Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2019, 20972-21015 [2018-08961]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 83, Number 89 (Tuesday, May 8, 2018)]
[Proposed Rules]
[Pages 20972-21015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08961]



[[Page 20971]]

Vol. 83

Tuesday,

No. 89

May 8, 2018

Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 412





Medicare Program; Inpatient Rehabilitation Facility Prospective Payment 
System for Federal Fiscal Year 2019; Proposed Rule

Federal Register / Vol. 83 , No. 89 / Tuesday, May 8, 2018 / Proposed 
Rules

[[Page 20972]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1688-P]
RIN 0938-AT25


Medicare Program; Inpatient Rehabilitation Facility Prospective 
Payment System for Federal Fiscal Year 2019

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the prospective payment rates 
for inpatient rehabilitation facilities (IRFs) for federal fiscal year 
(FY) 2019. As required by the Social Security Act (the Act), this 
proposed rule includes the classification and weighting factors for the 
IRF prospective payment system's (PPS) case-mix groups and a 
description of the methodologies and data used in computing the 
prospective payment rates for FY 2019. We are also proposing to 
alleviate administrative burden for IRFs by removing the Functional 
Independence Measure (FIMTM) instrument and associated 
Function Modifiers from the IRF Patient Assessment Instrument (IRF-PAI) 
and revising certain IRF coverage requirements to reduce the amount of 
required paperwork in the IRF setting. In addition, we are soliciting 
comments on removing the face-to-face requirement for rehabilitation 
physician visits and expanding the use of non-physician practitioners 
(that is, nurse practitioners and physician assistants) in meeting the 
IRF coverage requirements. For the IRF Quality Reporting Program (QRP), 
we are proposing to adopt a new measure removal factor, remove two 
measures from the IRF QRP measure set, and codify in our regulations a 
number of requirements.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, not later than 5 p.m. on June 26, 2018.

ADDRESSES: In commenting, please refer to file code CMS-1688-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1688-P, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1688-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    Gwendolyn Johnson, (410) 786-6954, for general information.
    Catie Kraemer, (410) 786-0179, for information about the proposed 
payment policies and payment rates.
    Kadie Derby, (410) 786-0468, for information about the IRF coverage 
policies.
    Christine Grose, (410) 786-1362, for information about the quality 
reporting program.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period as soon as possible 
after they have been received at https://www.regulations.gov. Follow the 
search instructions on that website to view public comments.
    The IRF PPS Addenda along with other supporting documents and 
tables referenced in this proposed rule are available through the 
internet on the CMS website at https://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/.
    To assist readers in referencing sections contained in this 
document, we are providing the following Table of Contents.

Table of Contents

Executive Summary
    A. Purpose
    B. Summary of Major Provisions
    C. Summary of Impacts
    D. Improving Patient Outcomes and Reducing Burden Through 
Meaningful Measures
I. Background
    A. Historical Overview of the IRF PPS
    B. Provisions of the PPACA Affecting the IRF PPS in FY 2012 and 
Beyond
    C. Operational Overview of the Current IRF PPS
    D. Advancing Health Information Exchange
II. Summary of Provisions of the Proposed Rule
III. Proposed Update to the Case-Mix Group (CMG) Relative Weights 
and Average Length of Stay Values for FY 2019
IV. Facility-Level Adjustment Factors
V. Proposed FY 2019 IRF PPS Payment Update
    A. Background
    B. Proposed FY 2019 Market Basket Update and Productivity 
Adjustment
    C. Proposed Labor-Related Share for FY 2019
    D. Proposed Wage Adjustment for FY 2019
    E. Description of the Proposed IRF Standard Payment Conversion 
Factor and Payment Rates for FY 2019
    F. Example of the Methodology for Adjusting the Proposed 
Prospective Payment Rates
VI. Proposed Update to Payments for High-Cost Outliers Under the IRF 
PPS for FY 2019
    A. Proposed Update to the Outlier Threshold Amount for FY 2019
    B. Proposed Update to the IRF Cost-to-Charge Ratio Ceiling and 
Urban/Rural Averages for FY 2019
VII. Proposed Removal of the FIMTM Instrument and 
Associated Function Modifiers From the IRF-PAI Beginning With FY 
2020 and Proposed Refinements to the Case-Mix Classification System 
Beginning With FY 2020
    A. Proposed Removal of the FIMTM Instrument and 
Associated Function Modifiers From the IRF-PAI Beginning With FY 
2020
    B. Proposed Refinements to the Case-Mix Classification System 
Beginning With FY 2020
VIII. Proposed Revisions to Certain IRF Coverage Requirements 
Beginning With FY 2019
    A. Proposed Changes to the Physician Supervision Requirement 
Beginning With FY 2019
    B. Proposed Changes to the Interdisciplinary Team Meeting 
Requirement Beginning With FY 2019
    C. Proposed Changes to the Admission Order Documentation 
Requirement Beginning With FY 2019
    D. Solicitation of Comments Regarding Additional Changes to the 
Physician Supervision Requirement
    E. Solicitation of Comments Regarding Changes to the Use of Non-
Physician Practitioners in Meeting the Requirements Under Sec.  
412.622(a)(3), (4), and (5)
IX. Proposed Revisions and Updates to the IRF Quality Reporting 
Program (QRP)
    A. Background
    B. General Considerations Used for Selection of Measures for the 
IRF QRP

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    C. Proposed New Removal Factor for Previously Adopted IRF QRP 
Measures
    D. Quality Measures Currently Adopted for the FY 2020 IRF QRP
    E. Proposed Removal of Two IRF QRP Measures
    F. IMPACT Act Implementation Update
    G. Form, Manner, and Timing of Data Submission Under the IRF QRP
    H. Proposed Changes to Reconsiderations Requirements Under the 
IRF QRP
    I. Proposed Policies Regarding Public Display of Measure Data 
for the IRF QRP
    J. Method for Applying the Reduction to the FY 2019 IRF Increase 
Factor for IRFs That Fail To Meet the Quality Reporting Requirements
X. Request for Information on Promoting Interoperability and 
Electronic Healthcare Information Exchange Through Possible 
Revisions to the CMS Patient Health and Safety Requirements for 
Hospitals and Other Medicare- and Medicaid-Participating Providers 
and Suppliers
XI. Collection of Information Requirements
    A. Statutory Requirement for Solicitation of Comments
    B. Collection of Information Requirements for Updates Related to 
the IRF PPS
    C. Collection of Information Requirements for Updates Related to 
the IRF QRP
XII. Response to Public Comments
XIII. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impacts
    C. Anticipated Effects
    D. Alternatives Considered
    E. Regulatory Review Costs
    F. Accounting Statement and Table
    G. Conclusion
Regulatory Text

Executive Summary

A. Purpose

    This proposed rule would update the prospective payment rates for 
IRFs for FY 2019 (that is, for discharges occurring on or after October 
1, 2018, and on or before September 30, 2019) as required under section 
1886(j)(3)(C) of the Act. As required by section 1886(j)(5) of the Act, 
this rule includes the classification and weighting factors for the IRF 
PPS's case-mix groups and a description of the methodologies and data 
used in computing the prospective payment rates for FY 2019. In 
addition, this proposed rule would reduce the regulatory burden for 
IRFs by removing data items from the IRF-PAI and revising certain IRF 
coverage and paperwork requirements. In addition, this proposed rule 
solicits comments regarding removing the face-to-face requirement for 
rehabilitation physician visits and expanding the use of non-physician 
practitioners (that is, nurse practitioners and physician assistants) 
in meeting the IRF coverage requirements. We are also proposing to 
update the requirements for the IRF QRP, including adding a new quality 
measure removal factor, removing two measures from the measure set, and 
codifying in our regulations a number of requirements.

