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May IRFs Use All IRF PPS CMGs Without Reprisal?

Written by: Darlene D'Altorio-Jones (1959-2015) on Monday, January 19, 2015 Posted in: Inpatient Rehab

Allowing Access to All CMGs Rather Than Site-Neutral Enables Reduced Payment on Average

Read part 1

Site-neutral payment discussions using rationale from a June 2014 MedPAC study of risk- adjusted ‘like patients’ using the acute care MS-DRG, and then comparing actual payments through the PPS payment models from IRF and SNF, may need further contemplation as discussed in last week’s blog.

In the study, MedPAC included a ‘without complication or comorbid condition’ comparison; therefore, I have compared these to the lowest range CMG levels possible, and found that if utilized more often, could have reduced the payment experiences actually found and reported. Let us also recognize that the acuity of patients admitted to an IRF has risen in each of the patient types mentioned in the study, despite those values being updated annually in a payment neutral fashion in the published IRF federal rules:

  • Stroke 2002 CMI of 1.47 vs 1.56 in 2013
  • Fracture of the LE 2002 CMI of 1.08 vs 1.27 in 2013
  • Replacement of the LE 2002 CMI of .70 vs .87 in 2013
  • Other Orthopedic 2002 CMI of .95 vs 1.10 in 2013 * ( Medicare CMI – Sam Fleming, Fall AMRPA Conference Presentation.)

Higher acuity levels which reflect higher costs of care, is only one part of the discussion that needs further review before site-neutral payments are recommended and voted on in Congress. It should be argued that IRFs already have payment possibilities that should be utilized and accessed by beneficiaries without fear of retrospective denial, for which admission criteria were followed.

Many facilities believe that medical necessity for lower level CMGs may be argued later as not worthy of a rehabilitation level of care. Because this is a real possibility, IRFs steer clear of their use and those patients. They often screen and deny the patient, allowing area SNFs to pick up those patient types.

In the 2015 CMS payment table for IRF PPS, there are lower acuity CMGs, payments and average lengths of stay (patients without complications or co-morbidities) in the ‘no tier’ payment category. This category of payment is far below the average costs/stays quoted in the MedPAC report for ‘without complication or comorbid conditions’. The study utilized IRF Base Payment using the year 2011 as a basis.

IRFs rarely admit patients in the lowest CMG ranges; therefore, these payment types were not discussed. MedPAC officials stated in the report, “We found that if IRFs were paid under 2014 SNF policy, their aggregate payments for the three select conditions would decline.” The truth is, if MedPAC had looked at the IRF PPS payment tool and all the possibilities allowed to be treated, the IRF PPS tool for 2014 and now 2015 enables lesser payments too. That possibility was not mentioned or considered. Let us use the burden of care acuity and payment tool already available to IRFs rather than a ‘site-neutral’ payment, as that payment may benefit CMS even more had they considered this alternative, giving greater patient access to IRFs in these limited impairment categories.

Presently, in the 2015 federal rule IRF PPS base payment table, Fracture of the LE, whose motor impairment can be 50 percent of full capacity, has payment in a ‘no tier’ base rate of $10,681.15. These rates are well below the hip and femur fractures without complication and/or co-morbidity in the study. On average, the real experience base rate was $15,440 with a full payment of $16,588 to IRFs. All except a 0704 no tier for this impairment are less than the SNF payment (stated at $16,643) for the comparable patient type.


  • 2015 Replacement LE- 0801 no tier payment is $7,880.16 with an average LOS of 7 days. The study revealed the base payment at $12,936 and actual payment at $13,821.
  • 2015 Other orthopedic – 0901 no tier payment is $9,699.36 with an average LOS of 8 days. No comparison in the study specific to these patients.
  • 2015 Stroke – 0101 no tier payment is $9,506.35 with an average LOS of 8 days. The study revealed the base payment average to be $16,866 and actual payment at $18,300.

The June, 2014 MedPAC study doesn’t recognize that federal rule changes and ‘enforcement’ have skewed patient access pushing IRF patient-types treated to a different mix since the inception of IRF PPS in 2002. I purposefully selected the lowest CMG and no tier co-morbidity to demonstrate a point that has long been forgotten. Despite having payment capability in an IRF, these types of patients have been steered specifically to a SNF level of care.

The attempt to correlate a comparison to IRF reality now, and what it could have been if all CMGs in the spectrum of IRF PPS were utilized more uniformly, is not discussed. If CMS was not as aggressive in attempting to demonstrate that less acute patients could have been treated at a SNF level of care, payments, on average, could and would have been less than that experienced and, ultimately, published in the report. Why provide SNF payments as the argument? Instead, allow IRFs to treat the full spectrum already available in the burden of care PPS model that currently exists! Allow physicians to direct medical necessity and plans of care that include the intensity of rehabilitation and RN oversight in an IRF, as long as the burden of care acuity is paid for those patients in these lesser utilized lower level CMGs. After all, those patients would have much shorter lengths of stay; and the benefit of being hospitalized for shorter stays brings about an entirely different argument for intense, medically supervised rehabilitation allowances.

As we continue this series of blogs opposing site-neutral payment arguments, we’ll strengthen the points just made, as well as an argument for patient choice when one exists. We’ll discuss the changing medical needs of patients that require access to an IRF level of care, and reducing the fear of hindsight reprisal and take-backs that have led IRF’s toward the limited and higher payment predicaments they now find themselves in.

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