FY 2025 Inpatient Rehabilitation Facility PPS Proposed Rule Summary

On March 29, 2024, CMS published in the Federal Register (89 FR 22246) a proposed rule on the Medicare inpatient rehabilitation facility prospective payment system (IRF PPS) for federal fiscal year (FY) 2025. In addition to provisions that would update the IRF PPS payment rates and outlier threshold for FY 2025, CMS also proposes to update the market area delineations used to adjust payments under the IRF PPS to reflect geographic differences in the cost of labor, and proposes a three-year phase-out of the payment adjustment to IRFs in rural areas that are defined as urban under the new labor market delineations. The rule also proposes four new and one modified patient assessment elements for use in the IRF Quality Reporting Program (QRP) effective in FY 2028, and the removal of an existing assessment item effective in FY 2027. Lastly, the proposed rule requests input that would inform future changes to the IRF QRP, as well as a future star rating system for IRFs. CMS estimates that the Medicare IRF PPS payments in FY 2025 will be about $255 million higher than in FY 2024. The deadline for comments on the proposed rule is May 28, 2024.