B. Summary of Major Provisions

    In this proposed rule, we use the methods described in the FY 2018 
IRF PPS final rule (82 FR 36238) to update the prospective payment 
rates for FY 2019 using updated FY 2017 IRF claims and the most recent 
available IRF cost report data, which is FY 2016 IRF cost report data. 
(Note: In the interest of brevity, the rates previously referred to as 
the ``Federal prospective payment rates'' are now referred to as the 
``prospective payment rates''. No change in meaning is intended.) We 
are also proposing to alleviate administrative burden for IRFs by 
removing the FIMTM instrument and associated Function 
Modifiers from the IRF-PAI and revising certain IRF coverage 
requirements to reduce the amount of required paperwork in the IRF 
setting. In addition, we are soliciting comments on removing the face-
to-face requirement for rehabilitation physician visits and expanding 
the use of non-physician practitioners (that is, nurse practitioners 
and physician assistants) in meeting the IRF coverage requirements. We 
are also proposing to update requirements for the IRF QRP.

C. Summary of Impacts

------------------------------------------------------------------------
       Provision description                      Transfers
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FY 2019 IRF PPS payment rate        The overall economic impact of this
 update.                             proposed rule is an estimated $75
                                     million in increased payments from
                                     the Federal government to IRFs
                                     during FY 2019.
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       Provision description                        Costs
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Removal of FIMTM Items from IRF-    The total reduction in costs in FY
 PAI.                                2020 for IRFs as a result of the
                                     removal of the FIMTM instrument and
                                     associated Function Modifiers from
                                     the IRF-PAI is estimated to be
                                     $10.2 million.
Removal of certain IRF coverage     The total reduction in costs in FY
 requirements.                       2019 for IRFs as a result of the
                                     removal of certain IRF coverage
                                     requirements is estimated to be
                                     $40.5 million.
New IRF QRP requirements..........  The total reduction in costs in FY
                                     2019 for IRFs as a result of the
                                     new quality reporting requirements
                                     is estimated to be $2.4 million.
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D. Improving Patient Outcomes and Reducing Burden Through Meaningful 
Measures

    Regulatory reform and reducing regulatory burden are high 
priorities for CMS. To reduce the regulatory burden on the healthcare 
industry, lower health care costs, and enhance patient care, in October 
2017, we launched the Meaningful Measures Initiative.\1\ This 
initiative is one component of our agency-wide Patients Over Paperwork 
Initiative,\2\ which is aimed at evaluating and streamlining 
regulations with a goal to reduce unnecessary cost and burden, increase 
efficiencies, and improve beneficiary experience. The Meaningful 
Measures Initiative is aimed at identifying the highest priority areas 
for quality measurement and quality improvement in order to assess the 
core quality of care issues that are most vital to advancing our work 
to improve patient outcomes. The Meaningful Measures Initiative 
represents a new approach to quality measures that fosters operational 
efficiencies, and will reduce costs, including collection and reporting 
burden while producing quality measurement that is more focused on 
meaningful outcomes.
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    \1\ Meaningful Measures web page: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
    \2\ See Remarks by Administrator Seema Verma at the Health Care 
Payment Learning and Action Network (LAN) Fall Summit, as prepared 
for delivery on October 30, 2017 https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-30.html.
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    The Meaningful Measures Framework has the following objectives:
     Address high-impact measure areas that safeguard public 
health;
     Patient-centered and meaningful to patients;
     Outcome-based where possible;
     Fulfill each program's statutory requirements;
     Minimize the level of burden for health care providers 
(for example,

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through a preference for EHR-based measures where possible, such as 
electronic clinical quality measures);
     Significant opportunity for improvement;
     Address measure needs for population based payment through 
alternative payment models; and
     Align across programs and/or with other payers.
    In order to achieve these objectives, we have identified 19 
Meaningful Measures areas and mapped them to six overarching quality 
priorities as shown in the Table 1:

    Table 1--Meaningful Measures Framework Domains and Measure Areas
------------------------------------------------------------------------
            Quality priority                 Meaningful measure area
------------------------------------------------------------------------
Making Care Safer by Reducing Harm       Healthcare-Associated
 Caused in the Delivery of Care.          Infections.
                                         Preventable Healthcare Harm.
Strengthen Person and Family Engagement  Care is Personalized and
 as Partners in Their Care.               Aligned with Patient's Goals.
                                         End of Life Care according to
                                          Preferences.
                                         Patient's Experience of Care.
                                         Patient Reported Functional
                                          Outcomes.
Promote Effective Communication and      Medication Management.
 Coordination of Care.                   Admissions and Readmissions to
                                          Hospitals.
                                         Transfer of Health Information
                                          and Interoperability.
Promote Effective Prevention and         Preventive Care.
 Treatment of Chronic Disease.           Management of Chronic
                                          Conditions.
                                         Prevention, Treatment, and
                                          Management of Mental Health.
                                         Prevention and Treatment of
                                          Opioid and Substance Use
                                          Disorders.
                                         Risk Adjusted Mortality.
Work with Communities to Promote Best    Equity of Care.
 Practices of Healthy Living.            Community Engagement.
Make Care Affordable...................  Appropriate Use of Healthcare.
                                         Patient-focused Episode of
                                          Care.
                                         Risk Adjusted Total Cost of
                                          Care.
------------------------------------------------------------------------

    By including Meaningful Measures in our programs, we believe that 
we can also address the following cross-cutting measure criteria:
     Eliminating disparities;
     Tracking measurable outcomes and impact;
     Safeguarding public health;
     Achieving cost savings;
     Improving access for rural communities; and
     Reducing burden.
    We believe that the Meaningful Measures Initiative will improve 
outcomes for patients, their families, and health care providers while 
reducing burden and costs for clinicians and providers as well as 
promoting operational efficiencies.

