Monday, April 25, 2011 CMS Outlines New Quality Reporting System for IRFs in Proposed Rule A proposed rule issued Friday by the Centers for Medicare & Medicaid Services (CMS) that would update Medicare payment policies and rates for inpatient rehabilitation facilities (IRFs) in Fiscal Year (FY) 2012 seeks to establish a new quality reporting system authorized by the Patient Protection and Affordable Care Act (PPACA). The rule proposes to increase payment rates under the IRF Prospective Payment System (PPS) by a projected 1.5%—an estimated $120 million nationwide. The projected update reflects a rebased and revised market basket specific to IRFs, inpatient psychiatric facilities, and long-term care hospitals (the RPL market basket)—currently estimated at 2.8% for FY 2012, less a 1.3 percentage point reduction mandated by PPACA. The proposed quality reporting system is aligned with the goals of the Partnership for Patients, a new public-private partnership that aims to help improve the quality, safety, and affordability of health care. Initially, IRFs would submit data on 2 quality measures, “urinary catheter-associated urinary tract infection” and “pressure ulcers that are new or have worsened.” These proposed measures represent 2 of the 9 conditions that the partnership has identified as important places to begin in efforts to reduce harms to patients. IRFs that do not submit quality data would see their payments reduced by 2 percentage points beginning in FY 2014. CMS anticipates adding measures to the reporting system later. Two other proposals in the rule are an update to the case-mix group (CMG) relative weights using FY 2010 IRF claims and FY 2009 IRF cost report data and an increase in the high-cost outlier threshold to $11,822 for FY 2012, compared with $11,410 for FY 2011. The proposed threshold is projected to maintain outlier payments at 3% of total payments under the IRF PPS in FY 2012. CMS will accept comments on the proposed rule until June 21. The agency will address all comments in a final rule to be issued by August 1.