The Centers for Medicare & Medicaid Services today issued final rules for inpatient rehabilitation facility, skilled nursing facility and inpatient psychiatric facility payments for fiscal year 2019.
For IRFs, net payments will increase by 1.3% ($105 million) relative to FY 2018 payments, which includes a 2.9% market-basket update, offset by statutorily mandated cuts of 0.8 percentage points for productivity and an additional cut of 0.75%, and a 0.1% decrease in outlier payments. CMS also finalizes its proposal to remove the “FIM™” instrument and associated function modifiers from the IRF patient assessment instrument, effective for discharges beginning on or after Oct. 1, 2019 (FY 2020). In addition, the rule allows the post-admission physician evaluation to count as one of the mandated face-to-face visits and rehabilitation physicians to remotely lead interdisciplinary team meetings. CMS will remove two measures from the IRF Quality Reporting Program. IRFs no longer will have to report data for the NHSN MRSA or seasonal flu vaccination measures as of Oct. 1 of this year. 
SNF payments in FY 2019 will increase by 2.4% ($820 million) over FY 2018 levels, as mandated by the Bipartisan Budget Act of 2018. Effective Oct. 1, 2019, the rule finalizes the implementation of a new Patient-Driven Payment Model. This new model represents a complete redesign of the SNF PPS and bases payment on a multi-faceted clinical profile of the patient – a significant departure from the current reliance on therapy volume to set payments. With regard to quality reporting, CMS will increase from one to two the number of years of data used to calculate two measures on Nursing Home Compare to improve the validity of the results. The agency also finalizes updates to the SNF Value-based Purchasing Program, including changes in scoring methodology for low-volume SNFs and an extraordinary circumstances exemption policy. CMS estimates these updates will reduce aggregate VBP payments by $211 million.
For IPFs, CMS finalizes a net payment increase of 1.1% or $50 million in FY 2019 compared to FY 2018. This includes a 2.9% market-basket update, offset by cuts of 0.8% for productivity and a further Affordable Care Act-mandated cut of 0.75%, as well as a decrease of 0.24% due to updating the high-cost outlier threshold. While CMS originally proposed to remove eight measures from the IPF Quality Reporting Program, it only finalizes the removal of five measures. CMS stated that the three other measures originally proposed for removal are being retained as a result of overwhelming public comment emphasizing their importance.

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