific relative value method.
Step 4. We normalize the FY 2025 CMG relative weights using a
normalization factor that results in the average CMG relative weights
in FY 2025 being the same as the average CMG relative weights in the FY
2024 IRF PPS final rule (88 FR 50956).
Consistent with the methodology that we have used to update the IRF
classification system in each instance in the past, we are proposing to
update the CMG relative weights for FY 2025 in such a way that total
estimated aggregate payments to IRFs for FY 2025 are the same with or
without the changes (that is, in a budget-neutral manner) by applying a
budget neutrality factor to the standard payment amount. To calculate
the appropriate budget neutrality factor for use in updating the FY
2025 CMG relative weights, we use the following steps:
Step 1. Calculate the estimated total amount of IRF PPS payments
for FY 2025 (with no changes to the CMG relative weights).
Step 2. Calculate the estimated total amount of IRF PPS payments
for FY 2025 by applying the changes to the CMG relative weights (as
discussed in this proposed rule).
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2 to determine the budget neutrality factor of
0.9973 that would maintain the same total estimated aggregate payments
in FY 2025 with and without the changes to the proposed CMG relative
weights.
Step 4. Apply the budget neutrality factor from step 3 to the FY
2025 IRF PPS standard payment amount after the application of the
budget-neutral wage adjustment factor.
In section V. of this proposed rule, we discuss the use of the
existing methodology to calculate the standard payment conversion
factor for FY 2025.
In Table 2, ``Relative Weights and Average Length of Stay Values
for Case-Mix Groups,'' we present the proposed CMGs, the comorbidity
tiers, the corresponding relative weights, and the ALOS values for each
CMG and tier for FY 2025. The ALOS 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.
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Generally, updates to the CMG relative weights result in some
increases and some decreases to the CMG relative weight values. Table 2
shows how we estimate that the application of the proposed revisions
for FY 2025 would affect particular CMG relative weight values, which
would affect the overall distribution of payments within CMGs and
tiers. We note that, because we implement the CMG relative weight
revisions in a budget-neutral manner (as previously described), total
estimated aggregate payments to IRFs for FY 2025 would not be affected
as a result of the proposed CMG relative weight revisions. However, the
proposed revisions would affect the distribution of payments within
CMGs and tiers.
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As shown in Table 3, 99.2 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 for FY 2025. The proposed changes in the ALOS
values for FY 2025, compared with the FY 2024 ALOS values, are small
and do not show any particular trends in IRF length of stay patterns.
We invite public comment on our proposed updates to the CMG
relative weights and ALOS values for FY 2025.
V. Proposed FY 2025 IRF PPS Payment Update
A. Background
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 for which payment is
made under the IRF PPS. According to section 1886(j)(3)(A)(i) of the
Act, the increase factor shall be used to update the IRF prospective
payment rates for each FY. Section 1886(j)(3)(C)(ii)(I) of the Act
requires the application of the productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act. Thus, in this proposed rule,
we are proposing to update the IRF PPS payments for FY 2025 by a market
basket increase factor as required by section 1886(j)(3)(C) of the Act
based upon the most current data available, with a productivity
adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act.
We have utilized various market baskets through the years in the
IRF PPS. For a discussion of these market baskets, we refer readers to
the FY 2016 IRF PPS final rule (80 FR 47046).
In FY 2016, we finalized the use of a 2012-based IRF market basket,
using Medicare cost report data for both freestanding and hospital-
based IRFs (80 FR 47049 through 47068). In FY 2020, we finalized a
rebased and revised IRF market basket to reflect a 2016 base year. The
FY 2020 IRF PPS final rule (84 FR 39071 through 39086) contains a
complete discussion of the development of the 2016-based IRF market
basket. Beginning with FY 2024, we finalized a rebased and revised IRF
market basket to reflect a 2021 base year. The FY 2024 IRF PPS final
rule (88 FR 50966 through 50988) contains a complete discussion of the
development of the 2021-based IRF market basket.
B. Proposed FY 2025 Market Basket Update and Productivity Adjustment
1. Proposed FY 2025 Market Basket Update
For FY 2025 (that is, beginning October 1, 2024, and ending
September 30, 2025), we are proposing to update the IRF PPS payments by
a market basket increase factor as required by section 1886(j)(3)(C) of
the Act, with a productivity adjustment as required by section
1886(j)(3)(C)(ii)(I) of the Act. For FY 2025, we are proposing to use
the same methodology described in the FY 2024 IRF PPS final rule (88 FR
50982 through 50984).
Consistent with historical practice, we are proposing to estimate
the market basket update for the IRF PPS for FY 2025 based on IHS
Global Inc.'s (IGI's) forecast using the most recent available data.
Based on IGI's fourth quarter 2023 forecast with historical data
through the third quarter of 2023, the proposed 2021-based IRF market
basket increase factor for FY 2025 is projected to be 3.2 percent. We
are also proposing that if more recent data become available after the
publication of the proposed rule and before the publication of the
final rule (for example, a more recent estimate of the market basket
update or productivity adjustment), we would use such data, if
appropriate, to determine the FY 2025 market basket update in the final
rule.
2. Proposed FY 2025 Productivity Adjustment
According to section 1886(j)(3)(C)(i) of the Act, the Secretary
shall establish an increase factor based on an appropriate percentage
increase in a market basket of goods and services. Section
1886(j)(3)(C)(ii) of the Act requires that, after establishing the
increase factor for a FY, the Secretary shall reduce such increase
factor for FY 2012 and each subsequent FY, by the productivity
adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act.
Section 1886(b)(3)(B)(xi)(II) of the Act sets forth the definition of
this productivity adjustment. The statute defines the productivity
adjustment to be equal to the 10-year moving average of changes in
annual economy-wide, private nonfarm business multifactor productivity
(as projected by the Secretary for the 10-year period ending with the
applicable FY, year, cost reporting period, or other annual period)
(the ``productivity adjustment''). The U.S. Department of Labor's
Bureau of Labor Statistics (BLS) publishes the official measures of
productivity for the U.S. economy. We note that previously the
productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the
Act, was referred to by BLS as private nonfarm business multifactor
productivity. Beginning with the November 18, 2021, release of
productivity data, BLS replaced the term multifactor productivity (MFP)
with total factor productivity (TFP). BLS noted that this is a change
in terminology only and will not affect the data or methodology. As a
result of this change, the productivity measure referenced in section
1886(b)(3)(B)(xi)(II) is now published by BLS as private nonfarm
business total factor productivity. However, as mentioned above, the
data and methods are unchanged. Please see www.bls.gov for the BLS
historical published TFP data. A complete description of IGI's TFP
projection methodology is available on the CMS website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information. In
addition, in the FY 2022 IRF final rule (86 FR 42374), we noted that
effective with FY 2022 and forward, CMS changed the name of this
adjustment to refer to it as the productivity adjustment rather than
the MFP adjustment.
Using IGI's fourth quarter 2023 forecast, the 10-year moving
average
[[Page 22256]]
growth of TFP for FY 2025 is projected to be 0.4 percent. In accordance
with section 1886(j)(3)(C) of the Act, we are proposing to base the FY
2025 market basket update, which is used to determine the applicable
percentage increase for the IRF payments, on IGI's fourth quarter 2023
forecast of the 2021-based IRF market basket. We are proposing to then
reduce the market basket percentage increase by the estimated
productivity adjustment for FY 2025 of 0.4 percentage point (the 10-
year moving average growth of TFP for the period ending FY 2025 based
on IGI's fourth quarter 2023 forecast). Therefore, the proposed FY 2025
IRF update is equal to 2.8 percent (3.2 percent market basket
percentage increase reduced by the 0.4 percentage point productivity
adjustment). Furthermore, we are proposing that if more recent data
become available after the publication of the proposed rule and before
the publication of the final rule (for example, a more recent estimate
of the market basket percentage increase and/or productivity
adjustment), we would use such data, if appropriate, to determine the
FY 2025 market basket percentage increase and productivity adjustment
in the final rule.
For FY 2025, the Medicare Payment Advisory Commission (MedPAC)
recommends that we reduce IRF PPS payment rates by 5 percent.\3\ As
discussed, and in accordance with sections 1886(j)(3)(C) and
1886(j)(3)(D) of the Act, the Secretary is proposing to update the IRF
PPS payment rates for FY 2025 by the proposed IRF market basket update
of 2.8 percent. Section 1886(j)(3)(C) of the Act does not provide the
Secretary with the authority to apply a different update factor to IRF
PPS payment rates for FY 2025.
---------------------------------------------------------------------------
\3\ https://www.medpac.gov/wp-content/uploads/2025/03/Mar25_MedPAC_ReportToCongress_SEC.pdf.
---------------------------------------------------------------------------
We invite public comment on our proposals for the FY 2025 market
basket percentage increase and productivity adjustment.
C. Proposed Labor-Related Share for FY 2025
Section 1886(j)(6) of the Act specifies that the Secretary is to
adjust the proportion (as estimated by the Secretary from time to time)
of IRFs' costs that are attributable to wages and wage-related costs,
of the prospective payment rates computed under section 1886(j)(3) of
the Act, for area differences in wage levels 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 such facilities. The labor-related share is
determined by identifying the national average proportion of total
costs that are related to, influenced by, or vary with the local labor
market. We are proposing to continue to classify a cost category as
labor-related if the costs are labor-intensive and vary with the local
labor market.
Based on our definition of the labor-related share and the cost
categories in the 2021-based IRF market basket, we are proposing to
calculate the labor-related share for FY 2025 as the sum of the FY 2025
relative importance of Wages and Salaries, Employee Benefits,
Professional Fees: Labor-Related, Administrative and Facilities Support
Services, Installation, Maintenance, and Repair Services, All Other:
Labor-Related Services, and a portion of the Capital-Related relative
importance from the 2021-based IRF market basket. For more details
regarding the methodology for determining specific cost categories for
inclusion in the 2021-based IRF labor-related share, see the FY 2024
IRF PPS final rule (88 FR 50985 through 50988).
The relative importance reflects the different rates of price
change for these cost categories between the base year (2021) and FY
2025. We calculate the labor-related relative importance from the IRF
market basket, and it approximates the labor-related portion of the
total costs after taking into account historical and projected price
changes between the base year and FY 2025. The price proxies that move
the different cost categories in the market basket do not necessarily
change at the same rate, and the relative importance captures these
changes. Based on IGI's fourth quarter 2023 forecast of the 2021-based
IRF market basket, the sum of the FY 2025 relative importance for Wages
and Salaries, Employee Benefits, Professional Fees: Labor-Related,
Administrative and Facilities Support Services, Installation
Maintenance & Repair Services, and All Other: Labor-Related Services is
70.5 percent. We are proposing that the portion of Capital-Related
costs that are influenced by the local labor market is 46 percent.
Since the relative importance for Capital-Related costs is 8.1 percent
of the 2021-based IRF market basket for FY 2025, we are proposing to
take 46 percent of 8.1 percent to determine the labor-related share of
Capital-Related costs for FY 2025 of 3.7 percent. Therefore, we are
proposing a total labor-related share for FY 2025 of 74.2 percent (the
sum of 70.5 percent for the proposed labor-related share of operating
costs and 3.7 percent for the proposed labor-related share of Capital-
Related costs). We are proposing that if more recent data become
available after publication of the proposed rule and before the
publication of the final rule (for example, a more recent estimate of
the labor-related share), we would use such data, if appropriate, to
determine the FY 2025 IRF labor-related share in the final rule.
Table 4 shows the current estimate of the proposed FY 2025 labor-
related share and the FY 2024 final labor-related share using the 2021-
based IRF market basket relative importance.
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We invite public comments on the proposed labor-related share for
FY 2025.
D. Wage Adjustment for FY 2025
1. Background
Section 1886(j)(6) of the Act requires the Secretary to adjust the
proportion of rehabilitation facilities' costs attributable to wages
and wage-related costs (as estimated by the Secretary from time to
time) 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
adjustment or updates made under section 1886(j)(6) of the Act for a FY
are made in a budget-neutral manner.
In the FY 2023 IRF PPS final rule (87 FR 47054 through 47056) we
finalized a policy to apply a 5-percent cap on any decrease to a
provider's wage index from its wage index in the prior year, regardless
of the circumstances causing the decline. We amended IRF PPS
regulations at Sec. 412.624(e)(1)(ii) to reflect this permanent cap on
wage index decreases. Additionally, we finalized a policy that a new
IRF would be paid the wage index for the area in which it is
geographically located for its first full or partial FY with no cap
applied because a new IRF would not have a wage index in the prior FY.
A full discussion of the adoption of this policy is found in the FY
2023 IRF PPS final rule.
For FY 2025, we propose to maintain the policies and methodologies
described in the FY 2024 IRF PPS final rule (88 FR 50956) related to
the labor market area definitions and the wage index methodology for
areas with wage data. Thus, we propose to use the core based
statistical areas (CBSAs) labor market area definitions and the FY 2025
pre-reclassification and pre-floor hospital wage index data. In
accordance with section 1886(d)(3)(E) of the Act, the FY 2025 pre-
reclassification and pre-floor hospital wage index is based on data
submitted for hospital cost reporting periods beginning on or after
October 1, 2020, and before October 1, 2021 (that is, FY 2021 cost
report data).
The labor market designations made by the 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 44299) to address those
geographic areas where there are no hospitals and, thus, no hospital
wage index data on which to base the calculation for the FY 2025 IRF
PPS wage index. For FY 2025, the only rural area without wage index
data available is North Dakota. We have determined that the borders of
18 rural counties are local and contiguous with 8 urban counties.
Therefore, under this methodology, the wage indexes for the counties of
Burleigh/Morton/Oliver (CBSA 13900: 0.9020), Cass (CBSA 22020: 0.8763),
Grand Forks (CBSA 24220: 0.7865), and McHenry/Renville/Ward (CBSA
33500: 0.7686) are averaged, resulting in an imputed rural wage index
of 0.8334 for rural North Dakota for FY 2025. In past years for rural
Puerto Rico, we did not apply this methodology due to the distinct
economic circumstances there; due to the close proximity of almost all
of Puerto Rico's various urban and non-urban areas, this methodology
would produce a wage index for rural Puerto Rico that is higher than
that in half of its urban areas. However, because rural Puerto Rico now
has hospital wage index data on which to base an area wage adjustment,
we will not apply this policy for FY 2025. For urban areas without
specific hospital wage index data, we will continue using the average
wage indexes of all urban areas within the State to serve as a
reasonable proxy for the wage index of that urban CBSA as proposed and
finalized in FY 2006 (70 FR 47927). For FY 2025, the only urban area
without wage index data available is CBSA 25980, Hinesville-Fort
Stewart, GA.
We invite public comment on our proposal regarding the Wage
Adjustment for FY 2025.