I. Background

A. Historical Overview of the IRF PPS

    Section 1886(j) of the Act provides for the implementation of a 
per-discharge prospective payment system (PPS) for inpatient 
rehabilitation hospitals and inpatient rehabilitation units of a 
hospital (collectively, hereinafter referred to as IRFs). Payments 
under the IRF PPS encompass inpatient operating and capital costs of 
furnishing covered rehabilitation services (that is, routine, 
ancillary, and capital costs), but not direct graduate medical 
education costs, costs of approved nursing and allied health education 
activities, bad debts, and other services or items outside the scope of 
the IRF PPS. Although a complete discussion of the IRF PPS provisions 
appears in the original FY 2002 IRF PPS final rule (66 FR 41316) and 
the FY 2006 IRF PPS final rule (70 FR 47880), we are providing a 
general description of the IRF PPS for FYs 2002 through 2018.
    Under the IRF PPS from FY 2002 through FY 2005, the prospective 
payment rates were computed across 100 distinct case-mix groups (CMGs), 
as described in the FY 2002 IRF PPS final rule (66 FR 41316). We 
constructed 95 CMGs using rehabilitation impairment categories (RICs), 
functional status (both motor and cognitive), and age (in some cases, 
cognitive status and age may not be a factor in defining a CMG). In 
addition, we constructed five special CMGs to account for very short 
stays and for patients who expire in the IRF.
    For each of the CMGs, we developed relative weighting factors to 
account for a patient's clinical characteristics and expected resource 
needs. Thus, the weighting factors accounted for the relative 
difference in resource use across all CMGs. Within each CMG, we created 
tiers based on the estimated effects that certain comorbidities would 
have on resource use.
    We established the federal PPS rates using a standardized payment 
conversion factor (formerly referred to as the budget-neutral 
conversion factor). For a detailed discussion of the budget-neutral 
conversion factor, please refer to our FY 2004 IRF PPS final rule (68 
FR 45684 through 45685). In the FY 2006 IRF PPS final rule (70 FR 
47880), we discussed in detail the methodology for determining the 
standard payment conversion factor.
    We applied the relative weighting factors to the standard payment 
conversion factor to compute the unadjusted prospective payment rates 
under the IRF PPS from FYs 2002 through 2005. Within the structure of 
the payment system, we then made adjustments to account for interrupted 
stays, transfers, short stays, and deaths. Finally, we applied the 
applicable adjustments to account for geographic variations in wages 
(wage index), the percentage of low-income patients, location in a 
rural area (if applicable), and outlier payments (if applicable) to the 
IRFs' unadjusted prospective payment rates.
    For cost reporting periods that began on or after January 1, 2002, 
and before October 1, 2002, we determined the final prospective payment 
amounts using the transition methodology prescribed in section 
1886(j)(1) of the Act. Under this provision, IRFs transitioning into 
the PPS were paid a blend of the federal IRF PPS rate and the payment 
that the IRFs would have received had the IRF PPS not been implemented. 
This provision also allowed IRFs to elect to bypass this blended 
payment and immediately be paid 100 percent of the federal IRF PPS 
rate. The transition methodology expired as of cost reporting periods 
beginning on or after October 1, 2002 (FY 2003), and payments for all 
IRFs

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now consist of 100 percent of the federal IRF PPS rate.
    We established a CMS website as a primary information resource for 
the IRF PPS which is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/. The website 
may be accessed to download or view publications, software, data 
specifications, educational materials, and other information pertinent 
to the IRF PPS.
    Section 1886(j) of the Act confers broad statutory authority upon 
the Secretary to propose refinements to the IRF PPS. In the FY 2006 IRF 
PPS final rule (70 FR 47880) and in correcting amendments to the FY 
2006 IRF PPS final rule (70 FR 57166) that we published on September 
30, 2005, we finalized a number of refinements to the IRF PPS case-mix 
classification system (the CMGs and the corresponding relative weights) 
and the case-level and facility-level adjustments. These refinements 
included the adoption of the Office of Management and Budget's (OMB) 
Core-Based Statistical Area (CBSA) market definitions, modifications to 
the CMGs, tier comorbidities, and CMG relative weights, implementation 
of a new teaching status adjustment for IRFs, revision and rebasing of 
the market basket index used to update IRF payments, and updates to the 
rural, low-income percentage (LIP), and high-cost outlier adjustments. 
Beginning with the FY 2006 IRF PPS final rule (70 FR 47908 through 
47917), the market basket index used to update IRF payments was a 
market basket reflecting the operating and capital cost structures for 
freestanding IRFs, freestanding inpatient psychiatric facilities 
(IPFs), and long-term care hospitals (LTCHs) (hereinafter referred to 
as the rehabilitation, psychiatric, and long-term care (RPL) market 
basket). Any reference to the FY 2006 IRF PPS final rule in this 
proposed rule also includes the provisions effective in the correcting 
amendments. For a detailed discussion of the final key policy changes 
for FY 2006, please refer to the FY 2006 IRF PPS final rule (70 FR 
47880 and 70 FR 57166).
    In the FY 2007 IRF PPS final rule (71 FR 48354), we further refined 
the IRF PPS case-mix classification system (the CMG relative weights) 
and the case-level adjustments, to ensure that IRF PPS payments would 
continue to reflect as accurately as possible the costs of care. For a 
detailed discussion of the FY 2007 policy revisions, please refer to 
the FY 2007 IRF PPS final rule (71 FR 48354).
    In the FY 2008 IRF PPS final rule (72 FR 44284), we updated the 
prospective payment rates and the outlier threshold, revised the IRF 
wage index policy, and clarified how we determine high-cost outlier 
payments for transfer cases. For more information on the policy changes 
implemented for FY 2008, please refer to the FY 2008 IRF PPS final rule 
(72 FR 44284), in which we published the final FY 2008 IRF prospective 
payment rates.
    After publication of the FY 2008 IRF PPS final rule (72 FR 44284), 
section 115 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 
(Pub. L. 110-173, enacted on December 29, 2007) (MMSEA) amended section 
1886(j)(3)(C) of the Act to apply a zero percent increase factor for 
FYs 2008 and 2009, effective for IRF discharges occurring on or after 
April 1, 2008. Section 1886(j)(3)(C) of the Act required the Secretary 
to develop an increase factor to update the IRF prospective payment 
rates for each FY. Based on the legislative change to the increase 
factor, we revised the FY 2008 prospective payment rates for IRF 
discharges occurring on or after April 1, 2008. Thus, the final FY 2008 
IRF prospective payment rates that were published in the FY 2008 IRF 
PPS final rule (72 FR 44284) were effective for discharges occurring on 
or after October 1, 2007, and on or before March 31, 2008, and the 
revised FY 2008 IRF prospective payment rates were effective for 
discharges occurring on or after April 1, 2008, and on or before 
September 30, 2008. The revised FY 2008 prospective payment rates are 
available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html.
    In the FY 2009 IRF PPS final rule (73 FR 46370), we updated the CMG 
relative weights, the average length of stay values, and the outlier 
threshold; clarified IRF wage index policies regarding the treatment of 
``New England deemed'' counties and multi-campus hospitals; and revised 
the regulation text in response to section 115 of the MMSEA to set the 
IRF compliance percentage at 60 percent (the ``60 percent rule'') and 
continue the practice of including comorbidities in the calculation of 
compliance percentages. We also applied a zero percent market basket 
increase factor for FY 2009 in accordance with section 115 of the 
MMSEA. For more information on the policy changes implemented for FY 
2009, please refer to the FY 2009 IRF PPS final rule (73 FR 46370), in 
which we published the final FY 2009 IRF prospective payment rates.
    In the FY 2010 IRF PPS final rule (74 FR 39762) and in correcting 
amendments to the FY 2010 IRF PPS final rule (74 FR 50712) that we 
published on October 1, 2009, we updated the prospective payment rates, 
the CMG relative weights, the average length of stay values, the rural, 
LIP, teaching status adjustment factors, and the outlier threshold; 
implemented new IRF coverage requirements for determining whether an 
IRF claim is reasonable and necessary; and revised the regulation text 
to require IRFs to submit patient assessments on Medicare Advantage 
(MA) (formerly called Medicare Part C) patients for use in the 60 
percent rule calculations. Any reference to the FY 2010 IRF PPS final 
rule in this proposed rule also includes the provisions effective in 
the correcting amendments. For more information on the policy changes 
implemented for FY 2010, please refer to the FY 2010 IRF PPS final rule 
(74 FR 39762 and 74 FR 50712), in which we published the final FY 2010 
IRF prospective payment rates.
    After publication of the FY 2010 IRF PPS final rule (74 FR 39762), 
section 3401(d) of the Patient Protection and Affordable Care Act (Pub. 
L. 111-148, enacted on March 23, 2010), as amended by section 10319 of 
the same Act and by section 1105 of the Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March 30, 2010) 
(collectively, hereinafter referred to as ``PPACA''), amended section 
1886(j)(3)(C) of the Act and added section 1886(j)(3)(D) of the Act. 
Section 1886(j)(3)(C) of the Act requires the Secretary to estimate a 
multifactor productivity (MFP) adjustment to the market basket increase 
factor, and to apply other adjustments as defined by the Act. The 
productivity adjustment applies to FYs from 2012 forward. The other 
adjustments apply to FYs 2010 to 2019.
    Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act 
defined the adjustments that were to be applied to the market basket 
increase factors in FYs 2010 and 2011. Under these provisions, the 
Secretary was required to reduce the market basket increase factor in 
FY 2010 by a 0.25 percentage point adjustment. Notwithstanding this 
provision, in accordance with section 3401(p) of the PPACA, the 
adjusted FY 2010 rate was only to be applied to discharges occurring on 
or after April 1, 2010. Based on the self-implementing legislative 
changes to section 1886(j)(3) of the Act, we adjusted the FY 2010 
federal prospective payment rates as required, and applied these rates 
to IRF discharges occurring on or after April 1, 2010, and on or before 
September 30,

