Medicare Issues Payment Rules for Inpatient Rehabilitation and Skilled Nursing Facilities

August 3, 2023

Payment rate and quality measure updates were the primary policies included in the final payment rules for inpatient rehabilitation [PDF] and skilled nursing facilities [PDF] (IRFs and SNFs, respectively) issued recently by the Centers for Medicare & Medicaid Services (CMS). The policies of these rules will go into effect on October 1, 2023.

IRF Prospective Payment System

Payment Rates

CMS estimates that overall IRF payments for fiscal year (FY) 2024 will increase by 4.0% (or $355 million) relative to payments in FY 2023.

Quality Reporting Program Updates

CMS will add the following measures to the IRF QRP in future program years:

Discharge Function Score (DC Function) measure (FY 2025) to replace measures being removed
COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (Patient/Resident COVID-19 Vaccine) measure (FY 2026)
COVID-19 Vaccination Coverage among Healthcare Personnel (HCP COVID-19 Vaccine) measure (Modified for FY 2025)

The following measures will be removed from the IRF QRP beginning with the FY 2025 program year:

Application of Functional Assessment/Care Plan measure
IRF Functional Outcome Measure: Change in Self-Care Score for Medical Rehabilitation Patients (Change in Self-Care Score)
IRF Functional Outcome Measure: Change in Mobility Score for Medical Rehabilitation Patients (Change in Mobility Score)

SNF Prospective Payment System

Payment Rates

Payment rates for SNF services will increase by approximately 4.0% in FY 2024; an increase in spending of approximately $1.4 billion from FY 2023. This is reflective of a market basket increase of nearly 6.5% less the 2.3% patient driven payment model (PDPM) parity adjustment. The parity adjustment was phased in over two years (FYs 2023 and 2024) to offset higher than expected Medicare spending during the transition to PDPM. With this transition, therapy delivery fell dramatically while spending continued to increase. ASHA remains committed to working with CMS to ensure speech-language pathology services continue to be an integral part of service delivery in SNFs and patient quality and outcomes are maintained.

Updates to the PDPM ICD-10 Mappings

In a response [PDF] to a request for information included in the proposed rule released earlier this year, ASHA recommended CMS update the speech-language pathology International Classification of Diseases (ICD) 10 code mappings to include codes J00-J06 associated with respiratory conditions. CMS responded stating that it would consider the inclusion of these codes in future rulemaking.

Quality Reporting Program (QRP) Updates

CMS will add the following measures to the SNF QRP in future years:

Discharge Function Score (DC Function) measure (FY 2025) to replace measures being removed
COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (Patient/Resident COVID-19 Vaccine) measure (FY 2026)
COVID-19 Vaccination Coverage among Healthcare Personnel (HCP COVID-19 Vaccine) measure (Modified for FY 2025)

CMS will remove the following measures beginning in FY 2025:

Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (Application of Functional Assessment/Care Plan) measure
Application of the IRF Functional Outcome Measures: Change in Self-Care Score for Medical Rehabilitation Patients (Change in Self-Care Score)
Application of the IRF Functional Outcome Measures: Change in Mobility Score for Medical Rehabilitation Patients (Change in Mobility Score)

Value-Based Purchasing Program (VBP) Updates

The following measures will be added to the VBP in future years:

Nursing Staff Turnover Measure (FY 2026)
Long Stay Hospitalization Measure per 1,000 Resident Days (FY 2027)
Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (FY 2027)
Discharge Function Score Measure (FY 2027)
Skilled Nursing Facility Within Stay Potentially Preventable Readmissions (SNF WS PPR) (FY 2028)

Beginning with the FY 2027 program year, a health equity scoring adjustment will be adopted to reward facilities that perform well and serve a population where at least 20% of patients are dually eligible for Medicare and Medicaid.