CMS Releases Final Rule for IRFs

Original story posted on: August 2, 2021

The Centers for Medicare & Medicaid Services (CMS) has issued the Final Rule for inpatient rehabilitation facilities (IRFs) that takes effect Oct. 1.  The rule updates payment policies for the 2022 fiscal year (FY), updates IRF Quality Reporting Program (QRP) requirements for FY 2022, and addresses comments related to the requests for information associated with the proposed rule.

We have summarized the major components below:

Updates to Payment Rates

Following standard methodology, CMS has finalized updates to the IRF payment rates, providing for a net increase in payments of 1.5 percent, or $130 million, as compared to FY 2021. This increase, which is somewhat lower than the increase in the proposed rule, is based on an update to the IRF PPS payment rates by 2 percent,  based on the IRF market basket update of 2.6 percent, less a 0.7-percentage point multi-factor productivity (MFP) adjustment. This brings the final FY 2022 standard payment conversion factor to $17,240, as compared to $16,856 for FY 2021.

The final rule also adjusts the outlier threshold to maintain outlier payments at 3.0 percent in FY 2022. The adjustment will result in a 0.4-percentage point decrease to overall outlier payments.

Updates to Quality Reporting Program

There has been no change to the penalty for failure to meet the reporting requirements, and IRFs that do not meet reporting requirements will continue to be subject to a 2-percentage point reduction in their annual increase factor. 

In efforts to address COVID-19 and assess whether organizations are taking steps to limit the spread of the virus among their healthcare personnel, CMS has finalized a measure to require IRFs to report COVID-19 HCP vaccinations. 

The data will be reported through the National Healthcare Safety Network (NHSN) Healthcare Personnel Safety (HPS) component – not on the IRF-PAI. The submission requirements are as follows:

  • IRFs will submit data for a minimum of one week per month. The Centers for Disease Control and Prevention (CDC) will calculate a quarterly summary from the three monthly modules and follow a standardized refresh policy for reporting on the Care Compare website.
  • The initial reporting quarter will be Oct. 1, 2021, through Dec. 31, 2021.

The final rule also updates the denominator for the transfer of health (TOH) information to the Patient-Post Acute Care (PAC) quality measure by excluding patients who are discharged home under the care of an organized home health service or hospice from the denominator. 

Of note:

In response to the public health emergency (PHE) for COVID, CMS released an interim final rule (85 FR 27595 through 27596), which delayed the compliance date for the collection and reporting of the transfer of health information measures for at least one full fiscal year after the end of the PHE.

Response to Requests for Information

CMS acknowledged comments from the field in response to requests for information related to Fast Healthcare Interoperability Resources (FHIR)-based standards and the expansion of data collection for several standardized patient assessment data elements (SPADEs), which include several social determinants of health (SDoH).  The agency noted that work will continue in the areas.


The Final Rule (CMS-1748-F) can be downloaded from the Federal Register at: 

Review the associated CMS fact sheet here: 

Fiscal Year (FY) 2022 Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) Final Rule (CMS-1748-F) | CMS

Angela Phillips, PT

Angela M. Phillips, PT, is President & Chief Executive Officer of Images & Associates.  A graduate of the University of Pennsylvania, School of Allied Health Professions, she has over 40 years of experience as a consultant, healthcare executive, hospital administrator, educator and clinician.  Ms. Phillips is one of the nation’s leading consultants assisting Inpatient Rehabilitation Facilities in operating effectively under the Medicare Prospective Payment System (PPS) and in addressing key issues related to compliance. Ms. Phillips is a member of the RACmonitor editorial board and is a popular panelist on Monitor Monday.

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