2. Core-Based Statistical Areas (CBSAs) for the FY 2025 IRF Wage Index
The wage index used for the IRF PPS is calculated using the pre-
reclassification and pre-floor inpatient PPS (IPPS) wage index data and
is assigned to the IRF on the basis of the labor market area in which
the IRF is geographically located. IRF labor market areas are
delineated based on the CBSAs established by the OMB. The CBSA
delineations (which were implemented
[[Page 22258]]
for the IRF PPS beginning with FY 2016) are based on revised OMB
delineations issued on February 28, 2013, in OMB Bulletin No. 13-01.
OMB Bulletin No. 13-01 established revised delineations for
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas in the United States and Puerto Rico based
on the 2010 Census and provided guidance on the use of the delineations
of these statistical areas using standards published in the June 28,
2010 Federal Register (75 FR 37246 through 37252). We refer readers to
the FY 2016 IRF PPS final rule (80 FR 47068 through 47076) for a full
discussion of our implementation of the OMB labor market area
delineations beginning with the FY 2016 wage index.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. Additionally, OMB
occasionally issues updates and revisions to the statistical areas in
between decennial censuses to reflect the recognition of new areas or
the addition of counties to existing areas. In some instances, these
updates merge formerly separate areas, transfer components of an area
from one area to another or drop components from an area. On July 15,
2015, OMB issued OMB Bulletin No. 15-01, which provides minor updates
to and supersedes OMB Bulletin No. 13-01 that was issued on February
28, 2013. The attachment to OMB Bulletin No. 15-01 provides detailed
information on the update to statistical areas since February 28, 2013.
The updates provided in OMB Bulletin No. 15-01 are based on the
application of the 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas to Census Bureau population estimates
for July 1, 2012, and July 1, 2013.
In the FY 2018 IRF PPS final rule (82 FR 36250 through 36251), we
adopted the updates set forth in OMB Bulletin No. 15-01 effective
October 1, 2017, beginning with the FY 2018 IRF wage index. For a
complete discussion of the adoption of the updates set forth in OMB
Bulletin No. 15-01, we refer readers to the FY 2018 IRF PPS final rule.
In the FY 2019 IRF PPS final rule (83 FR 38527), we continued to use
the OMB delineations that were adopted beginning with FY 2016 to
calculate the area wage indexes, with updates set forth in OMB Bulletin
No. 15-01 that we adopted beginning with the FY 2018 wage index.
On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which
provided updates to and superseded OMB Bulletin No. 15-01 that was
issued on July 15, 2015. The attachments to OMB Bulletin No. 17-01
provide detailed information on the update to statistical areas since
July 15, 2015, and are based on the application of the 2010 Standards
for Delineating Metropolitan and Micropolitan Statistical Areas to
Census Bureau population estimates for July 1, 2014, and July 1, 2015.
In the FY 2020 IRF PPS final rule (84 FR 39090 through 39091), we
adopted the updates set forth in OMB Bulletin No. 17-01 effective
October 1, 2019, beginning with the FY 2020 IRF wage index.
On April 10, 2018, OMB issued OMB Bulletin No. 18-03, which
superseded the August 15, 2017 OMB Bulletin No. 17-01, and on September
14, 2018, OMB issued OMB Bulletin No. 18-04, which superseded the April
10, 2018 OMB Bulletin No. 18-03. These bulletins established revised
delineations for Metropolitan Statistical Areas, Micropolitan
Statistical Areas, and Combined Statistical Areas, and provided
guidance on the use of the delineations of these statistical areas. A
copy of this bulletin may be obtained at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf.
To this end, as discussed in the FY 2021 IRF PPS proposed (85 FR
22075 through 22079) and final (85 FR 48434 through 48440) rules, we
adopted the revised OMB delineations identified in OMB Bulletin No. 18-
04 (available at https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf) beginning October 1, 2020, including a 1-year
transition for FY 2021 under which we applied a 5-percent cap on any
decrease in an IRF's wage index compared to its wage index for the
prior fiscal year (FY 2020). The updated OMB delineations more
accurately reflect the contemporary urban and rural nature of areas
across the country, and the use of such delineations allows us to
determine more accurately the appropriate wage index and rate tables to
apply under the IRF PPS. OMB issued further revised CBSA delineations
in OMB Bulletin No. 20-01, on March 6, 2020 (available on the web at
https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf). However, we determined that the changes in OMB Bulletin No.
20-01 do not impact the CBSA-based labor market area delineations
adopted in FY 2021. Therefore, we did not propose to adopt the revised
OMB delineations identified in OMB Bulletin No. 20-01 for FY 2022
through FY 2024.
On July 21, 2023, OMB issued OMB Bulletin No. 23-01 (available at
https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf) which updates and supersedes OMB Bulletin No. 20-01 based upon
the 2020 Standards for Delineating Core Based Statistical Areas (``the
2020 Standards'') published by the Office of Management and Budget
(OMB) on July 16, 2021 (86 FR 37770). OMB Bulletin No. 23-01 revised
CBSA delineations which are comprised of counties and equivalent
entities (for example, boroughs, a city and borough, and a municipality
in Alaska, planning regions in Connecticut, parishes in Louisiana,
municipios in Puerto Rico, and independent cities in Maryland,
Missouri, Nevada, and Virginia). For FY 2025, we propose to adopt the
revised OMB delineations identified in OMB Bulletin No. 23-01.
a. Urban Counties Becoming Rural
As previously discussed, we are proposing to implement the new OMB
statistical area delineations (based upon the 2020 decennial Census
data) beginning in FY 2025 for the IRF PPS wage index. Our analysis
shows that a total of 54 counties (and county equivalents) that are
currently considered part of an urban CBSA would be considered located
in a rural area, for IRF PPS payment beginning in FY 2025, if we adopt
the new OMB delineations. Table 5 lists the 54 urban counties that
would be rural if we finalize our proposal to implement the new OMB
delineations.
BILLING CODE 4120-01-P
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[[Page 22260]]
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We are proposing that the wage data for all hospitals located in
the counties listed in Table 5 now be considered rural when their
respective State's rural wage index value is calculated. This rural
wage index value would be used under the IRF PPS.
b. Rural Counties Becoming Urban
Analysis of the new OMB delineations (based upon the 2020 decennial
Census data) shows that a total of 54 counties (and county equivalents)
that are currently located in rural areas would be in urban areas if we
finalize our proposal to implement the new OMB delineations. Table 6
lists the 54 rural counties that would be urban if we finalize this
proposal.
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[[Page 22262]]
[GRAPHIC] [TIFF OMITTED] TP29MR24.026
We are proposing that when calculating the area wage index, the
wage data for hospitals located in these counties would be included in
their new respective urban CBSAs.
c. Urban Counties Moving to a Different Urban CBSA
In addition to rural counties becoming urban and urban counties
becoming rural, several urban counties would shift from one urban CBSA
to another urban CBSA under our proposal to adopt the new OMB
delineations. In other cases, if we adopt the new OMB delineations,
counties would shift between existing and new CBSAs, changing the
constituent makeup of the CBSAs.
In one type of change, an entire CBSA would be subsumed by another
CBSA. For example, CBSA 31460 (Madera, CA) currently is a single county
(Madera, CA) CBSA. Madera County would be a part of CBSA 23420 (Fresno,
CA) under the new OMB delineations.
In another type of change, some CBSAs have counties that would
split off to become part of, or to form, entirely new labor market
areas. For example, CBSA 29404 (Lake County-Kenosha County, IL-WI)
currently is comprised of two counties (Lake County, IL and Kenosha
County, WI). Under the new OMB delineations, Kenosha County would split
off and form the new CBSA 28450 (Kenosha, WI), while Lake County would
remain in CBSA 29404.
Finally, in some cases, a CBSA would lose counties to another
existing CBSA if we adopt the new OMB delineations. For example, Meade
County, KY, would move from CBSA 21060 (Elizabethtown-Fort Knox, KY) to
CBSA 31140 (Louisville/Jefferson County, KY-IN). CBSA 21060 would still
exist in the new labor market delineations with fewer constituent
counties. Table 7 lists the urban counties that would move from one
urban CBSA to another urban CBSA under the new OMB delineations.
[[Page 22263]]
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[[Page 22264]]
[GRAPHIC] [TIFF OMITTED] TP29MR24.028
If providers located in these counties move from one CBSA to
another under the new OMB delineations, there may be impacts, both
negative and positive, upon their specific wage index values.
[[Page 22265]]
In other cases, adopting the revised OMB delineations would involve
a change only in CBSA name and/or number, while the CBSA continues to
encompass the same constituent counties. For example, CBSA 19430
(Dayton-Kettering, OH) would experience a change to its name and become
CBSA 19430 (Dayton-Kettering-Beavercreek, OH), while all of its three
constituent counties would remain the same. We consider these proposed
changes (where only the CBSA name and/or number would change) to be
inconsequential changes with respect to the IRF PPS wage index. Table 8
sets forth a list of such CBSAs where there would be a change in CBSA
name and/or number only if we adopt the revised OMB delineations.
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[GRAPHIC] [TIFF OMITTED] TP29MR24.030
[[Page 22267]]
[GRAPHIC] [TIFF OMITTED] TP29MR24.031
BILLING CODE 4120-01-C
d. Change to County-Equivalents in the State of Connecticut
The June 6, 2022 Census Bureau Notice (87 FR 34235--34240), OMB
Bulletin No. 23-01 replaced the 8 counties in Connecticut with 9 new
``Planning Regions.'' Planning regions now serve as county-equivalents
within the CBSA system. We are proposing to adopt the planning regions
as county equivalents for wage index purposes. We believe it is
necessary to adopt this migration from counties to planning region
county-equivalents in order to maintain consistency with OMB updates.
We are providing the following crosswalk with the current and proposed
FIPS county and county-equivalent codes and CBSA assignments.
[GRAPHIC] [TIFF OMITTED] TP29MR24.032
3. Transition Policy for FY 2025 Wage Index Changes
Overall, we believe that implementing the new OMB delineations
would result in wage index values being more representative of the
actual costs of labor in a given area. We recognize that some providers
(10 percent) would have a higher wage index due to our proposed
implementation of the new labor market area delineations. However, we
also recognize that more providers (16 percent) would experience
decreases in wage index values as a result of our proposed
implementation of the new labor market area delineations. Our analysis
for the FY 2025 proposed rule indicates that 16 IRFs will experience a
change in either rural or urban designations. Of these, 8 facilities
designated as rural in FY 2024 would be designated as urban in FY 2025.
Based upon the CBSA delineations, those rural IRFs that change from
rural to urban would lose the 14.9 percent rural adjustment. To
mitigate the financial impacts of this loss, we are proposing a
transition for these facilities, as discussed further below.
CMS recognizes that IRFs in certain areas may experience reduced
payments due to the proposed adoption of the revised OMB delineations
and has finalized transition policies to mitigate negative financial
impacts and provide stability to year-to-year wage index variations. In
the FY 2021 final rule (85 FR 48434), CMS finalized a wage index
transition policy to apply a 5 percent cap for IRFs that may experience
decreases in their final wage index from the prior fiscal year. In FY
2023, the 5 percent cap policy was made permanent. This 5 percent cap
on reductions policy is discussed in further detail in FY 2023 final
rule at 87 FR 47054 through 47056. It is CMS's long held opinion that
revised labor market delineations should be adopted as soon as is
possible to maintain the integrity of the wage index system. We believe
the 5- percent cap policy will sufficiently mitigate significant
disruptive financial impacts on hospitals negatively affected by the
proposed adoption of the revised OMB delineations. Besides the rural
adjustment transition discussed immediately below, we do not believe
any additional transition is necessary
[[Page 22268]]
considering that the current cap on wage index decreases, which was not
in place when implementing prior decennial census updates in FY 2006
and FY 2015, ensures that an IRFs wage index would not be less than 95
percent of its final wage index for the prior year.
Consistent with the transition policy adopted in FY 2006 (70 FR
47923 \4\ through 47927 \5\), we considered the appropriateness of
applying a 3-year phase-out of the rural adjustment for IRFs located in
rural counties that would become urban under the new OMB delineations,
given the potentially significant payment impacts for these facilities.
We continue to believe, as discussed in the FY 2006 IRF final rule (70
FR 47880 \6\), that the phase-out of the rural adjustment transition
period for these facilities specifically is appropriate because, as a
group, we expect these IRFs would experience a steeper and more abrupt
reduction in their payments compared to other IRFs. Therefore, we are
proposing a budget neutral three-year phase-out of the rural adjustment
for existing FY 2024 rural IRFs that will become urban in FY 2025 and
that experience a loss in payments due to changes from the new CBSA
delineations. Accordingly, the incremental steps needed to reduce the
impact of the loss of the FY 2024 rural adjustment of 14.9 percent will
be phased out over FYs 2025, 2026 and 2027. This policy will allow
rural IRFs which would be classified as urban in FY 2025 to receive
two-thirds of the 2024 rural adjustment for FY 2025. For FY 2026, these
IRFs will receive the full FY 2026 wage index and one-third of the FY
2024 rural adjustment. For FY 2027, these IRFs will receive the full FY
2027 wage index without a rural adjustment. We believe a three-year
budget-neutral phase-out of the rural adjustment for IRFs that
transition from rural to urban status under the new CBSA delineations
would best accomplish the goals of mitigating the loss of the rural
adjustment for existing FY 2024 rural IRFs. The purpose of the gradual
phase-out of the rural adjustment for these facilities is to alleviate
the significant payment implications for existing rural IRFs that may
need time to adjust to the loss of their FY 2024 rural payment
adjustment or that experience a reduction in payments solely because of
this redesignation. As stated, this policy is specifically for rural
IRFs that become urban in FY 2025 and that experience a loss in
payments due to changes from the new CBSA delineations. Thus, we are
not implementing a transition policy for urban facilities that become
rural in FY 2025 because these IRFs will receive the full rural
adjustment of 14.9 percent beginning October 1, 2024.
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\4\ https://www.federalregister.gov/citation/70-FR-47923.
\5\ https://www.federalregister.gov/citation/70-FR-47927.
\6\ https://www.federalregister.gov/citation/70-FR-47880.
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We invite comments on our proposed implementation of revised labor
market area delineations and on the proposed transition policy for
rural IRFs that would be designated as urban under the new CBSA
delineations. The proposed wage index applicable to FY 2025 is set
forth in Table A available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/IRF-Rules-and-Related-Files.html. Table A provides a crosswalk between the
FY 2024 wage index for a provider using the current OMB delineations in
effect in FY 2024 and the FY 2025 wage index using the proposed revised
OMB delineations.
4. IRF Budget-Neutral Wage Adjustment Factor Methodology
To calculate the wage-adjusted facility payment for the proposed
payment rates set forth in this proposed rule, we multiply the
unadjusted Federal payment rate for IRFs by the FY 2025 labor-related
share based on the 2021-based IRF market basket relative importance
(74.2 percent) to determine the labor-related portion of the standard
payment amount. (A full discussion of the calculation of the labor-
related share appears in section VI.E. of this proposed rule.) We would
then multiply the labor-related portion by the applicable IRF wage
index. The wage index tables are available on the CMS website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/IRF-Rules-and-Related-Files.html.