[[Page 20976]]

2010. Thus, the final FY 2010 IRF prospective payment rates that were 
published in the FY 2010 IRF PPS final rule (74 FR 39762) were used for 
discharges occurring on or after October 1, 2009, and on or before 
March 31, 2010, and the adjusted FY 2010 IRF prospective payment rates 
applied to discharges occurring on or after April 1, 2010, and on or 
before September 30, 2010. The adjusted FY 2010 prospective payment 
rates are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html.
    In addition, sections 1886(j)(3)(C) and (D) of the Act also 
affected the FY 2010 IRF outlier threshold amount because they required 
an adjustment to the FY 2010 RPL market basket increase factor, which 
changed the standard payment conversion factor for FY 2010. 
Specifically, the original FY 2010 IRF outlier threshold amount was 
determined based on the original estimated FY 2010 RPL market basket 
increase factor of 2.5 percent and the standard payment conversion 
factor of $13,661. However, as adjusted, the IRF prospective payments 
are based on the adjusted RPL market basket increase factor of 2.25 
percent and the revised standard payment conversion factor of $13,627. 
To maintain estimated outlier payments for FY 2010 equal to the 
established standard of 3 percent of total estimated IRF PPS payments 
for FY 2010, we revised the IRF outlier threshold amount for FY 2010 
for discharges occurring on or after April 1, 2010, and on or before 
September 30, 2010. The revised IRF outlier threshold amount for FY 
2010 was $10,721.
    Sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(i) of the Act also 
required the Secretary to reduce the market basket increase factor in 
FY 2011 by a 0.25 percentage point adjustment. The FY 2011 IRF PPS 
notice (75 FR 42836) and the correcting amendments to the FY 2011 IRF 
PPS notice (75 FR 70013) described the required adjustments to the FY 
2010 and FY 2011 IRF PPS prospective payment rates and outlier 
threshold amount for IRF discharges occurring on or after April 1, 
2010, and on or before September 30, 2011. It also updated the FY 2011 
prospective payment rates, the CMG relative weights, and the average 
length of stay values. Any reference to the FY 2011 IRF PPS notice in 
this proposed rule also includes the provisions effective in the 
correcting amendments. For more information on the FY 2010 and FY 2011 
adjustments or the updates for FY 2011, please refer to the FY 2011 IRF 
PPS notice (75 FR 42836 and 75 FR 70013).
    In the FY 2012 IRF PPS final rule (76 FR 47836), we updated the IRF 
prospective payment rates, rebased and revised the RPL market basket, 
and established a new quality reporting program (QRP) for IRFs in 
accordance with section 1886(j)(7) of the Act. We also consolidated, 
clarified, and revised existing policies regarding IRF hospitals and 
IRF units of hospitals to eliminate unnecessary confusion and enhance 
consistency. For more information on the policy changes implemented for 
FY 2012, please refer to the FY 2012 IRF PPS final rule (76 FR 47836), 
in which we published the final FY 2012 IRF prospective payment rates.
    The FY 2013 IRF PPS notice (77 FR 44618) described the required 
adjustments to the FY 2013 prospective payment rates and outlier 
threshold amount for IRF discharges occurring on or after October 1, 
2012, and on or before September 30, 2013. It also updated the FY 2013 
prospective payment rates, the CMG relative weights, and the average 
length of stay values. For more information on the updates for FY 2013, 
please refer to the FY 2013 IRF PPS notice (77 FR 44618).
    In the FY 2014 IRF PPS final rule (78 FR 47860), we updated the 
prospective payment rates, the CMG relative weights, and the outlier 
threshold amount. We also updated the facility-level adjustment factors 
using an enhanced estimation methodology, revised the list of diagnosis 
codes that count toward an IRF's 60 percent rule compliance calculation 
to determine ``presumptive compliance,'' revised sections of the 
inpatient rehabilitation facility patient assessment instrument (IRF-
PAI), revised requirements for acute care hospitals that have IRF 
units, clarified the IRF regulation text regarding limitation of 
review, updated references to previously changed sections in the 
regulations text, and updated requirements for the IRF QRP. For more 
information on the policy changes implemented for FY 2014, please refer 
to the FY 2014 IRF PPS final rule (78 FR 47860), in which we published 
the final FY 2014 IRF prospective payment rates.
    In the FY 2015 IRF PPS final rule (79 FR 45872), we updated the 
prospective payment rates, the CMG relative weights, and the outlier 
threshold amount. We also revised the list of diagnosis codes that 
count toward an IRF's 60 percent rule compliance calculation to 
determine ``presumptive compliance,'' revised sections of the IRF-PAI, 
and updated requirements for the IRF QRP. For more information on the 
policy changes implemented for FY 2015, please refer to the FY 2015 IRF 
PPS final rule (79 FR 45872) and the FY 2015 IRF PPS correction notice 
(79 FR 59121).
    In the FY 2016 IRF PPS final rule (80 FR 47036), we updated the 
prospective payment rates, the CMG relative weights, and the outlier 
threshold amount. We also adopted an IRF-specific market basket that 
reflects the cost structures of only IRF providers, a blended 1-year 
transition wage index based on the adoption of new OMB area 
delineations, a 3-year phase-out of the rural adjustment for certain 
IRFs due to the new OMB area delineations, and updates for the IRF QRP. 
For more information on the policy changes implemented for FY 2016, 
please refer to the FY 2016 IRF PPS final rule (80 FR 47036).
    In the FY 2017 IRF PPS final rule (81 FR 52056), we updated the 
prospective payment rates, the CMG relative weights, and the outlier 
threshold amount. We also updated requirements for the IRF QRP. For 
more information on the policy changes implemented for FY 2017, please 
refer to the FY 2017 IRF PPS final rule (81 FR 52056) and the FY 2017 
IRF PPS correction notice (81 FR 59901).
    In the FY 2018 IRF PPS final rule (82 FR 36238), we updated the 
prospective payment rates, the CMG relative weights, and the outlier 
threshold amount. We also revised the International Classification of 
Diseases, 10th Revision, Clinical Modification (ICD-10-CM) diagnosis 
codes that are used to determine presumptive compliance under the ``60 
percent rule,'' removed the 25 percent payment penalty for IRF-PAI late 
transmissions, removed the voluntary swallowing status item (Item 27) 
from the IRF-PAI, summarized comments regarding the criteria used to 
classify facilities for payment under the IRF PPS, provided for a 
subregulatory process for certain annual updates to the presumptive 
methodology diagnosis code lists, adopted the use of height/weight 
items on the IRF-PAI to determine patient body mass index (BMI) greater 
than 50 for cases of single-joint replacement under the presumptive 
methodology, and updated requirements for the IRF QRP. For more 
information on the policy changes implemented for FY 2018, please refer 
to the FY 2018 IRF PPS final rule (82 FR 36238).

