CMS Announces Final IRF Payment Rules for FY 2007
Medicare released its finalized policy changes for the Inpatient Rehabilitation Facilities (IRF) Prospective Payment System (PPS) as well as the durable medical equipment, prosthetics, and supplies (DMEPOS) supplier accreditation yesterday. Both rules took a lot of heat from various parties when they were introduced as drafts earlier this year. Their final versions end up being far less radical than many feared.
The rule provides for an update to IRF payment rates, based on the rehabilitation, psychiatric, and long-term care hospital (RPL) market basket increase of 3.3 percent. In addition, the final rule includes a 2.6 percent reduction in the standard payment amount for FY 2007, to offset the effect of changes in coding that do not reflect real changes in patient acuity. This is less than the 2.9 percent adjustment initially proposed by the administration.
Reimbursement on implantable cardioverter defibrillators (ICDs) and drug-coated heart stents was initially thought to be lowered by up to 30 percent but the cut will in fact not go deeper that 5.4 percent, reports StarTribune. This came as a relief to device makers concerned for their bottom line.
Finally, the final rule addresses certain issues that were raised in the proposed DMEPOS competitive bidding rule published in the May 1, 2006 Federal Register, phasing in competitive bidding. These include, in addition to supplier accreditation, the authority of CMS to enter into contracts with independent entities to implement the competitive bidding program, and plans for competitive bidding education and outreach for both beneficiaries and suppliers. CMS-approved independent accrediting organizations will survey DMEPOS suppliers to measure compliance with new quality standards, which CMS says it will issue in the near future. To dampen the burden on suppliers, the rule asks the accreditation organizations to take into account previous accreditation, Medicare certification, and licensure that would indicate that the quality standards are being met.
The final IRF PPS rule will appear in the August 18 Federal Register and will be effective for IRF discharges occurring on or after October 1, 2006 through September 30, 2007. Rick Pollack, executive vice president of the American Hospital Association was quoted by the Associated Press as saying: “This is a significant regulation and we will review the details in the coming days. While we continue to believe a one-year delay is needed given the rule’s complexity, we are committed to working with CMS to ensure any needed changes are addressed in future years.”
August 2, 2006 Related topics: Legal & legislative, Finance