CMS finalized fiscal 2027 payment rules for inpatient rehabilitation facilities and hospices July 30, giving both settings a 2.3% payment increase.
Eleven things to know:
Inpatient rehabilitation facilities
1. CMS finalized a 2.3% payment increase for IRFs in fiscal 2027, down from the 2.4% increase proposed in April. The update reflects a 3.2% market basket increase reduced by a 0.9 percentage-point productivity adjustment.
2. The agency estimates the rate-setting changes will increase aggregate IRF payments by $340 million in fiscal 2027. The proposed rule had estimated a $355 million increase. CMS also finalized an outlier threshold intended to keep outlier payments at 3% of total payments.
3. CMS clarified that all therapies — rather than only some therapies — must begin within 36 hours of a patient’s admission to an IRF. The agency said the change aims to reduce questions and provide greater clarity for the industry.
4. The agency finalized changes requiring an IRF’s initial interdisciplinary team meeting to occur on or before the fourth day after admission. Subsequent meetings must occur weekly, defined as every seven days from the initial meeting.
5. Beginning with the fiscal 2029 IRF Quality Reporting Program, facilities will have approximately 45 days to submit quality data, down from 4.5 months. CMS said the change could reduce the lag between data submission and public reporting by up to three months.
Click here to access the 137-page final rule.
6. CMS finalized a 2.3% hospice payment increase for fiscal 2027, down from the proposed 2.4% increase. The agency estimates the final rule will raise payments by $755 million compared with fiscal 2026, below the $785 million increase projected in the proposed rule.
7. Hospices that do not meet quality reporting requirements will receive a 1.7% payment cut from fiscal 2026 rates. The cut reflects a 4 percentage-point penalty applied to the 2.3% payment update.
8. The fiscal 2027 hospice aggregate payment cap will be $36,174.75, up from $35,361.44 in fiscal 2026. The final cap is slightly lower than the $36,210.11 CMS proposed in April.
9. CMS finalized a requirement that hospices provide an election statement addendum to every Medicare beneficiary who elects hospice care, rather than only beneficiaries who request it. The document identifies conditions, services, items and drugs the hospice considers unrelated to the patient’s terminal illness and therefore not covered by the hospice benefit.
10. CMS will add an icon to Medicare’s Care Compare website identifying hospices that submit no quality data or less than 90% of required data during a year. The change will take effect no earlier than fiscal 2028. About 20% of hospices failed to meet reporting requirements in each of fiscal years 2024, 2025 and 2026, according to CMS.
11. The rule also publishes updated provider-level scores under CMS’ Service and Spending Variation Index, which uses nine claims-based measures to identify potentially concerning hospice utilization and non-hospice spending. CMS also expanded the clinicians permitted to discharge patients from hospice and aligned its telehealth face-to-face regulations with federal law.
Click here to access the 160-page final rule.
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