Fact Sheet: Inpatient Rehabilitation Facilities (IRFs)

Inpatient rehabilitation facilities (IRFs) have faced significant scrutiny from Congress and the Centers for Medicare & Medicaid Services (CMS) in recent years, which has led to multiple interventions, including strict criteria for IRF patients, multiple payment cuts and other policy restrictions. Collectively, these interventions have reshaped the population treated in IRFs by dramatically reducing the overall volume and steadily increasing the medical complexity of IRF patients. The president’s fiscal year (FY) 2016 budget proposes two IRF cuts: returning the “60% Rule” threshold back to 75 percent and cutting the annual market-basket update. The 60% Rule is a Medicare facility criterion that requires each IRF to discharge at least 60 percent of its patients with one of 13 qualifying conditions. Inpatient rehabilitation hospitals or units that do not comply with the 60% Rule will lose the IRF payment classification and will instead be categorized as general acute care hospitals. The Medicare Payment Advisory Commission (MedPAC) also recommended at its January meeting, paying IRFs a lower rate for selected patients also treated in skilled nursing facilities (SNFs). These proposals ignore these fundamental IRF shifts and are now, in fact, unnecessary and detrimental to patients’ access to the unmatched services provided by IRFs.