B. Provisions of the PPACA Affecting the IRF PPS in FY 2012 and Beyond

    The PPACA included several provisions that affect the IRF PPS in 
FYs 2012 and beyond. In addition to what

[[Page 20977]]

was previously discussed, section 3401(d) of the PPACA also added 
section 1886(j)(3)(C)(ii)(I) of the Act (providing for a ``productivity 
adjustment'' for fiscal year 2012 and each subsequent fiscal year). The 
productivity adjustment for FY 2019 is discussed in section V.B. of 
this proposed rule. Section 3401(d) of the PPACA requires an additional 
0.75 percentage point adjustment to the IRF increase factor for each of 
FYs 2017, 2018, and 2019. The applicable adjustment for FY 2019 is 
discussed in section V.B. of this proposed rule. Section 
1886(j)(3)(C)(ii)(II) of the Act provides that the application of these 
adjustments to the market basket update may result in an update that is 
less than 0.0 for a fiscal year and in payment rates for a fiscal year 
being less than such payment rates for the preceding fiscal year.
    Sections 3004(b) of the PPACA and section 411(b) of the Medicare 
Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10, enacted on 
April 16, 2015) (MACRA) also addressed the IRF PPS. Section 3004(b) of 
PPACA reassigned the previously designated section 1886(j)(7) of the 
Act to section 1886(j)(8) and inserted a new section 1886(j)(7), which 
contains requirements for the Secretary to establish a QRP for IRFs. 
Under that program, data must be submitted in a form and manner and at 
a time specified by the Secretary. Section 411(b) of MACRA amended 
section 1886(j)(3)(C) of the Act by adding clause (iii), which required 
us to apply for FY 2018, after the application of section 
1886(j)(3)(C)(ii) of the Act, an increase factor of 1.0 percent to 
update the IRF prospective payment rates. Beginning in FY 2014, section 
1886(j)(7)(A)(i) of the Act requires the application of a 2 percentage 
point reduction to the market basket increase factor otherwise 
applicable to an IRF (after application of subparagraphs (C)(iii) and 
(D) of section 1886(j)(3) of the Act) for a fiscal year if the IRF does 
not comply with the requirements of the IRF QRP for that fiscal year. 
Application of the 2 percentage point reduction may result in an update 
that is less than 0.0 for a fiscal year and in payment rates for a 
fiscal year being less than such payment rates for the preceding fiscal 
year. Reporting-based reductions to the market basket increase factor 
are not cumulative; they only apply for the FY involved.

C. Operational Overview of the Current IRF PPS

    As described in the FY 2002 IRF PPS final rule (66 FR 41316), upon 
the admission and discharge of a Medicare Part A Fee-for-Service (FFS) 
patient, the IRF is required to complete the appropriate sections of a 
patient assessment instrument (PAI), designated as the IRF-PAI. In 
addition, beginning with IRF discharges occurring on or after October 
1, 2009, the IRF is also required to complete the appropriate sections 
of the IRF-PAI upon the admission and discharge of each Medicare 
Advantage (MA) patient, as described in the FY 2010 IRF PPS final rule 
(74 FR 39762 and 74 FR 50712). All required data must be electronically 
encoded into the IRF-PAI software product. Generally, the software 
product includes patient classification programming called the Grouper 
software. The Grouper software uses specific IRF-PAI data elements to 
classify (or group) patients into distinct CMGs and account for the 
existence of any relevant comorbidities.
    The Grouper software produces a five-character CMG number. The 
first character is an alphabetic character that indicates the 
comorbidity tier. The last four characters are numeric characters that 
represent the distinct CMG number. Free downloads of the Inpatient 
Rehabilitation Validation and Entry (IRVEN) software product, including 
the Grouper software, are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Software.html.
    Once a Medicare Part A FFS patient is discharged, the IRF submits a 
Medicare claim as a Health Insurance Portability and Accountability Act 
of 1996 (Pub. L. 104-191, enacted on August 21, 1996) (HIPAA) compliant 
electronic claim or, if the Administrative Simplification Compliance 
Act of 2002 (Pub. L. 107-105, enacted on December 27, 2002) (ASCA) 
permits, a paper claim (a UB-04 or a CMS-1450 as appropriate) using the 
five-character CMG number and sends it to the appropriate Medicare 
Administrative Contractor (MAC). In addition, once a MA patient is 
discharged, in accordance with the Medicare Claims Processing Manual, 
chapter 3, section 20.3 (Pub. L. 100-04), hospitals (including IRFs) 
must submit an informational-only bill (Type of Bill (TOB) 111), which 
includes Condition Code 04 to their MAC. This will ensure that the MA 
days are included in the hospital's Supplemental Security Income (SSI) 
ratio (used in calculating the IRF LIP adjustment) for fiscal year 2007 
and beyond. Claims submitted to Medicare must comply with both ASCA and 
HIPAA.
    Section 3 of the ASCA amended section 1862(a) of the Act by adding 
paragraph (22), which requires the Medicare program, subject to section 
1862(h) of the Act, to deny payment under Part A or Part B for any 
expenses for items or services for which a claim is submitted other 
than in an electronic form specified by the Secretary. Section 1862(h) 
of the Act, in turn, provides that the Secretary shall waive such 
denial in situations in which there is no method available for the 
submission of claims in an electronic form or the entity submitting the 
claim is a small provider. In addition, the Secretary also has the 
authority to waive such denial in such unusual cases as the Secretary 
finds appropriate. For more information, see the ``Medicare Program; 
Electronic Submission of Medicare Claims'' final rule (70 FR 71008). 
Our instructions for the limited number of Medicare claims submitted on 
paper are available at https://www.cms.gov/manuals/downloads/clm104c25.pdf.
    Section 3 of the ASCA operates in the context of the administrative 
simplification provisions of HIPAA, which include, among others, the 
requirements for transaction standards and code sets codified in 45 
CFR, parts 160 and 162, subparts A and I through R (generally known as 
the Transactions Rule). The Transactions Rule requires covered 
entities, including covered health care providers, to conduct covered 
electronic transactions according to the applicable transaction 
standards. (See the CMS program claim memoranda at https://www.cms.gov/ElectronicBillingEDITrans/ and listed in the addenda to the Medicare 
Intermediary Manual, Part 3, section 3600).
    The MAC processes the claim through its software system. This 
software system includes pricing programming called the ``Pricer'' 
software. The Pricer software uses the CMG number, along with other 
specific claim data elements and provider-specific data, to adjust the 
IRF's prospective payment for interrupted stays, transfers, short 
stays, and deaths, and then applies the applicable adjustments to 
account for the IRF's wage index, percentage of low-income patients, 
rural location, and outlier payments. For discharges occurring on or 
after October 1, 2005, the IRF PPS payment also reflects the teaching 
status adjustment that became effective as of FY 2006, as discussed in 
the FY 2006 IRF PPS final rule (70 FR 47880).