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
calculate a budget-neutral wage adjustment factor as established in the
FY 2004 IRF PPS final rule (68 FR 45689) and codified at Sec.
412.624(e)(1), as described in the steps below. We use the listed steps
to ensure that the FY 2025 IRF standard payment conversion factor
reflects the update to the wage indexes (based on the FY 2021 hospital
cost report data) and the update to the labor-related share, in a
budget-neutral manner:
Step 1. Calculate the total amount of estimated IRF PPS payments
using the labor-related share and the wage indexes from FY 2024 (as
published in the FY 2024 IRF PPS final rule (88 FR 50956)).
Step 2. Calculate the total amount of estimated IRF PPS payments
using the FY 2025 wage index values (based on updated hospital wage
data and considering the permanent cap on wage index decreases policy)
and the FY 2025 proposed labor-related share of 74.2 percent.
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2. The resulting quotient is the FY 2025 budget-
neutral wage adjustment factor of 0.9928.
Step 4. Apply the budget neutrality factor from step 3 to the FY
2025 IRF PPS standard payment amount after the application of the
increase factor to determine the FY 2025 standard payment conversion
factor.
We discuss the calculation of the standard payment conversion
factor for FY 2025 in section VI.G. of this proposed rule.
We invite public comment on our proposals regarding the Wage
Adjustment for FY 2025.
G. Description of the Proposed IRF Standard Payment Conversion Factor
and Payment Rates for FY 2025
To calculate the proposed standard payment conversion factor for FY
2025, as illustrated in Table 10, we begin by applying the proposed
increase factor for FY 2025, as adjusted in accordance with sections
1886(j)(3)(C) of the Act, to the standard payment conversion factor for
FY 2024 ($18,541). Applying the proposed 2.8 payment update for FY 2025
to the standard payment conversion factor for FY 2024 of $18,541 yields
a standard payment amount of $19,060. Then, we apply the proposed
budget neutrality factor for the FY 2025 wage index (taking into
account the policy placing a permanent cap on decreases in the wage
index), and labor-related share of 0.9928, which results in a standard
payment amount of $18,923. We next apply the proposed budget neutrality
factor for the CMG relative weights of 0.9973, which results in the
proposed standard payment conversion factor of $18,872 for FY 2025.
We invite public comment on the proposed FY 2025 standard payment
conversion factor.
[[Page 22269]]
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We then apply the proposed CMG relative weights described in
section IV. of this proposed rule to the FY 2025 standard payment
conversion factor ($18,872), to determine the unadjusted IRF
prospective payment rates for FY 2025. The unadjusted prospective
payment rates for FY 2025 are shown in Table 11.
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H. Example of the Methodology for Adjusting the Prospective Payment
Rates
Table 12 illustrates the methodology for adjusting the proposed
prospective payments (as described in section V. of this proposed
rule). The following examples are based on two hypothetical Medicare
beneficiaries, both classified into CMG 0104 (without comorbidities).
The unadjusted prospective payment rate for CMG 0104 (without
comorbidities) appears in Table 11.
Example: 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 Disproportionate Share Hospital (DSH)
percentage of 5 percent (which would result in a LIP adjustment of
1.0156), a wage index of 0.8693, and a rural adjustment of 14.9
percent. Facility B, an urban teaching hospital, has a DSH percentage
of 15 percent (which would result in a LIP adjustment of 1.0454
percent), a wage index of 0.9106, and a teaching status adjustment of
0.0784.
[[Page 22272]]
To calculate each IRF's labor and non-labor portion of the proposed
prospective payment, we begin by taking the proposed FY 2025 unadjusted
prospective payment rate for CMG 0104 (without comorbidities) from
Table 11. Then, we multiply the proposed labor-related share for FY
2025 (74.2 percent) described in section VI. of this proposed rule by
the unadjusted prospective payment rate. To determine the non-labor
portion of the proposed prospective payment rate, we subtract the labor
portion of the Federal payment from the proposed unadjusted prospective
payment.
To compute the wage-adjusted prospective payment, we multiply the
labor portion of the proposed Federal payment by the appropriate wage
index located in the applicable wage index table. This table is
available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/IRF-Rules-and-Related-Files.html.
The resulting figure is the wage-adjusted labor amount. Next, we
compute the wage-adjusted Federal payment by adding the wage-adjusted
labor amount to the non-labor portion of the proposed Federal payment.
Adjusting the proposed wage-adjusted Federal payment by the
facility-level adjustments involves several steps. First, we take the
wage-adjusted 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
(0.0784, 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
prospective payment rates. Table 12 illustrates the components of the
adjusted payment calculation.
[GRAPHIC] [TIFF OMITTED] TP29MR24.036
Thus, the proposed adjusted payment for Facility A would be
$30,728.61, and the proposed adjusted payment for Facility B would be
$30,597.28.
VI. Proposed Update to Payments for High-Cost Outliers Under the IRF
PPS for FY 2025
A. Update to the Outlier Threshold Amount for FY 2025
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 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 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 FY 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 through 2024 IRF PPS final rules and the FY 2011 and FY 2013
notices (70 FR 47880, 71 FR 48354, 72 FR 44284, 73 FR 46370, 74 FR
39762, 75 FR 42836, 76 FR 47836, 76 FR 59256, 77 FR 44618, 78 FR 47860,
79 FR 45872, 80 FR 47036, 81 FR 52056, 82 FR 36238, 83 FR 38514, 84 FR
39054, 85 FR 48444, 86 FR 42362, 87 FR 47038, and 88 FR 50956
respectively) to maintain estimated outlier payments at 3 percent of
total estimated payments. We also stated in the FY 2009 final rule (73
FR 46370 at 46385) that we would continue to
[[Page 22273]]
analyze the estimated outlier payments for subsequent years and adjust
the outlier threshold amount as appropriate to maintain the 3 percent
target.
To update the IRF outlier threshold amount for FY 2025, we propose
to use FY 2023 claims data and the same methodology that we used to set
the initial outlier threshold amount in the FY 2002 IRF PPS final rule
(66 FR 41362 through 41363), which is also the same methodology that we
used to update the outlier threshold amounts for FYs 2006 through 2024.
The outlier threshold is calculated by simulating aggregate payments
and using an iterative process to determine a threshold that results in
outlier payments being equal to 3 percent of total payments under the
simulation. To determine the outlier threshold for FY 2025, we
estimated the amount of FY 2025 IRF PPS aggregate and outlier payments
using the most recent claims available (FY 2023) and the proposed FY
2025 standard payment conversion factor, labor-related share, and wage
indexes, incorporating any applicable budget-neutrality adjustment
factors. The outlier threshold is adjusted either up or down in this
simulation until the estimated outlier payments equal 3 percent of the
estimated aggregate payments. Based on an analysis of the preliminary
data used for the proposed rule, we estimated that IRF outlier payments
as a percentage of total estimated payments would be approximately 3.2
percent in FY 2024. Therefore, we propose to update the outlier
threshold amount from $10,423 for FY 2024 to $12,158 for FY 2025 to
maintain estimated outlier payments at approximately 3 percent of total
estimated aggregate IRF payments for FY 2025.
We note that, as we typically do, we will update our data between
the FY 2025 IRF PPS proposed and final rules to ensure that we use the
most recent available data in calculating IRF PPS payments.
We invite public comment on the proposed update to the IRF outlier
threshold for FY 2025.
B. Proposed Update to the IRF Cost-to-Charge Ratio Ceiling and Urban/
Rural Averages for FY 2025
CCRs are used to adjust charges from Medicare claims to costs and
are computed annually from facility-specific data obtained from MCRs.
IRF specific CCRs are used in the development of the CMG relative
weights and the calculation of outlier payments under the IRF PPS. In
accordance with the methodology stated in the FY 2004 IRF PPS final
rule (68 FR45692 through 45694), we propose to apply a ceiling to IRFs'
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 2025, based on analysis of the most recent
data available. We apply the national urban and rural CCRs in the
following situations:
New IRFs that have not yet submitted their first MCR.
IRFs whose overall CCR is in excess of the national CCR
ceiling for FY 2025, as discussed below in this section.
Other IRFs for which accurate data to calculate an overall
CCR are not available.
Specifically, for FY 2025, we propose to estimate a national
average CCR of 0.492 for rural IRFs, which we calculated by taking an
average of the CCRs for all rural IRFs using their most recently
submitted cost report data. Similarly, we propose to estimate a
national average CCR of 0.406 for urban IRFs, which we calculated 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 total costs factor more heavily into the averages than the
CCRs of IRFs with lower total costs. For this proposed rule, we have
used the most recent available cost report data (FY 2022). This
includes all IRFs whose cost reporting periods begin on or after
October 1, 2021, and before October 1, 2022. If, for any IRF, the FY
2022 cost report was missing or had an ``as submitted'' status, we used
data from a previous FY's (that is, FY 2004 through FY 2021) settled
cost report for that IRF. 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
suggest that these older data do not adequately reflect the current
cost of care. Using updated FY 2022 cost report data for this proposed
rule, we estimate a national average CCR of 0.492 for rural IRFs, and a
national average CCR of 0.406 for urban IRFs.
In accordance with past practice, we propose to set the national
CCR ceiling at 3 standard deviations above the mean CCR. Using this
method, we proposed a national CCR ceiling of 1.52 for FY 2025. This
means that, if an individual IRF's CCR were to exceed this ceiling of
1.52 for FY 2025, we will replace the IRF's CCR with the appropriate
proposed national average CCR (either rural or urban, depending on the
geographic location of the IRF). We calculated the proposed national
CCR ceiling by:
Step 1. Taking the national average CCR (weighted by each IRF's
total costs, as previously discussed) of all IRFs for which we have
sufficient cost report data (both rural and urban IRFs combined).
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.
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 also propose that if more recent data become available after the
publication of this proposed rule and before the publication of the
final rule, we would use such data to determine the FY 2025 national
average rural and urban CCRs and the national CCR ceiling in the final
rule. Using the FY 2022 cost report data for this proposed rule, we
estimate a national average CCR ceiling of 1.52, using the same
methodology.
We invite public comment on the proposed update to IRF CCR ceiling
and the urban/rural averages for FY 2025.
VII. Inpatient Rehabilitation Facility (IRF) Quality Reporting Program
(QRP)
A. Background and Statutory Authority
The Inpatient Rehabilitation Facility Quality Reporting Program
(IRF QRP) is authorized by section 1886(j)(7) of the Act, and it
applies to freestanding IRFs, as well as inpatient rehabilitation units
of hospitals or Critical Access Hospitals (CAHs) paid by Medicare under
the IRF PPS. Section 1886(j)(7)(A)(i) of the Act requires the Secretary
to reduce by 2 percentage points the annual increase factor for
discharges occurring during a FY for any IRF that does not submit data
in accordance with the IRF QRP requirements set forth in subparagraphs
(C) and (F) of section 1886(j)(7) of the Act. We have codified our
program requirements in our regulations at Sec. 412.634.
We are proposing to require IRFs to report four new items to the
IRF-Patient Assessment Instrument (PAI) and modify one item on the IRF-
PAI as described in section VII.C. of this proposed rule. We are also
proposing to remove an item from the IRF-PAI as described in section
VII.F.3. Finally, we are seeking information on future measure concepts
for the IRF QRP and on an IRF star rating system.
[[Page 22274]]
B. General Considerations Used for the Selection of Measures for the
IRF QRP
For a detailed discussion of the considerations we use for the
selection of IRF QRP quality, resource use, or other measures, we refer
readers to the FY 2016 IRF PPS final rule (80 FR 47083 through 47084).
1. Quality Measures Currently Adopted for the IRF QRP
The IRF QRP currently has 18 adopted measures, which are listed in
Table 13. For a discussion of the factors used to evaluate whether a
measure should be removed from the IRF QRP, we refer readers to Sec.
412.634(b)(2).
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BILLING CODE 4120-01-C
We are not proposing to adopt any new measures for the IRF QRP.
C. Proposal To Collect Four New Items as Standardized Patient
Assessment Data Elements and Modify One Item Collected as a
Standardized Patient Assessment Data Element Beginning With the FY 2028
IRF QRP
In this proposed rule, we are proposing to require IRFs to report
the following four new items \7\ to be collected as standardized
patient assessment data elements in the IRF-PAI under the social
determinants of health (SDOH) category under the IRF QRP: one item for
Living Situation; two items for Food; and one item for Utilities. We
are also proposing to modify one of the current items collected as
standardized patient assessment data under the SDOH category (the
Transportation item), as described in section VII.C.5. of this proposed
rule.
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\7\ Items may also be referred to as ``data elements.''
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1. Definition of Standardized Patient Assessment Data
Section 1886(j)(7)(F)(ii) of the Act requires IRFs to submit
standardized patient assessment data required under section 1899B(b)(1)
of the Act. Section 1899B(b)(1)(A) of the Act requires post-acute care
(PAC) providers to submit standardized patient assessment data under
applicable reporting provisions (which, for IRFs, is the IRF QRP) with
respect to the admission and discharge of an individual (and more
frequently as the Secretary deems appropriate) using a standardized
patient assessment instrument. Section 1899B(a)(1)(C) of the Act
requires, in part, the Secretary to modify the PAC assessment
instruments in order for PAC providers, including IRFs, to submit
standardized patient assessment data under the Medicare program. IRFs
are currently required to report standardized patient assessment data
through the patient assessment instrument, referred to as the Inpatient
Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI).
Section 1899B(b)(1)(B) of the Act describes standardized patient
assessment data as data required for at least the quality measures
described in section 1899B(c)(1) of the Act and that is with respect to
the following categories: (1) functional status, such as mobility and
self-care at admission to a PAC provider and before discharge from a
PAC provider; (2) cognitive function, such as ability to express ideas
and to understand, and mental status, such as depression and dementia;
(3) special services, treatments, and interventions, such as need for
ventilator use, dialysis, chemotherapy, central line placement, and
total parenteral nutrition; (4) medical conditions and comorbidities,
such as diabetes, congestive heart failure, and pressure ulcers; (5)
impairments, such as incontinence and an impaired ability to hear, see,
or swallow, and (6) other categories deemed necessary and appropriate
by the Secretary.
