The Centers for Medicare and Medicaid Services has proposed a 2.6% payment rate increase for inpatient rehabilitation facilities in 2026.
The 2.6% is based on a market basket update of 3.4%, less a proposed 0.8 percentage point productivity adjustment, under the Inpatient Rehabilitation Facility Prospective Payment System proposed rule for fiscal year 2026.
If more recent data becomes available, CMS said it would use this data, if appropriate, to determine the 2026 market basket percentage increase and the productivity adjustment in the final rule.
Last year, inpatient rehabilitation facilities got a proposed payment rate increase of 2.8% for 2025.
CMS also proposed to update the outlier threshold to maintain outlier payments at 3% of total payments.
In total, the inpatient rehab rate changes are expected to result in a preliminary estimated increase of $295 million for IRF payments in 2026.
Since the inpatient rehab quality reporting program is a pay-for-reporting program, IRFs that do not meet reporting requirements are subject to a 2 percentage point reduction in their Annual Increase Factor. Additionally, measures adopted into the program are publicly reported on the Care Compare tool at Medicare.gov.
The proposed rule includes annual updates to the case-mix-group relative weights and average length of stay values, the wage index and associated impact analysis.
CMS is proposing to remove two quality measures and four Social Determinant of Health (SDOH) standardized patient assessment data elements, as well as amending the reconsideration policy and process.
In addition, CMS is seeking feedback with four Requests for Information (RFIs) on future measures, data collection burden reduction, data submission timelines and on the adoption of health IT standards.
CMS is seeking feedback on four RFIs: a future measure on the topics of interoperability, nutrition, delirium and well-being; potential revisions to the IRF-Patient Assessment Instrument, which would allow CMS to reduce burden; potential revisions to the data submission deadlines for assessment data, which would allow CMS to provide IRFs with more timely quality data; and advancing digital quality measurement to seek feedback on current adoption of health information technology and standards, including Fast Healthcare Interoperability Resources (FHIR).
CMS proposes:
- To remove two measures for the COVID-19 Vaccination Coverage among Healthcare Personnel measure and the COVID-19 Vaccine Percent of Patients/Residents Who Are Up to Date measure.
- To remove four SDOH standardized patient assessment data elements to reduce burden. Data submission on one item for Living Situation, two items for Food and one item for Utilities will be optional beginning Oct. 1, and will be removed with the FY2028 inpatient rehab quality reporting program.
- To amend the reconsideration policy and process to remove the word "extenuating" used in previous iterations of the reconsideration policy and replace it with "extraordinary."
CMS will also permit IRFs to request, and CMS to grant, an extension to file a request for reconsideration of a noncompliance determination if the IRF was affected by an extraordinary circumstance beyond its control.
Email the writer: SMorse@himss.org