D. Advancing Health Information Exchange

    The Department of Health and Human Services (HHS) has a number of 
initiatives designed to encourage and

[[Page 20978]]

support the adoption of interoperable health information technology and 
to promote nationwide health information exchange to improve health 
care. The Office of the National Coordinator for Health Information 
Technology (ONC) and CMS work collaboratively to advance 
interoperability across settings of care, including post-acute care.
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(Pub. L. 113-185) (IMPACT Act) requires assessment data to be 
standardized and interoperable to allow for exchange of the data among 
post-acute providers and other providers. To further interoperability 
in post-acute care, CMS is developing a Data Element Library to serve 
as a publically available centralized, authoritative resource for 
standardized data elements and their associated mappings to health IT 
standards. These interoperable data elements can reduce provider burden 
by supporting the use and reuse of healthcare data, support provider 
exchange of electronic health information for care coordination, 
person-centered care, and support real-time, data driven, clinical 
decision making. Once available, standards in the Data Element Library 
can be referenced on the CMS website and in the ONC Interoperability 
Standards Advisory (ISA). The 2018 Interoperability Standards Advisory 
(ISA) is available at: https://www.healthit.gov/isa/.
    Most recently, the 21st Century Cures Act (Pub. L. 114-255), 
enacted in 2016, requires HHS to take new steps to enable the 
electronic sharing of health information ensuring interoperability for 
providers and settings across the care continuum. Specifically, 
Congress directed ONC to ``develop or support a trusted exchange 
framework, including a common agreement among health information 
networks nationally.'' This framework (https://beta.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement) 
outlines a common set of principles for trusted exchange and minimum 
terms and conditions for trusted exchange in order to enable 
interoperability across disparate health information networks. In 
another important provision, Congress defined ``information blocking'' 
as practices likely to interfere with, prevent, or materially 
discourage access, exchange, or use of electronic health information, 
and established new authority for HHS to discourage these practices. We 
invite providers to learn more about these important developments and 
how they are likely to affect IRFs.

II. Summary of Provisions of the Proposed Rule

    In this rule, we propose to update the IRF prospective payment 
rates for FY 2019 and to alleviate administrative burden for IRFs by 
removing the FIMTM instrument and associated Function 
Modifiers from the IRF-PAI in accordance with section 1886(j)(2)(D) of 
the Act and revising certain IRF coverage requirements to reduce the 
amount of required paperwork in the IRF setting. In addition, we are 
soliciting comments on removing the face-to-face requirement for 
rehabilitation physician visits and expanding the use of non-physician 
practitioners (that is, nurse practitioners and physician assistants) 
in meeting the IRF coverage requirements. For the IRF QRP, we are 
proposing to add a new quality measure removal factor, remove two 
quality measures from the measure set, and codify in our regulations a 
number of requirements.
    The proposed updates to the IRF prospective payment rates for FY 
2019 are as follows:
     Update the IRF PPS relative weights and average length of 
stay values for FY 2019 using the most current and complete Medicare 
claims and cost report data in a budget-neutral manner, as discussed in 
section III. of this proposed rule.
     Describe the continued use of FY 2014 facility-level 
adjustment factors, as discussed in section IV. of this proposed rule.
     Update the IRF PPS payment rates for FY 2019 by the 
proposed market basket increase factor, based upon the most current 
data available, with a 0.75 percentage point reduction as required by 
sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act and a 
proposed productivity adjustment required by section 
1886(j)(3)(C)(ii)(I) of the Act, as described in section V. of this 
proposed rule.
     Update the FY 2019 IRF PPS payment rates by the FY 2019 
wage index and the labor-related share in a budget-neutral manner, as 
discussed in section V. of this proposed rule.
     Describe the calculation of the IRF standard payment 
conversion factor for FY 2019, as discussed in section V. of this 
proposed rule.
     Update the outlier threshold amount for FY 2019, as 
discussed in section VI. of this proposed rule.
     Update the cost-to-charge ratio (CCR) ceiling and urban/
rural average CCRs for FY 2019, as discussed in section VI. of this 
proposed rule.
     Remove the FIM TM instrument and associated 
Function Modifiers from the IRF-PAI beginning with FY 2020 to reduce 
administrative burden for IRFs, as discussed in section VII. of this 
proposed rule.
     Revise certain IRF coverage requirements to reduce 
administrative burden for IRFs beginning with FY 2019, as discussed in 
section VIII. of this proposed rule.
     Solicit comments on removing the face-to-face requirement 
for rehabilitation physician visits, as discussed in section VIII. of 
this proposed rule.
     Solicit comments on expanding the use of non-physician 
practitioners (that is, nurse practitioners and physician assistants) 
in meeting the IRF coverage requirements, as discussed in section VIII. 
of this proposed rule.
     Update the requirements for the IRF QRP, as discussed in 
section IX. of this proposed rule.