2. Social Determinants of Health Collected as Standardized Patient
Assessment Data Elements
Section 1899B(b)(1)(B)(vi) of the Act authorizes the Secretary to
collect standardized patient assessment data elements with respect to
other categories deemed necessary and appropriate. Accordingly, we
finalized the creation of the SDOH category of standardized patient
assessment data elements in the FY 2020 IRF PPS final rule (84 FR 39149
through 39161), and defined SDOH as the socioeconomic, cultural, and
environmental circumstances in which individuals live that impact their
health.\8\ According to the World Health Organization, research shows
that the SDOH can be more important than health care or lifestyle
choices in influencing health, accounting for between 30-55% of health
outcomes.\9\ This is a part of a growing body of research that
highlights the importance of SDOH on health outcomes. Subsequent to the
FY 2020 IRF PPS final rule, we expanded our definition of SDOH: SDOH
are the conditions in the environments where people are born, live,
learn, work, play, worship, and age that affect a wide range of health,
functioning, and quality-of-life outcomes and risks.10 11 12
This update will align our definition of SDOH with the definition used
by HHS agencies, including OASH, the Centers for Disease Control and
Prevention (CDC), and the White House Office of Science and Technology
Policy.13 14 We currently collect seven items in this SDOH
category of standardized patient assessment data elements: ethnicity,
race, preferred language, interpreter services, health literacy,
transportation, and social isolation (84 FR 39149 through 39161).\15\
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\8\ Office of the Assistant Secretary for Planning and
Evaluation (ASPE). Second Report to Congress on Social Risk and
Medicare's Value-Based Purchasing Programs. June 28, 2020. Available
at: https://aspe.hhs.gov/reports/second-report-congress-social-risk-medicares-value-based-purchasing-programs.
\9\ World Health Organization. Social determinants of health.
Available at: https://www.who.int/health-topics/social-determinants-of-health#tab=tab_1.
\10\ Using Z Codes: The Social Determinants of Health (SDOH).
Data Journey to Better Outcomes. https://www.cms.gov/files/document/zcodes-infographic.pdf.
\11\ Improving the Collection of Social Determinants of Health
(SDOH) Data with ICD-10-CM Z Codes. https://www.cms.gov/files/document/cms-2023-omh-z-code-resource.pdf.
\12\ CMS.gov. Measures Management System (MMS). CMS Focus on
Health Equity. Health Equity Terminology and Quality Measures.
https://mmshub.cms.gov/about-quality/quality-at-CMS/goals/cms-focus-on-health-equity/health-equity-terminology.
\13\ Centers for Disease Control and Prevention. Social
Determinants of Health (SDOH) and PLACES Data. https://www.cdc.gov/places/social-determinants-of-health-and-places-data/.
\14\ ``U.S. Playbook To Address Social Determinants Of Health''
from the White House Office Of Science And Technology Policy
(November 2023).
\15\ These SDOH data are also collected for purposes outlined in
section 2(d)(2)(B) of the Improving Medicare Post-Acute Care
Transitions Act (IMPACT Act). For a detailed discussion on SDOH data
collection under section 2(d)(2)(B) of the IMPACT Act, see the FY
2020 IRF PPS final rule (84 FR 39149 through 39161).
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In accordance with our authority under section 1899B(b)(1)(B)(vi)
of the Act, we similarly finalized the creation of the SDOH category of
standardized patient assessment data elements for Skilled Nursing
Facilities (SNFs) in the FY 2020 SNF PPS final rule (84 FR 38805
through 38817), for Long-Term Care Hospitals (LTCHs) in the FY 2020
Inpatient Prospective Payment System (IPPS)/LTCH PPS final rule (84 FR
42577 through 42588), and for Home Health Agencies (HHAs) in the
Calendar Year (CY) 2020 HH PPS final rule (84 FR 60597 through 60608).
We also collect the same seven SDOH items in these PAC providers'
respective patient/resident assessment instruments (84 FR 38817, 84 FR
42590, and 84 FR 60610, respectively).
Access to standardized data relating to SDOH on a national level
permits us to conduct periodic analyses, and to assess their
appropriateness as risk adjustors or in future quality measures. Our
ability to perform these analyses and to make adjustments relies on
existing data collection of SDOH items from PAC settings. We adopted
these SDOH items using common standards and definitions across the four
PAC providers to promote interoperable exchange of longitudinal
information among these PAC providers, including IRFs, and other
providers. We believe this information may facilitate coordinated care,
continuity in care planning, and the discharge planning process from
PAC settings.
We noted in our FY 2020 IRF PPS final rule that each of the items
was identified in the 2016 National Academies of Sciences, Engineering,
[[Page 22276]]
and Medicine (NASEM) report as impacting care use, cost, and outcomes
for Medicare beneficiaries (84 FR 39150 through 39151). At that time,
we acknowledged that other items may also be useful to understand. The
SDOH items we are proposing to adopt as standardized patient assessment
data elements under the SDOH category in this proposed rule were also
identified in the 2016 NASEM report \16\ or the 2020 NASEM report \17\
as impacting care use, cost, and outcomes for Medicare beneficiaries.
The items have the capacity to take into account treatment preferences
and care goals of patients and their caregivers, to inform our
understanding of patient complexity and SDOH that may affect care
outcomes and ensure that IRFs are in a position to impact through the
provision of services and supports, such as connecting patients and
their caregivers with identified needs with social support programs.
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\16\ Social Determinants of Health. Healthy People 2020. https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-of-health. (February 2019).
\17\ National Academies of Sciences, Engineering, and Medicine.
2020. Leading Health Indicators 2030: Advancing Health, Equity, and
Well-Being. Washington, DC: The National Academies Press. https://doi.org/10.17226/25682.
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Health-related social needs (HRSNs) are the resulting effects of
SDOH, which are individual-level, adverse social conditions that
negatively impact a person's health or health care.\18\ Examples of
HRSNs include lack of access to food, housing, or transportation, and
have been associated with poorer health outcomes, greater use of
emergency departments and hospitals, and higher health care costs.\19\
Certain HRSNs can lead to unmet social needs that directly influence an
individual's physical, psychosocial, and functional status. This is
particularly true for food security, housing stability, utilities
security, and access to transportation.\20\
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\18\ Centers for Medicare & Medicaid Services. ``A Guide to
Using the Accountable Health Communities Health-Related Social Needs
Screening Tool: Promising Practices and Key Insights.'' August 2022.
Available at: https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion.
\19\ Berkowitz, S.A., T.P. Baggett, and S.T. Edwards,
``Addressing Health-Related Social Needs: Value-Based Care or
Values-Based Care?'' Journal of General Internal Medicine, vol. 34,
no. 9, 2019, pp. 1916-1918, https://doi.org/10.1007/s11606-019-05087-3.
\20\ Hugh Alderwick and Laura M. Gottlieb, ``Meanings and
Misunderstandings: A Social Determinants of Health Lexicon for
Health Care Systems: Milbank Quarterly,'' Milbank Memorial Fund,
November 18, 2019, https://www.milbank.org/quarterly/articles/meanings-and-misunderstandings-a-social-determinants-of-health-lexicon-for-health-care-systems/.
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We are proposing to require IRFs collect and submit four new items
in the IRF-PAI as standardized patient assessment data elements under
the SDOH category because these items would collect information not
already captured by the current SDOH items. Specifically, we believe
the ongoing identification of SDOH would have three significant
benefits. First, promoting screening for SDOH could serve as evidence-
based building blocks for supporting healthcare providers in
actualizing their commitment to address disparities that
disproportionately impact underserved communities. Second, screening
for SDOH improves health equity through identifying potential social
needs so the IRF may address those with the patient, their caregivers,
and community partners during the discharge planning process, if
indicated.\21\ Third, these SDOH items could support our ongoing IRF
QRP initiatives by providing data with which to stratify IRFs'
performance on measures and or in future quality measures.
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\21\ American Hospital Association. (2020). Health Equity,
Diversity & Inclusion Measures for Hospitals and Health System
Dashboards. December 2020. Accessed: January 18, 2022. Available at:
https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
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Additional collection of SDOH items would permit us to continue
developing the statistical tools necessary to maximize the value of
Medicare data and improve the quality of care for all beneficiaries.
For example, we recently developed and released the Health Equity
Confidential Feedback Reports, which provided data to IRFs on whether
differences in quality measure outcomes are present for their patients
by dual-enrollment status and race and ethnicity.\22\ We note that
advancing health equity by addressing the health disparities that
underlie the country's health system is one of our strategic pillars
\23\ and a Biden-Harris Administration priority.\24\
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\22\ In October 2023, we released two new annual Health Equity
Confidential Feedback Reports to IRFs: The Discharge to Community
(DTC) Health Equity Confidential Feedback Report and the Medicare
Spending Per Beneficiary (MSPB) Health Equity Confidential Feedback
Report. The PAC Health Equity Confidential Feedback Reports
stratified the DTC and MSPB measures by dual-enrollment status and
race/ethnicity. For more information on the Health Equity
Confidential Feedback Reports, please refer to the Education and
Outreach materials available on the IRF QRP Training web page at
https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/irf-quality-reporting/irf-quality-reporting-training.
\23\ Brooks-LaSure, C. (2021). My First 100 Days and Where We Go
from Here: A Strategic Vision for CMS. Centers for Medicare &
Medicaid. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
\24\ The Biden-Harris Administration's strategic approach to
addressing health related social needs can be found in The U.S.
Playbook to Address Social Determinants of Health (SDOH) (2023):
https://www.whitehouse.gov/wp-content/uploads/2023/11/SDOH-Playbook-3.pdf.
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3. Proposal To Collect Four New Items as Standardized Patient
Assessment Data Elements Beginning With the FY 2028 IRF QRP
We are proposing to require IRFs to collect and submit four new
items as standardized patient assessment data elements under the SDOH
category using the IRF-PAI: one item for Living Situation, as described
in section VII.3.(a) of this proposed rule; two items for Food, as
described in section VII.3.(b) of this proposed rule; and one item for
Utilities, as described in VII.3.(c) of this proposed rule.
We selected the proposed SDOH items from the Accountable Health
Communities (AHC) HRSN Screening Tool developed for the AHC Model. The
AHC HRSN Screening Tool is a universal, comprehensive screening for
HRSNs that addresses five core domains as follows: (1) housing
instability (for example, homelessness, poor housing quality), (2) food
insecurity, (3) transportation difficulties, (4) utility assistance
needs, and (5) interpersonal safety concerns (for example, intimate-
partner violence, elder abuse, child maltreatment).\25\
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\25\ More information about the AHC HRSN Screening Tool is
available on the website at https://innovation.cms.gov/Files/worksheets/ahcm-screeningtool.pdf.
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We believe that requiring IRFs to report new items that are
currently included in the AHC HRSN Screening Tool would further
standardize the screening of SDOH across quality programs. For example,
our proposal would align, in part, with the requirements of the
Hospital Inpatient Quality Reporting (IQR) Program and the Inpatient
Psychiatric Facility Quality Reporting (IPFQR) Program. As of January
2024, hospitals are required to report whether they have screened
patients for the standardized SDOH categories of housing instability,
food insecurity, utility difficulties, transportation needs, and
interpersonal safety to meet the Hospital IQR Program requirements.\26\
Additionally, beginning January 2025, IPFs will also be required
[[Page 22277]]
to report whether they have screened patients for the same set of SDOH
categories.\27\ As we continue to standardize data collection across
PAC settings, we believe using common standards and definitions for new
items is important to promote interoperable exchange of longitudinal
information between IRFs and other providers to facilitate coordinated
care, continuity in care planning, and the discharge planning process.
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\26\ Centers for Medicare & Medicaid Services, FY2023 IPPS/LTCH
PPS final rule (87 FR 49191 through 49194).
\27\ Centers for Medicare & Medicaid Services, FY2024 Inpatient
Psychiatric Prospective Payment System--Rate Update (88 FR 51107
through 51121).
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Below we describe each of the four proposed items in more detail.
(a) Living Situation
Healthy People 2030 prioritizes economic stability as a key SDOH,
of which housing stability is a component.28 29 Lack of
housing stability encompasses several challenges, such as having
trouble paying rent, overcrowding, moving frequently, or spending the
bulk of household income on housing.\30\ These experiences may
negatively affect one's physical health and access to health care.
Housing instability can also lead to homelessness, which is housing
deprivation in its most severe form.\31\ On a single night in 2023,
roughly 653,100 people, or 20 out of every 10,000 people in the United
States, were experiencing homelessness.\32\ Studies also found that
people who are homeless have an increased risk of premature death and
experience chronic disease more often than among the general
population.\33\
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\28\ https://health.gov/healthypeople/priority-areas/social-determinants-health.
\29\ Healthy People 2030 is a long-term, evidence-based effort
led by the U.S. Department of Health and Human Services (HHS) that
aims to identify nationwide health improvement priorities and
improve the health of all Americans.
\30\ Kushel, M.B., Gupta, R., Gee, L., & Haas, J.S. (2006).
Housing instability and food insecurity as barriers to health care
among low-income Americans. Journal of General Internal Medicine,
21(1), 71-77. doi: https://doi.org/10.1111/j.1525-1497.2005.00278.x.
\31\ Homelessness is defined as ``lacking a regular nighttime
residence or having a primary nighttime residence that is a
temporary shelter or other place not designed for sleeping.''
Crowley, S. (2003). The affordable housing crisis: Residential
mobility of poor families and school mobility of poor children.
Journal of Negro Education, 72(1), 22-38. doi: https://doi.org/10.2307/3211288.
\32\ The 2023 Annual Homeless Assessment Report (AHAR) to
Congress. The U.S. Department of Housing and Urban Development 2023.
https://www.huduser.gov/portal/sites/default/files/pdf/2023-AHAR-Part-1.pdf.
\33\ Baggett, T.P., Hwang, S.W., O'Connell, J.J., Porneala,
B.C., Stringfellow, E.J., Orav, E.J., Singer, D.E., & Rigotti, N.A.
(2013). Mortality among homeless adults in Boston: Shifts in causes
of death over a 15-year period. JAMA Internal Medicine, 173(3), 189-
195. doi: https://doi.org/10.1001/jamainternmed.2013.1604. Schanzer,
B., Dominguez, B., Shrout, P.E., & Caton, C.L. (2007). Homelessness,
health status, and health care use. American Journal of Public
Health, 97(3), 464-469. doi: https://doi.org/10.2105/ajph.2005.076190.
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We believe that IRFs can use information obtained from the Living
Situation item during a patient's discharge planning. For example, IRFs
could work in partnership with community care hubs and community-based
organizations to establish new care transition workflows, including
referral pathways, contracting mechanisms, data sharing strategies, and
implementation training that can track HRSNs to ensure unmet needs,
such as housing, are successfully addressed through closed loop
referrals and follow-up.\34\ IRFs could also take action to help
alleviate a patient's other related costs of living, like food, by
referring the patient to community-based organizations that would allow
the patient's additional resources to be allocated towards housing
without sacrificing other needs.\35\ Finally, IRFs could use the
information obtained from the Living Situation item to better
coordinate with other healthcare providers, facilities, and agencies
during transitions of care, so that referrals to address a patient's
housing stability are not lost during vulnerable transition periods.
