Inpatient Rehabilitation PPS

May 15, 2025

At A Glance

The Centers for Medicare & Medicaid Services (CMS) April 11 issued its fiscal year (FY) 2026 proposed rule for the inpatient rehabilitation facility (IRF) prospective payment system (PPS). This rule proposes to update IRF payments and modify the IRF quality reporting program (QRP) measures and reporting requirements.

KEY HIGHLIGHTS

The proposed rule would:

Increase overall payments by a net 2.8%. This includes a proposed market basket update of 3.4%, less a productivity cut of 0.8%, as well as a 0.2% increase related to outlier payments.
Make a minor upward adjustment to the labor-related share.
Remove two measures and four SPADEs from the IRF QRP.
Solicit comments on approaches and opportunities to streamline regulations and reduce administrative burdens on hospitals and other providers.

AHA TAKE

The proposed rule includes routine payment updates to the IRF PPS. However, the AHA remains concerned that market basket increases have not kept pace with the rise in hospital expenses in recent years. We will continue to highlight the financial and other pressures facing hospitals and pursue opportunities for regulatory relief.