III. Proposed Update to the Case-Mix Group (CMG) Relative Weights and 
Average Length of Stay Values for FY 2019

    As specified in Sec.  412.620(b)(1), we calculate a relative weight 
for each CMG that is proportional to the resources needed by an average 
inpatient rehabilitation case in that CMG. For example, cases in a CMG 
with a relative weight of 2, on average, will cost twice as much as 
cases in a CMG with a relative weight of 1. Relative weights account 
for the variance in cost per discharge due to the variance in resource 
utilization among the payment groups, and their use helps to ensure 
that IRF PPS payments support beneficiary access to care, as well as 
provider efficiency.
    In this proposed rule, we propose to update the CMG relative 
weights and average length of stay values for FY 2019. As required by 
statute, we always use the most recent available data to update the CMG 
relative weights and average lengths of stay. For FY 2019, we propose 
to use the FY 2017 IRF claims and FY 2016 IRF cost report data. These 
data are the most current and complete data available at this time. 
Currently, only a small portion of the FY 2017 IRF cost report data are 
available for analysis, but the majority of the FY 2017 IRF claims data 
are available for analysis.
    In this rule, we propose to apply these data using the same 
methodologies that we have used to update the CMG relative weights and 
average length of stay values each fiscal year since we implemented an 
update to the methodology to use the more detailed CCR data from the 
cost reports of IRF subprovider units of primary acute care

[[Page 20979]]

hospitals, instead of CCR data from the associated primary care 
hospitals, to calculate IRFs' average costs per case, as discussed in 
the FY 2009 IRF PPS final rule (73 FR 46372). In calculating the CMG 
relative weights, we use a hospital-specific relative value method to 
estimate operating (routine and ancillary services) and capital costs 
of IRFs. The process used to calculate the CMG relative weights for 
this proposed rule is as follows:
    Step 1. We estimate the effects that comorbidities have on costs.
    Step 2. We adjust the cost of each Medicare discharge (case) to 
reflect the effects found in the first step.
    Step 3. We use the adjusted costs from the second step to calculate 
CMG relative weights, using the hospital-specific relative value 
method.
    Step 4. We normalize the FY 2019 CMG relative weights to the same 
average CMG relative weight from the CMG relative weights implemented 
in the FY 2018 IRF PPS final rule (82 FR 36238).
    Consistent with the methodology that we have used to update the IRF 
classification system in each instance in the past, we propose to 
update the CMG relative weights for FY 2019 in such a way that total 
estimated aggregate payments to IRFs for FY 2019 are the same with or 
without the changes (that is, in a budget-neutral manner) by applying a 
budget neutrality factor to the standard payment amount. To calculate 
the appropriate budget neutrality factor for use in updating the FY 
2019 CMG relative weights, we use the following steps:
    Step 1. Calculate the estimated total amount of IRF PPS payments 
for FY 2019 (with no changes to the CMG relative weights).
    Step 2. Calculate the estimated total amount of IRF PPS payments 
for FY 2019 by applying the changes to the CMG relative weights (as 
discussed in this proposed rule).
    Step 3. Divide the amount calculated in step 1 by the amount 
calculated in step 2 to determine the budget neutrality factor (0.9980) 
that would maintain the same total estimated aggregate payments in FY 
2019 with and without the changes to the CMG relative weights.
    Step 4. Apply the budget neutrality factor (0.9980) to the FY 2018 
IRF PPS standard payment amount after the application of the budget-
neutral wage adjustment factor.
    In section V.E. of this proposed rule, we discuss the proposed use 
of the existing methodology to calculate the standard payment 
conversion factor for FY 2019.
    In Table 2, ``Proposed Relative Weights and Average Length of Stay 
Values for Case-Mix Groups,'' we present the proposed CMGs, the 
comorbidity tiers, the corresponding relative weights, and the average 
length of stay values for each CMG and tier for FY 2019. The average 
length of stay for each CMG is used to determine when an IRF discharge 
meets the definition of a short-stay transfer, which results in a per 
diem case level adjustment.

                                Table 2--Proposed Relative Weights and Average Length of Stay Values for Case-Mix Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Relative weight                               Average length of stay
                                                       -------------------------------------------------------------------------------------------------
          CMG              CMG Description  (M=motor,                                          No                                               No
                              C=cognitive, A=age)         Tier 1     Tier 2     Tier 3    comorbidities    Tier 1     Tier 2     Tier 3    comorbidities
                                                                                              tier                                             tier
--------------------------------------------------------------------------------------------------------------------------------------------------------
0101...................  Stroke M>51.05...............     0.8486     0.7367     0.6761          0.6461          8         11          8               8
0102...................  Stroke M>44.45 and M<51.05        1.0722     0.9308     0.8542          0.8164         11         12         10              10
                          and C>18.5.
0103...................  Stroke M>44.45 and M<51.05        1.2409     1.0772     0.9886          0.9448         12         13         11              12
                          and C<18.5.
0104...................  Stroke M>38.85 and M<44.45...     1.2952     1.1244     1.0319          0.9862         12         13         12              12
0105...................  Stroke M>34.25 and M<38.85...     1.4885     1.2922     1.1859          1.1333         14         14         14              13
0106...................  Stroke M>30.05 and M<34.25...     1.6651     1.4455     1.3266          1.2678         16         16         15              15
0107...................  Stroke M>26.15 and M<30.05...     1.8665     1.6203     1.4871          1.4211         18         18         16              16
0108...................  Stroke M<26.15 and A>84.5....     2.3075     2.0031     1.8384          1.7569         22         21         20              20
0109...................  Stroke M>22.35 and M<26.15        2.0873     1.8120     1.6630          1.5893         19         19         18              18
                          and A<84.5.
0110...................  Stroke M<22.35 and A<84.5....     2.7646     2.4000     2.2027          2.1049         26         26         23              23
0201...................  Traumatic brain injury            0.8228     0.6676     0.5960          0.5565          9          9          8               7
                          M>53.35 and C>23.5.
0202...................  Traumatic brain injury            1.1423     0.9270     0.8274          0.7726         10         11         10              10
                          M>44.25 and M<53.35 and
                          C>23.5.
0203...................  Traumatic brain injury            1.2601     1.0225     0.9128          0.8523         13         13         11              10
                          M>44.25 and C<23.5.
0204...................  Traumatic brain injury            1.3722     1.1135     0.9940          0.9281         13         13         11              11
                          M>40.65 and M<44.25.
0205...................  Traumatic brain injury            1.6209     1.3153     1.1741          1.0963         14         15         13              13
                          M>28.75 and M<40.65.
0206...................  Traumatic brain injury            1.9535     1.5852     1.4150          1.3212         18         18         15              15
                          M>22.05 and M<28.75.
0207...................  Traumatic brain injury            2.4678     2.0025     1.7875          1.6691         31         22         19              18
                          M<22.05.
0301...................  Non-traumatic brain injury        1.1740     0.9497     0.8712          0.8146         11         11         10              10
                          M>41.05.
0302...................  Non-traumatic brain injury        1.4336     1.1597     1.0639          0.9948         12         13         12              12
                          M>35.05 and M<41.05.
0303...................  Non-traumatic brain injury        1.6587     1.3419     1.2309          1.1510         15         14         13              13
                          M>26.15 and M<35.05.
0304...................  Non-traumatic brain injury        2.1196     1.7147     1.5729          1.4708         20         19         16              16
                          M<26.15.
0401...................  Traumatic spinal cord injury      1.0031     0.8112     0.7498          0.6853         10         10          9               9
                          M>48.45.
0402...................  Traumatic spinal cord injury      1.4909     1.2056     1.1144          1.0186         14         13         13              12
                          M>30.35 and M<48.45.
0403...................  Traumatic spinal cord injury      2.3615     1.9096     1.7650          1.6133         25         22         19              18
                          M>16.05 and M<30.35.
0404...................  Traumatic spinal cord injury      4.0165     3.2479     3.0021          2.7440         45         36         31              30
                          M<16.05 and A>63.5.
0405...................  Traumatic spinal cord injury      3.5422     2.8643     2.6476          2.4199         26         33         27              26
                          M<16.05 and A<63.5.
0501...................  Non-traumatic spinal cord         0.9175     0.7147     0.6615          0.6076          9         10          8               8
                          injury M>51.35.
0502...................  Non-traumatic spinal cord         1.2206     0.9508     0.8800          0.8083         11         11         10              10
                          injury M>40.15 and M<51.35.
0503...................  Non-traumatic spinal cord         1.5123     1.1781     1.0903          1.0015         14         13         12              12
                          injury M>31.25 and M<40.15.
0504...................  Non-traumatic spinal cord         1.7404     1.3557     1.2548          1.1526         16         14         14              13
                          injury M>29.25 and M<31.25.
0505...................  Non-traumatic spinal cord         1.9922     1.5519     1.4363          1.3194         18         17         16              15
                          injury M>23.75 and M<29.25.
0506...................  Non-traumatic spinal cord         2.6966     2.1006     1.9441          1.7858         26         23         21              20
                          injury M<23.75.