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\34\ U.S. Department of Health & Human Services (HHS), Call to
Action, ``Addressing Health Related Social Needs in Communities
Across the Nation.'' November 2023. https://aspe.hhs.gov/sites/default/files/documents/3e2f6140d0087435cc6832bf8cf32618/hhs-call-to-action-health-related-social-needs.pdf.
\35\ Henderson, K.A., Manian, N., Rog, D.J., Robison, E., Jorge,
E., AlAbdulmunem, M. ``Addressing Homelessness Among Older Adults''
(Final Report). Washington, DC: Office of the Assistant Secretary
for Planning and Evaluation, U.S. Department of Health and Human
Services. October 26, 2023.
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Due to the potential negative impacts housing instability can have
on a patient's health, we are proposing to adopt the Living Situation
item as a new standardized patient assessment data element under the
SDOH category. This proposed Living Situation item is based on the
Living Situation item currently collected in the AHC HRSN Screening
Tool,36 37 and was adapted from the Protocol for Responding
to and Assessing Patients' Assets, Risks, and Experiences (PRAPARE)
tool.\38\ The proposed Living Situation item asks, ``What is your
living situation today?'' The proposed response options are: (1) I have
a steady place to live; (2) I have a place to live today, but I am
worried about losing it in the future; (3) I do not have a steady place
to live; (7) Patient declines to respond; and (8) Patient unable to
respond. A draft of the proposed Living Situation item to be adopted as
a standardized patient assessment data element under the SDOH category
can be found in the Downloads section of the IRF-PAI and IRF-PAI Manual
web page at https://www.cms.gov/medicare/quality/inpatient-rehabilitation-facility/irf-pai-and-irf-qrp-manual.
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\36\ More information about the AHC HRSN Screening Tool is
available on the website at https://innovation.cms.gov/Files/worksheets/ahcm-screeningtool.pdf.
\37\ The AHC HRSN Screening Tool Living Situation item includes
two questions. In an effort to limit IRF burden, we are only
proposing the first question.
\38\ National Association of Community Health Centers and
Partners, National Association of Community Health Centers,
Association of Asian Pacific Community Health Organizations,
Association OPC, Institute for Alternative Futures. ``PRAPARE.''
2017. https://prapare.org/the-prapare-screening-tool/.
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(b) Food
The U.S. Department of Agriculture, Economic Research Service
defines a lack of food security as a household-level economic and
social condition of limited or uncertain access to adequate food.\39\
Adults who are food insecure may be at an increased risk for a variety
of negative health outcomes and health disparities. For example, a
study found that food-insecure adults may be at an increased risk for
obesity.\40\ Another study found that food-insecure adults have a
significantly higher probability of death from any cause or
cardiovascular disease in long-term follow-up care, in comparison to
adults that are food secure.\41\
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\39\ U.S. Department of Agriculture, Economic Research Service.
(n.d.). Definitions of food security. Retrieved March 10, 2022, from
https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/definitions-of-food-security/.
\40\ Hernandez, D.C., Reesor, L.M., & Murillo, R. (2017). Food
insecurity and adult overweight/obesity: Gender and race/ethnic
disparities. Appetite, 117, 373-378.
\41\ Banerjee, S., Radak, T., Khubchandani, J., & Dunn, P.
(2021). Food Insecurity and Mortality in American Adults: Results
From the NHANES-Linked Mortality Study. Health promotion practice,
22(2), 204-214. https://doi.org/10.1177/1524839920945927.
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While having enough food is one of many predictors for health
outcomes, a diet low in nutritious foods is also a factor.\42\ The
United States Department of Agriculture (USDA) defines nutrition
security as ``consistent and equitable access to healthy, safe,
affordable foods essential to optimal health and well-
[[Page 22278]]
being.'' \43\ Nutrition security builds on and complements long
standing efforts to advance food security. Studies have shown that
older adults struggling with food insecurity consume fewer calories and
nutrients and have lower overall dietary quality than those who are
food secure, which can put them at nutritional risk.\44\ Older adults
are also at a higher risk of developing malnutrition, which is
considered a state of deficit, excess, or imbalance in protein, energy,
or other nutrients that adversely impacts an individual's own body
form, function, and clinical outcomes.\45\ About 50 percent of older
adults are affected by malnutrition, which is further aggravated by a
lack of food security and poverty.\46\ These facts highlight why the
Biden-Harris Administration launched the White House Challenge to End
Hunger and Build Health Communities.\47\
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\42\ National Center for Health Statistics. (2022, September 6).
Exercise or Physical Activity. Retrieved from Centers for Disease
Control and Prevention: https://www.cdc.gov/nchs/fastats/exercise.htm.
\43\ Ziliak, J.P., & Gundersen, C. (2019). The State of Senior
Hunger in America 2017: An Annual Report. Prepared for Feeding
America. Available at https://www.feedingamerica.org/research/senior-hunger-research/senior.
\44\ Ziliak, J.P., & Gundersen, C. (2019). The State of Senior
Hunger in America 2017: An Annual Report. Prepared for Feeding
America. Available at: https://www.feedingamerica.org/research/senior-hunger-research/senior.
\45\ The Malnutrition Quality Collaborative. (2020). National
Blueprint: Achieving Quality Malnutrition Care for Older Adults,
2020 Update. Washington, DC: Avalere Health and Defeat Malnutrition
Today. Available at: https://defeatmalnutrition.today/advocacy/blueprint/.
\46\ Food Research & Action Center (FRAC). ``Hunger is a Health
Issue for Older Adults: Food Security, Health, and the Federal
Nutrition Programs.'' December 2019. https://frac.org/wp-content/uploads/hunger-is-a-health-issue-for-older-adults-1.pdf.
\47\ The White House Challenge to End Hunger and Build Health
Communities (Challenge) was a nationwide call-to-action released on
March 24, 2023, to stakeholders across all of society to make
commitments to advance President Biden's goal to end hunger and
reduce diet-related diseases by 2030--all while reducing
disparities. More information on the White House Challenge to End
Hunger and Build Health Communities can be found: https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/24/fact-sheet-biden-harris-administration-launches-the-white-house-challenge-to-end-hunger-and-build-healthy-communities-announces-new-public-private-sector-actions-to-continue-momentum-from-hist/.
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We believe that adopting items to collect and analyze information
about a patient's food security at home could provide additional
insight to their health complexity and help facilitate coordination
with other healthcare providers, facilities, and agencies during
transitions of care, so that referrals to address a patient's food
security are not lost during vulnerable transition periods. For
example, an IRF's dietitian or other clinically qualified nutrition
professional could work with the patient and their caregiver to plan
healthy, affordable food choices prior to discharge.\48\ IRFs could
also refer a patient that indicates lack of food security to government
initiatives such as the Supplemental Nutrition Assistance Program
(SNAP) and food pharmacies (programs to increase access to healthful
foods by making them affordable), two initiatives that have been
associated with lower health care costs and reduced hospitalization and
emergency department visits.\49\
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\48\ Schroeder K., Smaldone A., Food Insecurity: A Concept
Analysis. Nurse Forum. 2015 Oct-Dec; 50(4):274-84. doi: 10.1111/
nuf.12118. Epub 2015 Jan 21. PMID: 25612146; PMCID: PMC4510041.
\49\ Tsega M., Lewis C., McCarthy D., Shah T., Coutts K., Review
of Evidence for Health-Related Social Needs Interventions. July
2019. The Commonwealth Fund. https://www.commonwealthfund.org/sites/default/files/2019-07/COMBINED_ROI_EVIDENCE_REVIEW_7.15.19.pdf.
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We are proposing to adopt two Food items as new standardized
patient assessment data elements under the SDOH Category. These
proposed items are based on the Food items currently collected in the
AHC HRSN Screening Tool, and were adapted from the USDA 18-item
Household Food Security Survey (HFSS).\50\ The first proposed Food item
states, ``Within the past 12 months, you worried that your food would
run out before you got money to buy more.'' The second proposed Food
item states, ``Within the past 12 months, the food you bought just
didn't last and you didn't have money to get more.'' We propose the
same response options for both items: (1) Often true; (2) Sometimes
true; (3) Never True; (7) Patient declines to respond; and (8) Patient
unable to respond. A draft of the proposed Food items to be adopted as
standardized patient assessment data elements under the SDOH category
can be found in the Downloads section of the IRF-PAI and IRF-PAI Manual
web page at https://www.cms.gov/medicare/quality/inpatient-rehabilitation-facility/irf-pai-and-irf-qrp-manual.
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\50\ More information about the HFSS tool can be found at
https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/survey-tools/.
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(c) Utilities
A lack of energy (utility) security can be defined as an inability
to adequately meet basic household energy needs.\51\ According to the
United States Department of Energy, one in three households in the U.S.
are unable to adequately meet basic household energy needs.\52\ The
consequences associated with a lack of utility security are represented
by three primary dimensions: economic, physical, and behavioral.
Patients with low incomes are disproportionately affected by high
energy costs, and they may be forced to prioritize paying for housing
and food over utilities.\53\ Some patients may face limited housing
options and therefore are at increased risk of living in lower-quality
physical conditions with malfunctioning heating and cooling systems,
poor lighting, and outdated plumbing and electrical systems.\54\
Patients with a lack of utility security may use negative behavioral
approaches to cope, such as using stoves and space heaters for
heat.\55\ In addition, data from the Department of Energy's U.S. Energy
Information Administration confirm that a lack of energy security
disproportionately affects certain populations, such as low-income and
African American households.\56\ The effects of a lack of utility
security include vulnerability to environmental exposures such as
dampness, mold, and thermal discomfort in the home, which have a direct
impact on a person's health.\57\ For example, research has shown
associations between a lack of energy security and respiratory
conditions as well as mental health-related disparities and poor sleep
quality in vulnerable populations such as the elderly, children, the
socioeconomically disadvantaged, and the medically vulnerable.\58\
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\51\ Hern[aacute]ndez D., Understanding `energy insecurity' and
why it matters to health. Soc Sci Med. 2016 Oct; 167:1-10. Doi:
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003;
PMCID: PMC5114037.
\52\ U.S. Energy Information Administration. ``One in Three U.S.
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
\53\ Hern[aacute]ndez D., ``Understanding `energy insecurity'
and why it matters to health.'' Soc Sci Med. 2016; 167:1-10.
\54\ Hern[aacute]ndez D., Understanding 'energy insecurity' and
why it matters to health. Soc Sci Med. 2016 Oct; 167:1-10. doi:
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003;
PMCID: PMC5114037.
\55\ Hern[aacute]ndez D., ``What `Merle' Taught Me About Energy
Insecurity and Health.'' Health Affairs, VOL.37, NO.3: Advancing
Health Equity Narrative Matters. March 2018. https://doi.org/10.1377/hlthaff.2017.1413.
\56\ U.S. Energy Information Administration. ``One in Three U.S.
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
\57\ Hern[aacute]ndez D., Understanding 'energy insecurity' and
why it matters to health. Soc Sci Med. 2016 Oct; 167:1-10. doi:
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003;
PMCID: PMC5114037.
\58\ Hern[aacute]ndez D., Siegel E., Energy insecurity and its
ill health effects: A community perspective on the energy-health
nexus in New York City. Energy Res Soc Sci. 2019 Jan; 47:78-83. doi:
10.1016/j.erss.2018.08.011. Epub 2018 Sep 8. PMID: 32280598; PMCID:
PMC7147484.
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We believe adopting an item to collect information upon a patient's
admission to an IRF about their utility security
[[Page 22279]]
would facilitate the identification of patients who may not have
utility security and who may benefit from engagement efforts. For
example, IRFs may be able to use the information on utility security to
help connect some patients in need to programs that can help older
adults pay for their home energy (heating/cooling) costs, like the Low-
Income Home Energy Assistance Program (LIHEAP).\59\ IRFs may also be
able to partner with community care hubs and community-based
organizations to assist the patient in applying for these and other
local utility assistance programs, as well as helping them navigate the
enrollment process.\60\
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\59\ https://www.fcc.gov/broadbandbenefit.
\60\ National Council on Aging (NCOA). ``How to Make It Easier
for Older Adults to Get Energy and Utility Assistance.'' Promising
Practices Clearinghouse for Professionals. Jan 13, 2022. https://www.ncoa.org/article/how-to-make-it-easier-for-older-adults-to-get-energy-and-utility-assistance.
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We are proposing to adopt a new item, Utilities, as a new
standardized patient assessment data element under the SDOH category.
This proposed item is based on the Utilities item currently collected
in the AHC HRSN Screening Tool and was adapted from the Children's
Sentinel Nutrition Assessment Program (C-SNAP) survey.\61\ The proposed
Utilities item asks, ``In the past 12 months, has the electric, gas,
oil, or water company threatened to shut off services in your home?''
The proposed response options are: (1) Yes; (2) No; (3) Already shut
off; (7) Patient declines to respond; and (8) Patient unable to
respond. A draft of the proposed Utilities item to be adopted as a
standardized patient assessment data element under the SDOH category
can be found in the Downloads section of the IRF-PAI and IRF-PAI Manual
web page at https://www.cms.gov/medicare/quality/inpatient-rehabilitation-facility/irf-pai-and-irf-qrp-manual.
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\61\ This validated survey was developed as a clinical indicator
of household energy security among pediatric caregivers. Cook, J.T.,
D.A. Frank., P.H. Casey, R. Rose-Jacobs, M.M. Black, M. Chilton, S.
Ettinger de Cuba, et al. ``A Brief Indicator of Household Energy
Security: Associations with Food Security, Child Health, and Child
Development in US Infants and Toddlers.'' Pediatrics, vol. 122, no.
4, 2008, pp. e874-e875. https://doi.org/10.1542/peds.2008-0286.
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4. Stakeholder Input
We developed our proposal to add these items after considering
feedback we received in response to our Health Equity Update in the FY
2024 IRF PPS final rule. While there were commenters who urged CMS to
balance reporting requirements so as not to create undue administrative
burden and avoid making generalizations about differences in health and
health care on certain data elements, it was also suggested CMS
incentivize collection of data on SDOH such as housing stability and
food security. Two commenters emphasized that any additional
stratification of quality measures, including social risk factors and
SDOH, would be of value to PAC providers, including IRFs. The FY 2024
IRF PPS final rule (88 FR 51037 through 51039) includes a summary of
the public comments that we received in response to the Health Equity
Update and our responses to those comments.
Additionally, we considered feedback we received when we proposed
the creation of the SDOH category of standardized patient assessment
data elements in the FY 2020 IRF PPS proposed rule (84 FR 17319 through
17326). Commenters were generally in favor of the concept of collecting
SDOH items and stated that if implemented appropriately the data could
be useful in identifying and addressing health care disparities, as
well as refining the risk adjustment of outcome measures. One commenter
specifically recommended CMS consider including data collection of
housing status, since unmet housing needs can put patients at higher
risk for readmission. The FY 2020 IRF PPS final rule (84 FR 39149
through 39161) includes a summary of the public comments that we
received and our responses to those comments. We incorporated this
input into the development of this proposal.
