skip to Main Content
Written by: Darlene D'Altorio-Jones (1959-2015) on Monday, September 19, 2011 Posted in: Inpatient Rehab

CMS-1349-F  updates specific to Market Basket Values.

Many values become a portion of how IRFs are paid, the facility adjusters create some of the largest differences in payment of case rates. One area of facility adjusters is the Market Basket value. Market Basket is a value that is influenced by many factors and one that relies on inputs from cost reports, benchmark I&O data and various industry calculations.

Stated in the 2012 regulations for IRFs is the following:

"Section 1886(j)(3)(C) of the Act requires the Secretary to establish an increasefactor that reflects changes over time in the prices of an appropriate mix of goods andservices included in the covered IRF services, which is referred to as a market basketindex. According to section 1886(j)(3)(A)(i) of the Act, the increase factor shall be usedto update the IRF Federal prospective payment rates for each FY."

The last full year of cost reports (2008),  used to review the future market basket re-basing (from 2002) and increase values has hit a SNAFU in an attempt to provide free standing and unit based IRFs a unique set of values.  Presently, the Market Basket reflects RPL which is a rolled up value for rehabilitation, psychiatric and long term care markets.

Somewhere in all the data,  it was proposed there could be a formula or mechanism to easily discern whether a free standing rehabilitation hospital and a unit within a hospital could/should have distinct and separate calculations.  2010 regulations stated they would re-review the concept in 2011.  Unfortunately, when cost reports were evaluated between provider types,  cost levels and comparability were less than optimal and there was not enough time to understand the differences to make a separate market basket specific to rehabilitation. Upon further review, CMS will add additional cost report instructions and forms specific to staffing and benefits (one of the largest costs for all hospitals) to gather more granular data for future decision making.

The next attempt may be to provide an RP value for rehabilitation and psychiatric facilities, leaving LTACH their own model for market basket. Although it’s too early to tell, one thing is for certain, it will be important to closely monitor cost report data as future reductions (non-participation in quality indicator reporting) and or incentives will be placed into that value to determine payment — a payment that will remain in effect for one full fiscal year.

Back to top