We invite comment on the proposal to adopt four new items as
standardized patient assessment data elements in the IRF-PAI under the
SDOH category beginning with the FY 2028 IRF QRP: one Living Situation
item; two Food items; and one Utilities item.
5. Proposal To Modify the Transportation Item Beginning With the FY
2028 IRF QRP
Beginning October 1, 2022, IRFs began collecting seven items
adopted as standardized patient assessment data elements under the SDOH
category on the IRF-PAI.\62\ One of these items, A1250. Transportation,
collects data on whether a lack of transportation has kept a patient
from getting to and from medical appointments, meetings, work, or from
getting things they need for daily living. This item was adopted as a
standardized patient assessment data element under the SDOH category in
the FY 2020 IRF PPS final rule (84 FR 39160 through 39161). As we
discussed in the FY 2020 IRF PPS final rule (84 FR 39158), we continue
to believe that access to transportation for ongoing health care and
medication access needs, particularly for those with chronic diseases,
is essential to successful chronic disease management and the
collection of a Transportation item would facilitate the connection to
programs that can address identified needs.
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\62\ The seven SDOH items are ethnicity, race, preferred
language, interpreter services, health literacy, transportation, and
social isolation (84 FR 39149 through 339161).
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As part of our routine item and measure monitoring work, we
continually assess the implementation of the new SDOH items. We have
identified an opportunity to improve the data collection for A1250.
Transportation in the IRF-PAI by aligning it with the Transportation
category collected in our other programs.63 64 Specifically,
we are proposing to modify the current Transportation item in the IRF-
PAI so that it aligns with a Transportation item collected on the AHC
HRSN Screening Tool available to the IPFQR and Hospital IQR Programs.
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\63\ Centers for Medicare & Medicaid Services, FY2024 Inpatient
Psychiatric Prospective Payment System--Rate Update (88 FR 51107
through 51121).
\64\ Centers for Medicate & Medicaid Services, FY2023 IPPS/LTCH
PPS Final rule (87 FR 49202 through 49215).
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A1250. Transportation currently collected in the IRF-PAI asks:
``Has lack of transportation kept you from medical appointments,
meetings, work, or from getting things needed for daily living?'' The
response options are: (A) Yes, it has kept me from medical appointments
or from getting my medications; (B) Yes, it has kept me from non-
medical meetings, appointments, work, or from getting things that I
need; (C) No; (X) Patient unable to respond; and (Y) Patient declines
to respond. The Transportation item collected in the AHC HRSN Screening
Tool asks, ``In the past 12 months, has lack of reliable transportation
kept you from medical appointments, meetings, work or from getting
things needed for daily living?'' The two response options are: (1)
Yes; and (2) No. Consistent with the AHC HRSN Screening Tool, we are
proposing to modify the A1250. Transportation item currently collected
in the IRF-PAI in two ways: (1) revise the look-back period for when
the patient experienced lack of reliable transportation; and (2)
simplify the response options.
First, the proposed modification of the Transportation item would
use a defined 12-month look back period, while the current
Transportation item uses a look back period of six to 12 months. We
believe the distinction of a 12-month look back period would reduce
ambiguity for both patients and
[[Page 22280]]
clinicians, and therefore improve the validity of the data collected.
Second, we are proposing to simplify the response options. Currently,
IRFs separately collect information on whether a lack of transportation
has kept the patient from medical appointments or from getting
medications, and whether a lack of transportation has kept the patient
from non-medical meetings, appointments, work, or from getting things
they need. Although transportation barriers can directly affect a
person's ability to attend medical appointments and obtain medications,
a lack of transportation can also affect a person's health in other
ways, including accessing goods and services, obtaining adequate food
and clothing, and social activities.\65\ The proposed modified
Transportation item would collect information on whether a lack of
reliable transportation has kept the patient from medical appointments,
meetings, work, or from getting things needed for daily living, rather
than collecting the information separately. As discussed previously, we
believe reliable transportation services are fundamental to a person's
overall health, and as a result, the burden of collecting this
information separately outweighs its potential benefit.
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\65\ Centers for Medicare & Medicaid Services, FY2024 Inpatient
Psychiatric Prospective Payment System--Rate Update (88 FR 51107
through 51121).
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For the reasons stated previously, we are proposing to modify
A1250. Transportation based on the Transportation item adopted for use
in the AHC HRSN Screening Tool and adapted from the PRAPARE tool. The
proposed Transportation item asks, ``In the past 12 months, has a lack
of reliable transportation kept you from medical appointments,
meetings, work or from getting things needed for daily living?'' The
proposed response options are: (0) Yes; (1) No; (7) Patient declines to
respond; and (8) Patient unable to respond. A draft of the proposed
modified Transportation item can be found in the Downloads section of
the IRF-PAI and IRF-PAI Manual web page at https://www.cms.gov/medicare/quality/inpatient-rehabilitation-facility/irf-pai-and-irf-qrp-manual.
We invite comment on the proposal to modify the current
Transportation item previously adopted as a standardized patient
assessment data element under the SDOH category beginning with the FY
2028 IRF QRP.
D. IRF QRP Quality Measure Concepts Under Consideration for Future
Years--Request for Information (RFI)
We are seeking input on the importance, relevance, appropriateness,
and applicability of each of the concepts under consideration listed in
Table 13 for future years in the IRF QRP. In the FY 2024 IRF PPS
proposed rule (88 FR 21000 through 21003), we published a request for
information (RFI) on a set of principles for selecting and prioritizing
IRF QRP measures, identifying measurement gaps, and suitable measures
for filling these gaps. Within this proposed rule, we also sought input
on data available to develop measures, approaches for data collection,
perceived challenges or barriers, and approaches for addressing
identified challenges. We refer readers to the FY 2024 IRF PPS final
rule (88 FR 51036 through 51037) for a summary of the public comments
we received in response to the RFI.
Subsequently, our measure development contractor convened a
Technical Expert Panel (TEP) on December 15, 2023 to obtain expert
input on the future measure concepts that could fill the measurement
gaps identified in our FY 2024 RFI.\66\ The TEP discussed the alignment
of PAC and Hospice measures with CMS' ``Universal Foundation'' of
quality measures.\67\ The Universal Foundation aims to focus provider
attention, reduce burden, identify disparities in care, prioritize
development of interoperable, digital quality measures, allow for
comparisons across programs, and help identify measurement gaps.
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\66\ The Post-Acute Care (PAC) and Hospice Quality Reporting
Program Cross-Setting TEP summary report will be published in early
summer or as soon as technically feasible. IRFs can monitor the
Partnership for Quality Measurement website at https://mmshub.cms.gov/get-involved/technical-expert-panel/updates for
updates.
\67\ Centers for Medicare & Medicaid Services. Aligning Quality
Measures Across CMS--the Universal Foundation. November 17, 2023.
https://www.cms.gov/aligning-quality-measures-across-cms-universal-foundation.
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In consideration of the feedback, we have received from interested
parties through these activities, we are seeking input on three
concepts for the IRF QRP. One is a composite of vaccinations,\68\ which
could represent overall immunization status of patients such as the
Adult Immunization Status measure \69\ in the Universal Foundation. A
second concept on which we are seeking feedback is the concept of
depression for the IRF QRP, which may be similar to the Clinical
Screening for Depression and Follow-up measure \70\ in the Universal
Foundation. Finally, we are seeking feedback on the concept of pain
management.
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\68\ A composite measure can summarize multiple measures through
the use of one value or piece of information. More information can
be found at https://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/mms/downloads/composite-measures.pdf.
\69\ CMS Measures Inventory Tool. Adult immunization status
measure found at https://cmit.cms.gov/cmit/#/FamilyView?familyId=26.
\70\ CMS Measures Inventory Tool. Clinical Depression Screening
and Follow-Up measure found at https://cmit.cms.gov/cmit/#/FamilyView?familyId=672.
[GRAPHIC] [TIFF OMITTED] TP29MR24.038
[[Page 22281]]
While we will not be responding to specific comments in response to
this RFI in the FY 2025 IRF PPS final rule, we intend to use this input
to inform our future measure development efforts.
E. Future IRF Star Rating System: Request for Information (RFI)
Section 1886(j)(7)(E) of the Act requires that the Secretary
establish procedures for making data submitted under the IRF QRP
available to the public. Such procedures must ensure the IRFs
participating in the IRF QRP have the opportunity to review the IRF-
submitted data prior to such data being made public. The Secretary must
publicly report quality measures that relate to services furnished in
IRFs on the CMS website. We currently publicly report data we receive
on measures under the IRF QRP on our Care Compare website.\71\
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\71\ Centers for Medicare & Medicaid Services (CMS). Care
Compare. 2023. https://www.medicare.gov/care-compare.
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Care Compare displays star ratings for many provider types,
specifically: doctors and clinicians, hospitals, nursing homes, home
health, hospice, and dialysis facilities. Rating methodologies vary by
provider type. Star ratings summarize performance using symbols to help
consumers quickly and easily understand quality of care information.
Star ratings are designed to enhance and supplement existing publicly
reported quality information, and also serve to spotlight differences
in health care quality and identify areas for improvement.\72\ Some
providers receive ``overall star ratings,'' which are a composite score
calculated using different data sources, such as quality measures or
survey results. Others receive ``patient survey star ratings,'' a
composite score derived from patient experience of care surveys.
Depending on the provider type, some utilize one--or both--of these
rating methodologies.
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\72\ Centers for Medicare & Medicaid Services (CMS). Home Health
Star Ratings. 2023. https://www.cms.gov/medicare/quality/home-health/home-health-star-ratings.
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Star ratings serve an important function for patients, caregivers,
and families, helping them to more quickly comprehend complex
information about a health care providers' care quality and to easily
assess differences among providers. This transparency serves an
important educational function, while also helping to promote
competition in health care markets. Informed patients and consumers are
more empowered to select among health care providers, fostering
continued quality improvement. CMS' commitment to establishing star
ratings systems across health care settings is consistent with the
Biden-Harris Administration's goal to promote an open, transparent, and
competitive economy as outlined in Executive Order 14036, Promoting
Competition in the American Economy (86 FR 36987, July 14, 2021).\73\
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\73\ The White House. Executive Order on Promoting Competition
in the American Economy. 2023. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/.
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We are seeking feedback on the development of a five-star
methodology for IRFs that can meaningfully distinguish between quality
of care offered by IRFs. Star ratings for IRFs would be designed to
help consumers quickly identify differences in quality when selecting a
provider. We are committed to developing a well-tested, data-driven
methodology that encourages continuous quality improvement. We plan to
engage with the IRF community and provide multiple opportunities for
IRFs and other interested parties to give input on the development of a
star rating system for IRFs. We note that IRFs would have the ability
to preview their own facility's quality data before public posting of
the IRF's star rating on the Care Compare website in accordance with
section 1886(j)(7)(E) of the Act.
Specifically, we invite public comment on the following questions:
1. Are there specific criteria CMS should use to select measures
for an IRF star rating system?
2. How should CMS present IRF star ratings information in a way
that it is most useful to consumers?
While we will not be responding to specific comments in response to
this RFI in the FY 2025 IRF PPS final rule, we intend to use this input
to inform our future star rating development efforts. We intend to
consider how a rating system would determine an IRF's star rating, the
methods used for such calculations, and an anticipated timeline for
implementation. We will consider comments in response to this RFI for
future rulemaking.
F. Form, Manner, and Timing of Data Submission Under the IRF QRP
1. Background
We refer readers to the regulatory text at Sec. 412.634(b)(1) for
information regarding the current policies for reporting specified data
for the IRF QRP.
2. Proposed Reporting Schedule for the Submission of Proposed New Items
as Standardized Patient Assessment Data Elements and the Transportation
Item Beginning With the FY 2028 IRF QRP
As discussed in sections VII.C.3. and VII.C.5. of this proposed
rule, we are proposing to adopt four new items as standardized patient
assessment data elements under the SDOH category (one Living Situation
item, two Food items, and one Utilities item) and to modify the
Transportation standardized patient assessment data element previously
adopted under the SDOH category beginning with the FY 2028 IRF QRP.
We are proposing that IRFs would be required to report these new
items and the transportation item using the IRF-PAI beginning with
patients admitted on October 1, 2026, for purposes of the FY 2028 IRF
QRP. Starting in CY 2027, IRFs would be required to submit data for the
entire calendar year with the FY 2029 IRF QRP.
We are also proposing that IRFs that submit the Living Situation,
Food, and Utilities items proposed for adoption as standardized patient
assessment data elements under the SDOH category with respect to
admission only would be deemed to have submitted those items with
respect to both admission and discharge. We propose that IRFs would be
required to submit these items at admission only (and not at discharge)
because it is unlikely that the assessment of those items at admission
would differ from the assessment of the same item at discharge. This
would align the data collection for these proposed items with other
SDOH items (that is, Race, Ethnicity, Preferred Language, and
Interpreter Services) which are only collected at admission.\74\ A
draft of the proposed items is available in the Downloads section of
the IRF-PAI and IRF-PAI Manual web page at https://www.cms.gov/medicare/quality/inpatient-rehabilitation-facility/irf-pai-and-irf-qrp-manual.
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\74\ FY 2020 IRF PPS final rule (84 FR 39161 through 339162).
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As we noted in section VII.C.5. of this proposed rule, we
continually assess the implementation of the new SDOH items, including
A1250. Transportation, as part of our routine item and measure
monitoring work. We received feedback from stakeholders in response to
the FY 2020 IRF PPS proposed rule (84 FR 39149 through 39161) noting
their concern with the burden of collecting the Transportation item at
admission and discharge. Specifically, commenters stated that a
patient's access to transportation is unlikely to change between
admission and discharge (84
[[Page 22282]]
FR 39159). We analyzed the data IRFs reported from October 1, 2022,
through June 30, 2023 (Quarter 4 CY 2022 through Quarter 2 CY 2023),
and found that patient responses do not significantly change from
admission to discharge.\75\ Specifically, the proportion of patients
\76\ who responded ``Yes'' to the Transportation item at admission
versus at discharge differed by only 0.19 percentage points during this
period. We find these results convincing, and therefore are proposing
to require IRFs to collect and submit the proposed modified
standardized patient assessment data element, Transportation, at
admission only.
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\75\ Due to data availability of IRF SDOH standardized patient
assessment data elements, this is based on three quarters of
Transportation data.
\76\ The analysis is limited to patients who responded to the
Transportation item at both admission and discharge.
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We invite public comment on our proposal to collect data on the
following items proposed as standardized patient assessment data
elements under the SDOH category at admission beginning October 1, 2026
with the FY 2028 IRF QRP: (1) Living Situation as described in section
VII.C.3.(a) of this proposed rule; (2) Food as described in section
VII.C.3.(b) of this proposed rule; and (3) Utilities as described in
section VII.C.3.(c) of this proposed rule. We also invite comment on
our proposal to submit the proposed modified standardized patient
assessment data element, Transportation, at admission only beginning
October 1, 2026, with the FY 2028 IRF QRP as described in section
VII.C.5. of this proposed rule.
3. Proposal To Remove the Admission Class Item From the IRF-PAI
Beginning October 1, 2026
(a) Background
In the CY 2002 PPS for IRFs final rule (66 FR 41324 through 41342),
we finalized the use of the IRF-PAI, through which IRFs are now
required to collect and electronically submit patient data for all
Medicare Part A FFS and Medicare Part C (Medicare Advantage) patients
admitted and discharged from an IRF through September 30, 2024 \77\ and
for all patients regardless of payer beginning October 1, 2024.\78\
Item 14-Admission Class has been included on the IRF-PAI since the IRF-
PAI was first implemented and is completed only at admission. The most
recent version of the IRF-PAI is available for reference on the IRF-PAI
and IRF QRP Manual web page at https://www.cms.gov/medicare/quality/inpatient-rehabilitation-facility/irf-pai-and-irf-qrp-manual. Item 14,
Admission Class, includes the following response options: (i) Initial
Rehab; (iii) Readmission; (iv) Unplanned Discharge; and (v) Continuing
Rehabilitation.
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\77\ In the FY 2010 IRF PPS final rule (74 FR 39798 through
39800), CMS revised the regulation text in Sec. Sec. 412.604,
412.606, 412.610, 412.614, and 412.618 to require that all IRFs
submit IRF-PAI data on all of their Medicare Part C patients.
\78\ In the FY 2023 IRF PPS final rule (87 FR 47073 through
47092), CMS revised the regulation text in Sec. Sec. 412.604,
412.606, 412.610, 412.614, and 412.618 to require that all IRFs
submit IRF-PAI data on each patient receiving care in an IRF,
regardless of payer.
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(b) Removal of Item
We routinely review item sets for redundancies and identify
opportunities to simplify data submission requirements. We propose to
remove Item 14 entirely from the IRF-PAI, beginning October 1, 2026. We
have identified this item is currently not used in the calculation of
quality measures already adopted in the IRF QRP. It is also not used
for previously established purposes unrelated to the IRF QRP, such as
payment, survey, or care planning.
We invite public comment on our proposal to remove Item 14-
Admission Class from the IRF-PAI, effective October 1, 2026.
G. Policies Regarding Public Display of Measure Data for the IRF QRP
We are not proposing any new policies regarding the public display
of measure data at this time. For a more detailed discussion about our
policies regarding public display of IRF QRP measure data and
procedures for the opportunity to review and correct data and
information, we refer readers to the FY 2017 IRF PPS final rule (81 FR
52125 through 52131).
VIII. 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.
This proposed rule refers to associated information collections
that are not discussed in the regulation text contained in this
document.
A. Requirements for Updates Related to the IRF QRP Beginning With the
FY 2028 IRF QRP
An IRF that does not meet the requirements of the IRF QRP for a
fiscal year will receive a 2-percentage point reduction to its
otherwise applicable annual increase factor for that fiscal year.
In section VII.C. of the proposed rule, we are proposing to adopt
four items as standardized patient assessment data elements and modify
one item collected as a standardized patient assessment data element
beginning with the FY 2028 IRF QRP. In section VII.F.3. of the proposed
rule, we are proposing to remove one item, Admission Class, from the
IRF-PAI.
As stated in sections VII.C.3. and VII.C.5. of the preamble of this
proposed rule, we are proposing to adopt four items as standardized
patient assessment data elements and modify one item collected as a
standardized patient assessment data element beginning with the FY 2028
IRF QRP. The proposed and modified items would be collected using the
IRF-PAI. The IRF-PAI, in its current form, has been approved under OMB
control number 0938-0842.\79\ Four items would need to be added to the
IRF-PAI at admission to allow for collection of these data, and one
item would be modified. Additionally, as stated in section VII.F.2. of
this proposed rule, we are proposing that IRFs would submit the four
new items and one modified item at admission only. The net result of
collecting four new items at admission, modifying one item currently
collected at admission, and removing the collection of one item at
discharge is an increase of 0.9 minutes or 0.015 hour of clinical staff
time at admission [(4 items x 0.005 hour) minus (1 item x 0.005 hour)].
We identified the staff type based on past IRF burden calculations, and
our assumptions are based on the categories generally necessary to
perform an assessment. We believe that the items would be completed
equally by a Registered Nurse (RN) (50 percent of the time) and a
Licensed Practical and Licensed Vocational Nurse (LPN/LVN) (50 percent
of the time). However, IRFs determine the staffing resources necessary.
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\79\ https://www.reginfo.gov/public/do/DownloadNOA?requestID=494186.
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[[Page 22283]]
For the purposes of calculating the costs associated with the
collection of information requirements, we obtained median hourly wages
for these staff from the U.S. Bureau of Labor Statistics' (BLS) May
2022 National Occupational Employment and Wage Estimates.\80\ To
account for other indirect costs and fringe benefits, we doubled the
hourly wage. These amounts are detailed in Table 15. We established a
composite cost estimate using our adjusted wage estimates. The
composite estimate of $65.31/hr was calculated by weighting each
adjusted hourly wage equally (that is, 50%) [($78.10/hr x 0.5) +
($52.52/hr x 0.5) = $65.31].
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\80\ U.S. Bureau of Labor Statistics' (BLS) May 2022 National
Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
[GRAPHIC] [TIFF OMITTED] TP29MR24.039
We estimate that the burden and cost for IRFs for complying with
requirements of the FY 2028 IRF QRP would increase under this proposal.
Using FY 2023 data, we estimate a total of 571,151 admissions to and
512,677 planned discharges from 1,154 IRFs annually for an increase of
8,859.64 hours in burden for all IRFs [(571,151 x 0.02 hour)
admissions-(512,677 x 0.005 hour) planned discharges]. Given 0.02 hour
at $65.31 per hour to complete an average of 500 IRF-PAI admission
assessments per IRF per year minus 0.005 at $65.31 per hour to complete
an average of 449 IRF-PAI Planned Discharge assessments per IRF per
year, we estimate the total cost would be increased by $501.41 per IRF
annually, or $578,622.76 for all IRFs annually.
In section VII.F.3. of this proposed rule, we are proposing to
remove one item, Admission Class, from the IRF-PAI beginning October 1,
2026. We believe that the removal of Admission Class will result in a
decrease of 18 seconds (0.3 minutes or 0.005 hours) of clinical staff
time at admission beginning with the FY 2028 IRF QRP. We believe the
IRF-PAI item, Admission Class, is completed equally by a Registered
Nurse (RN) and a Licensed Practical and Licensed Vocational Nurse (LPN/
LVN). Individual IRFs determine the staffing resources necessary.
We estimate that the burden and cost for IRFs for complying with
requirements of the FY 2028 IRF QRP would decrease under this proposal
in section VII.F.3. Specifically, we believe that there will be a 2.47
hour decrease in clinical staff time to report data for each IRF-PAI
completed at admission. Using data from FY 2023, we estimate 571,151
admission assessments from 1,154 IRFs annually. This equates to a
decrease of 2,855.76 hours in burden at admission for all IRFs (0.005
hour x 571,151 admissions). Given 0.005 hour at $65.31 per hour to
complete an average of 500 IRF-PAI admission assessments per IRF per
year, we estimate the total cost will be decreased by $161.62
($186,509.36 total decrease/1,154 IRFs) per IRF annually, or
$186,509.36 for all IRFs annually, based on the proposal to remove one
item from the IRF-PAI.
In summary, under OMB control number 0938-0842, the changes to the
IRF QRP will result in a burden increase of $339.79 per IRF
($392,113.40/1,154 IRFs). The total cost increase related to this
proposed information collection is approximately $392,113.40 and is
summarized in Table 16.
[[Page 22284]]
[GRAPHIC] [TIFF OMITTED] TP29MR24.040
We invite public comments on the proposed information collection
requirements.
IX. Regulatory Impact Analysis
A. Statement of Need
This proposed rule updates the IRF prospective payment rates for FY
2025 as required under section 1886(j)(3)(C) of the Act and in
accordance with section 1886(j)(5) of the Act, which requires the
Secretary to publish in the Federal Register on or before August 1
before each FY, the classification and weighting factors for CMGs used
under the IRF PPS for such FY and a description of the methodology and
data used in computing the prospective payment rates under the IRF PPS
for that FY. This proposed rule would also implement section
1886(j)(3)(C) of the Act, which requires the Secretary to apply a
productivity adjustment to the market basket percentage increase for FY
2012 and subsequent years.
Furthermore, this proposed rule proposes to adopt policy changes to
the IRF QRP under the statutory discretion afforded to the Secretary
under section 1886(j)(7) of the Act. This rule proposes updates to the
IRF QRP requirements beginning with the FY 2028 IRF QRP.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), Executive Order 14094 on Modernizing Regulatory
Review (April 6, 2023), 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 (March 22,
1995; Pub. L. 104-4), and Executive Order 13132 on Federalism (August
4, 1999).
Executive Orders 12866 and 13563 direct 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). Executive
Order 14094 (Modernizing Regulatory Review) amends section 3(f)(1) of
Executive Order 12866 (Regulatory Planning and Review). The amended
section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a rule:
(1) having an annual effect on the economy of $200 million or more in
any 1 year (adjusted every 3 years by the Administrator of OMB's Office
of Information and Regulatory Affairs (OIRA) for changes in gross
domestic product), or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, territorial, or
Tribal governments or communities; (2) creating a serious inconsistency
or otherwise interfering with an action taken or planned by another
agency; (3) materially altering the budgetary impacts of entitlement
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or (4) raise legal or policy issues for which
centralized review would meaningfully further the President's
priorities or the principles set forth in the Executive order, as
specifically authorized in a timely manner by the Administrator of OIRA
in each case.
A regulatory impact analysis (RIA) must be prepared for major rules
with significant regulatory action/s and/or with significant effects as
per section 3(f)(1) ($200 million or more in any 1 year). We estimate
the total impact of the policy updates described in this proposed rule
by comparing the estimated payments in FY 2025 with those in FY 2024.
This analysis results
[[Page 22285]]
in an estimated $255 million increase for FY 2025 IRF PPS payments.
Additionally, we estimate that costs associated with updating the
reporting requirements under the IRF QRP result in an estimated
$392,113.40 additional cost for IRFs in FY 2026 for purposes of meeting
the FY 2028 IRF QRP. Based on our estimates, OMB's Office of
Information and Regulatory Affairs has determined this rulemaking is
significant per section 3(f)(1) as measured by the $200 million or more
in any 1 year, and hence also a major rule under Subtitle E of the
Small Business Regulatory Enforcement Fairness Act of 1996 (also known
as the Congressional Review Act). Accordingly, we have prepared an RIA
that, to the best of our ability, presents the costs and benefits of
the rulemaking.
C. Anticipated Effects
1. Effects on IRFs
The 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 having revenues of $ 9.0
million to $ 47.0million or less in any 1 year depending on industry
classification, or by being nonprofit organizations that are not
dominant in their markets. (For details, see the Small Business
Administration's final rule that set forth size standards for health
care industries, at 65 FR 69432 at https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf, effective January 1, 2017, and updated on August 19, 2019.) 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 1,154 IRFs, of which approximately 50
percent are nonprofit facilities) are considered small entities and
that Medicare payment constitutes the majority of their revenues. HHS
generally uses a revenue impact of 3 to 5 percent as a significance
threshold under the RFA. As shown in Table 17, we estimate that the net
revenue impact of the proposed rule on all IRFs is to increase
estimated payments by approximately 2.5 percent. The rates and policies
proposed in this rule would not have a significant impact (not greater
than 5 percent) on a substantial number of small entities. The
estimated impact on small entities is shown in Table 17. MACs 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 an
RIA 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 shown in Table 17, we estimate that the net revenue
impact of this proposed rule on rural IRFs is to increase estimated
payments by approximately 4.6 percent based on the data of the 130
rural units and 13 rural hospitals in our database of 1,154 IRFs for
which data were available. We estimate an overall impact for rural IRFs
in all areas between 0.8 percent and 10.4 percent. As a result, we
anticipate that this proposed rule will not have a significant negative
impact on a substantial number of small entities.
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-04, enacted March 22, 1995) (UMRA) also requires that agencies
assess anticipated costs and benefits before issuing any rule whose
mandates require spending in any 1 year of $100 million in 1995
dollars, updated annually for inflation. In 2024, that threshold is
approximately $183 million. This proposed rule does not mandate any
requirements for State, local, or Tribal governments, or for the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it issues 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, this proposed rule will not have a substantial
effect on State and local governments, preempt State law, or otherwise
have a federalism implication.
2. Detailed Economic Analysis
This rule proposes updates to the IRF PPS rates contained in the FY
2024 IRF PPS final rule (88 FR 509564). Specifically, this proposed
rule proposes updates to the CMG relative weights and ALOS values, the
wage index, and the outlier threshold for high-cost cases. This
proposed rule would apply a productivity adjustment to the FY 2025 IRF
market basket percentage increase in accordance with section
1886(j)(3)(C)(ii)(I) of the Act.
We estimate that the impact of the changes and updates described in
this proposed rule would be a net estimated increase of $255 million in
payments to IRFs. The impact analysis in Table 17 of this proposed rule
represents the projected effects of the proposed updates to IRF PPS
payments for FY 2025 compared with the estimated IRF PPS payments in FY
2024. We determine 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 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 2025, we are proposing to implement
the standard annual revisions described in this proposed rule (for
example, the update to the wage index and market basket percentage
increase used to adjust the Federal rates). We are also reducing the FY
2025 IRF market basket percentage increase by a productivity adjustment
in accordance with section 1886(j)(3)(C)(ii)(I) of the Act. We propose
the estimate of the total increase in payments to IRFs in FY 2025,
relative to FY 2024, would be approximately $255 million.
This estimate is derived from the application of the FY 2025 IRF
market basket percentage increase, reduced by a productivity adjustment
in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, which
yields an estimated increase in aggregate payments to IRFs of $280
million. However, there is an estimated $25 million decrease in
aggregate payments to IRFs due to the update to the outlier threshold
amount. Therefore,
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we estimate that these proposed updates would result in a net increase
in estimated payments of $255 million from FY 2024 to FY 2025.
The effects of the proposed updates that impact IRF PPS payment
rates are shown in Table 17. The following proposed updates that affect
the IRF PPS payment rates are discussed separately below:
The effects of the proposed update to the outlier
threshold amount, from approximately 3.2 percent to 3.0 percent of
total estimated payments for FY 2025, consistent with section
1886(j)(4) of the Act.
The effects of the proposed annual market basket update
(using the 2021-based IRF market basket) to IRF PPS payment rates, as
required by sections 1886(j)(3)(A)(i) and (j)(3)(C) of the Act,
including a productivity adjustment in accordance with section
1886(j)(3)(C)(ii)(I) of the Act.
The effects of applying the proposed budget-neutral labor-
related share and wage index adjustment, as required under section
1886(j)(6) of the Act, accounting for the permanent cap on wage index
decreases when applicable.
The effects of the proposed budget-neutral changes to the
CMG relative weights and ALOS values under the authority of section
1886(j)(2)(C)(i) of the Act.
The total change in proposed estimated payments based on
the FY 2025 payment changes relative to the estimated FY 2024 payments.
3. Description of Table 17
Table 17 shows the overall impact on the 1,154 IRFs included in the
analysis.
The next 12 rows of Table 17 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 1,011 IRFs located in
urban areas included in our analysis. Among these, there are 651 IRF
units of hospitals located in urban areas and 360 freestanding IRF
hospitals located in urban areas. There are 143 IRFs located in rural
areas included in our analysis. Among these, there are 130 IRF units of
hospitals located in rural areas and 13 freestanding IRF hospitals
located in rural areas. There are 494 for-profit IRFs. Among these,
there are 459 IRFs in urban areas and 35 IRFs in rural areas. There are
564 non-profit IRFs. Among these, there are 475 urban IRFs and 89 rural
IRFs. There are 96 government-owned IRFs. Among these, there are 77
urban IRFs and 19 rural IRFs.
The remaining four parts of Table 17 show IRFs grouped by their
geographic location within a region, by teaching status, and by DSH
patient percentage (PP). First, IRFs located in urban areas are
categorized for their location within a particular one of the nine
Census geographic regions. Second, IRFs located in rural areas are
categorized for their location within a particular one of the nine
Census 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. IRFs are then 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. Finally, IRFs are
grouped by DSH PP, including IRFs with zero DSH PP, IRFs with a DSH PP
less than 5 percent, IRFs with a DSH PP between 5 and less than 10
percent, IRFs with a DSH PP between 10 and 20 percent, and IRFs with a
DSH PP greater than 20 percent.
The estimated impacts of each policy described in this proposed
rule to the facility categories listed are shown in the columns of
Table 17. The description of each column is as follows:
Column (1) shows the facility classification categories.
Column (2) shows the number of IRFs in each category in
our FY 2025 analysis file.
Column (3) shows the number of cases in each category in
our FY 2025 analysis file.
Column (4) shows the estimated effect of the adjustment to
the outlier threshold amount.
Column (5a) shows the estimated effect of the FY 2025
update to the IRF labor-related share, the FY 2024 CBSA delineations,
and FY 2025 wage index with the 5 percent cap, in a budget-neutral
manner.
Column (5b) shows the estimated effect of the update to
the IRF labor-related share, FY2025 CBSA delineations and wage index
with the 5 percent cap, in a budget-neutral manner.
Column (6) shows the estimated effect of the update to the
CMG relative weights and ALOS values, in a budget-neutral manner.
Column (7) compares our estimates of the payments per
discharge, incorporating all of the policies reflected in this proposed
rule for FY 2025 to our estimates of payments per discharge in FY 2024.
The average estimated increase for all IRFs is approximately 2.5
percent. This estimated net increase includes the effects of the IRF
market basket update for FY 2025 of 2.8 percent, which is based on a
IRF market basket percentage increase of 3.2 percent, less a 0.4
percentage point productivity adjustment, as required by section
1886(j)(3)(C)(ii)(I) of the Act. It also includes the approximate 0.2
percent overall decrease in estimated IRF outlier payments from the
update to the outlier threshold amount. Since we are proposing to make
updates to the IRF wage index, labor-related share and the CMG relative
weights in a budget-neutral manner, we estimate there is no expected
impact to total estimated IRF payments in aggregate. However, as
described in more detail in each section, we estimate there will be
expected impacts to the estimated distribution of payments among
providers.
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4. Impact of the Update to the Outlier Threshold Amount
The estimated effects of the update to the outlier threshold
adjustment are presented in column 4 of Table 17.
For the FY 2025 proposed rule, we used FY 2023 IRF claims data and
based on that analysis, we estimated that IRF outlier payments as a
percentage of total estimated IRF payments would be 3.2 percent in FY
2024. Thus, we are adjusting the outlier threshold amount in this
proposed rule to maintain total estimated outlier payments equal to 3
percent of total estimated payments in FY 2025.
The estimated change in total IRF payments for FY 2025, therefore,
includes an approximate 0.2 percentage point decrease in payments
because the estimated outlier portion of total payments is estimated to
decrease from approximately 3.2 percent to 3.0 percent.
The impact of this update to the outlier threshold amount (as shown
in column 4 of Table 17) is to decrease estimated overall payments to
IRFs by 0.2 percentage point.
5. Impact of the Wage Index, Labor-Related Share, and Wage Index Cap
In column 5a of Table 17, we present the effects of the budget-
neutral update of the wage index and labor-related share, taking into
account the permanent 5 percent cap on wage index decreases when
applicable, without taking into account the updated FY2025 CBSA
delineations, which are presented separately in the next column. The
changes to the wage index and the labor-related share are discussed
together because the wage index is applied to the labor-related share
portion of payments, so the changes in the two have a combined effect
on payments to providers. As discussed in section VI.E. of this
proposed rule, we update the FY 2025 labor-related share from 74.1
percent in FY 2024 to 74.2 percent in FY 2025.
6. Impact of the Updated CBSA Delineations
In column 5b of Table 17, we present the effects of the revised
FY2025 CBSA delineations. In aggregate, we do not estimate that these
updates will affect overall estimated payments to IRFs. However, we do
expect these updates to have small distributional effects. We estimate
the largest decrease in payment from the update to the FY 2025 CBSA
delineation and wage index and labor-related share (column 5b of Table
17) to be a 1.0 percent decrease for IRFs in the Rural Middle Atlantic
and the largest increase in payment to be a 1.6 percent increase for
IRFs in the Rural South Atlantic.
7. Impact of the Update to the CMG Relative Weights and ALOS Values
In column 6 of Table 17, we present the effects of the budget-
neutral update of the CMG relative weights and ALOS values. In the
aggregate, we do not estimate that these updates will affect overall
estimated payments of IRFs. However, we do expect these updates to have
small distributional effects between -0.1 to 0.1.
8. Effects of Requirements for the IRF QRP Beginning With the FY 2028
IRF QRP
In accordance with section 1886(j)(7)(A) of the Act, the Secretary
must reduce by 2 percentage points the annual market basket increase
factor otherwise applicable to an IRF for a fiscal year if the IRF does
not comply with the requirements of the IRF QRP for that fiscal year.
In section IX.A. of the proposed rule, we discussed the method for
applying the 2 percentage points reduction to IRFs that fail to meet
the IRF QRP requirements.
As discussed in sections VII.C.3. and VII.C.5. of the preamble of
this proposed rule, we are proposing to adopt four new items as
standardized patient assessment data elements under the SDOH category
and to modify one item currently collected as a standardized patient
assessment data element. Although the proposed increase in burden will
be accounted for in a revised information collection request under OMB
control number (0938-0842), we are providing impact information. We
believe the proposed items would be completed equally by a Registered
Nurse (RN) (50 percent of the time) and a Licensed Practical and
Vocational Nurses (LPN/LVN) (50 percent of the time). For the purposes
of calculating the costs associated with the collection of information
requirements, we obtained median hourly wages for these staff from the
U.S. Bureau of Labor Statistics' (BLS) May 2022 National Occupational
Employment and Wage
[[Page 22290]]
Estimates.\81\ To account for other indirect costs and fringe benefits,
we doubled the hourly wage. These amounts are detailed in Table 18.
---------------------------------------------------------------------------
\81\ U.S. Bureau of Labor Statistics' (BLS) May 2022 National
Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
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With 571,151 admissions from 1,154 IRFs annually, we estimated an
annual burden increase of 8,859.64 hours [(571,151 x 0.02 hour)
admissions-(512,677 x 0.005 hour) planned discharges] and an increase
of $578,622.76 [8,859.64 hours x $65.31/hr)]. For each IRF, we estimate
an annual burden increase of 7.68 hours (8,859.64 hours/1,154 IRFs) for
an annual increase of $501.41 ($578,622.76/1,154 IRFs).
As discussed in section VII.F.3. of this proposed rule, we are
proposing to remove one item, Admission Class, from the IRF-PAI
beginning October 1, 2026. We estimate the removal of this item would
result in a decrease of 0.005 hour of clinical staff time beginning
with admission assessments completed on October 1, 2026. Although the
proposed decrease in burden will be accounted for in a revised
information collection request under OMB control number 0938-0842, we
are providing impact information. We estimate this item is completed
equally by an RN (50 percent of the time) and by an LPN/LVN (50 percent
of the time). For the purposes of calculating the costs associated with
the collection of information requirements, we obtained median hourly
wages for these staff from the U.S. Bureau of Labor Statistics' (BLS)
May 2022 National Occupational Employment and Wage Estimates.\82\ To
account for other indirect costs and fringe benefits, we doubled the
hourly wage. These amounts are detailed in Table 18. With 571,151
admissions from 1,154 IRFs annually, we estimate an annual burden
decrease of 2,855.76 hours (571,151 admissions x 0.005 hour) and a
decrease of $186,509.36 [2,855.76 hours x $65.31/hr)]. For each IRF we
estimate an annual burden decrease of 2.47 hours (2,855.76 hours/1,154
IRFs) for an annual decrease of $161.62 ($186,509.36/1,154 IRFs).
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\82\ U.S. Bureau of Labor Statistics' (BLS) May 2022 National
Occupational Employment and Wage Estimates. https://www.bls.gov/oes/current/oes_nat.htm.
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In summary, under OMB control number 0938-0842, the proposed
changes to the IRF QRP would result in an estimated increase in
programmatic burden for 1,154 IRFs. The total burden increase is
approximately $392,113.40 for all IRFs and $339.79 per IRF and is
summarized in Table 19.
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We invite public comments on the overall impact of the IRF QRP
proposals for FY 2028.
D. Alternatives Considered
The following is a discussion of the alternatives considered for
the IRF PPS updates contained in this proposed rule.
As noted previously in the proposed rule, 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 and section 1886(j)(3)(C)(ii)(I) of the Act requires the
Secretary to apply a productivity adjustment to the market basket
percentage increase for FY 2025. Thus, in accordance with section
1886(j)(3)(C) of the Act, we are updating the IRF prospective payments
in this proposed rule by 2.8 percent (which equals the 3.2 percent
proposed IRF market basket percentage increase for FY 2025 reduced by a
proposed 0.4 percentage point productivity adjustment as determined
under section 1886(b)(3)(B)(xi)(II) of the Act (as required by section
1886(j)(3)(C)(ii)(I) of the Act)).
We considered maintaining the existing CMG relative weights and
average length of stay values for FY 2025. However, 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 recent changes in IRF utilization and case mix, we believe that it
is appropriate to propose updates to the CMG relative weights and
average length of stay values at this time to ensure that IRF PPS
payments continue to reflect as accurately as possible the current
costs of care in IRFs.
We considered maintaining the existing outlier threshold amount for
FY 2025. However, analysis of updated FY 2024 data indicates that
estimated outlier payments would be more than 3 percent of total
estimated payments for FY 2025, unless we updated the outlier threshold
amount. Consequently, we are proposing to adjust the outlier threshold
amount to maintain estimated outlier payments at 3 percent of estimated
aggregate payments in FY 2025.
With regard to the proposal to collect four new items as
standardized patient assessment data elements under the SDOH category
and modify one item collected as a standardized patient assessment data
element under the SDOH category beginning with the FY 2028 IRF QRP, we
believe these proposals would advance the CMS National Quality Strategy
Goals of equity and engagement. We considered the alternative of
delaying the proposal to collect these assessment items but given the
fact they would encourage meaningful collaboration among healthcare
providers, caregivers, and community-based organizations to address
SDOH prior to discharge from the IRF, we believe further delay is
unwarranted.
With regard to the proposal to remove one item, Admission Class,
from the IRF-PAI, we routinely review the IRF-PAI for redundancies and
opportunities to simplify data submission requirements. We have
identified that this item is currently not used in the calculation of
quality measures already adopted in the IRF QRP, payment, survey, or
care planning, and therefore no alternatives were considered.
E. Regulatory Review Costs
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed rule, we
should estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
commenters on the FY 2025 IRF PPS proposed rule will be the number of
reviewers of last year's proposed rule. We acknowledge that this
assumption may understate or overstate the costs of reviewing this
proposed rule. It is possible that not all commenters reviewed the FY
2024 IRF PPS proposed rule in detail, and it is also possible that some
reviewers chose not to comment
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on the FY 2024 proposed rule. For these reasons, we thought that the
number of commenters would be a fair estimate of the number of
reviewers of this proposed rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this proposed rule,
and therefore, for the purposes of our estimate we assume that each
reviewer reads approximately 50 percent of the rule.
Using the national mean hourly wage data from the May 2022 BLS for
Occupational Employment Statistics (OES) for medical and health service
managers (SOC 11-9111), we estimate that the cost of reviewing this
rule is $123.06 per hour, including overhead and fringe benefits
(https://www.bls.gov/oes/current/oes_nat.htm). Assuming an average
reading speed, we estimate that it would take approximately 3 hours for
the staff to review half of proposed rule. For each reviewer of the
rule, the estimated cost is $369.18 (3 hours x $123.06). Therefore, we
estimate that the total cost of reviewing this regulation is $16,613.10
($369.18 x 45 reviewers).
F. Accounting Statement and Table
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), in Table 20 we have prepared an accounting
statement showing the classification of the expenditures associated
with the provisions of this proposed rule. Table 20 provides our best
estimate of the increase in Medicare payments under the IRF PPS as a
result of the updates presented in this proposed rule based on the data
for 1,154 IRFs in our database.
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G. Conclusion
Overall, the estimated payments per discharge for IRFs in FY 2025
are projected to increase by 2.5 percent, compared with the estimated
payments in FY 2024, as reflected in column 7 of Table 17.
IRF payments per discharge are estimated to increase by 2.4 percent
in urban areas and 4.6 percent in rural areas, compared with estimated
FY 2024 payments. Payments per discharge to rehabilitation units are
estimated to increase 1.8 percent in urban areas and 4.6 percent in
rural areas. Payments per discharge to freestanding rehabilitation
hospitals are estimated to increase 2.8 percent in urban areas and 4.7
percent in rural areas.
Overall, IRFs are estimated to experience a net increase in
payments as a result of the policies in this proposed rule. The largest
payment increase is estimated to be a 10.4 percent increase for IRFs
located in the Rural Middle Atlantic region. The analysis above,
together with the remainder of this preamble, provides an RIA.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by OMB.
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare &
Medicaid Services, approved this document on March 19, 2024.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-06550 Filed 3-27-24; 4:15 pm]
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