[[Page 20980]]

 
0601...................  Neurological M>47.75.........     1.0727     0.8220     0.7615          0.6941          9          9          9               8
0602...................  Neurological M>37.35 and          1.3940     1.0681     0.9896          0.9019         12         12         11              10
                          M<47.75.
0603...................  Neurological M>25.85 and          1.7135     1.3130     1.2164          1.1087         14         14         13              13
                          M<37.35.
0604...................  Neurological M<25.85.........     2.2159     1.6979     1.5730          1.4337         19         17         16              16
0701...................  Fracture of lower extremity       1.0293     0.8388     0.7954          0.7177         10         10          9               9
                          M>42.15.
0702...................  Fracture of lower extremity       1.3091     1.0668     1.0115          0.9128         12         12         12              11
                          M>34.15 and M<42.15.
0703...................  Fracture of lower extremity       1.5608     1.2720     1.2061          1.0883         15         14         14              13
                          M>28.15 and M<34.15.
0704...................  Fracture of lower extremity       1.9933     1.6244     1.5402          1.3899         18         18         17              16
                          M<28.15.
0801...................  Replacement of lower              0.8362     0.6820     0.6159          0.5727          8          8          8               7
                          extremity joint M>49.55.
0802...................  Replacement of lower              1.0782     0.8793     0.7941          0.7384         11          9          9               9
                          extremity joint M>37.05 and
                          M<49.55.
0803...................  Replacement of lower              1.4172     1.1557     1.0438          0.9706         13         13         12              11
                          extremity joint M>28.65 and
                          M<37.05 and A>83.5.
0804...................  Replacement of lower              1.2741     1.0390     0.9384          0.8726         12         12         11              10
                          extremity joint M>28.65 and
                          M<37.05 and A<83.5.
0805...................  Replacement of lower              1.5185     1.2383     1.1184          1.0399         14         14         12              12
                          extremity joint M>22.05 and
                          M<28.65.
0806...................  Replacement of lower              1.8736     1.5279     1.3800          1.2832         17         17         15              14
                          extremity joint M<22.05.
0901...................  Other orthopedic M>44.75.....     1.0336     0.8091     0.7490          0.6903         11         10          9               8
0902...................  Other orthopedic M>34.35 and      1.3077     1.0236     0.9476          0.8734         12         12         11              10
                          M<44.75.
0903...................  Other orthopedic M>24.15 and      1.6323     1.2777     1.1828          1.0902         14         14         13              12
                          M<34.35.
0904...................  Other orthopedic M<24.15.....     2.0449     1.6006     1.4818          1.3657         17         17         16              15
1001...................  Amputation, lower extremity       1.0914     0.9202     0.8209          0.7566         11         10         10               9
                          M>47.65.
1002...................  Amputation, lower extremity       1.3986     1.1792     1.0520          0.9696         13         13         12              12
                          M>36.25 and M<47.65.
1003...................  Amputation, lower extremity       2.0249     1.7073     1.5231          1.4038         18         18         16              15
                          M<36.25.
1101...................  Amputation, non-lower             1.3802     0.9958     0.9958          0.8947         12         11         11              11
                          extremity M>36.35.
1102...................  Amputation, non-lower             1.9397     1.3995     1.3995          1.2574         17         14         15              13
                          extremity M<36.35.
1201...................  Osteoarthritis M>37.65.......     1.1131     0.9558     0.8693          0.7900         11         10         10               9
1202...................  Osteoarthritis M>30.75 and        1.4086     1.2096     1.1001          0.9998         13         13         12              12
                          M<37.65.
1203...................  Osteoarthritis M<30.75.......     1.7059     1.4648     1.3323          1.2108         15         16         15              14
1301...................  Rheumatoid, other arthritis       1.0974     0.9616     0.8870          0.8378         10         10         10              10
                          M>36.35.
1302...................  Rheumatoid, other arthritis       1.4376     1.2598     1.1620          1.0976         12         13         13              13
                          M>26.15 and M<36.35.
1303...................  Rheumatoid, other arthritis       1.7313     1.5171     1.3994          1.3218         14         17         15              15
                          M<26.15.
1401...................  Cardiac M>48.85..............     0.9240     0.7515     0.6781          0.6099          9          8          8               7
1402...................  Cardiac M>38.55 and M<48.85..     1.2392     1.0078     0.9093          0.8180         11         11         10              10
1403...................  Cardiac M>31.15 and M<38.55..     1.4776     1.2017     1.0843          0.9753         13         13         12              11
1404...................  Cardiac M<31.15..............     1.8592     1.5120     1.3643          1.2272         17         16         14              13
1501...................  Pulmonary M>49.25............     1.0096     0.8767     0.7953          0.7609          9         10          9               8
1502...................  Pulmonary M>39.05 and M<49.25     1.2873     1.1178     1.0140          0.9702         11         11         10              11
1503...................  Pulmonary M>29.15 and M<39.05     1.5272     1.3262     1.2030          1.1511         14         13         12              12
1504...................  Pulmonary M<29.15............     1.9278     1.6740     1.5186          1.4530         19         16         15              14
1601...................  Pain syndrome M>37.15........     1.2093     0.9269     0.8786          0.7937          9         11         10              10
1602...................  Pain syndrome M>26.75 and         1.5344     1.1760     1.1148          1.0070         11         12         12              12
                          M<37.15.
1603...................  Pain syndrome M<26.75........     1.8652     1.4295     1.3551          1.2241         12         16         15              14
1701...................  Major multiple trauma without     1.2867     0.9776     0.9126          0.8224         14         11         11              10
                          brain or spinal cord injury
                          M>39.25.
1702...................  Major multiple trauma without     1.5500     1.1777     1.0993          0.9907         13         14         12              12
                          brain or spinal cord injury
                          M>31.05 and M<39.25.
1703...................  Major multiple trauma without     1.8117     1.3765     1.2849          1.1580         15         15         14              13
                          brain or spinal cord injury
                          M>25.55 and M<31.05.
1704...................  Major multiple trauma without     2.3035     1.7502     1.6337          1.4724         20         19         17              16
                          brain or spinal cord injury
                          M<25.55.
1801...................  Major multiple trauma with        1.1210     1.0101     0.8484          0.7937         12         11         10              10
                          brain or spinal cord injury
                          M>40.85.
1802...................  Major multiple trauma with        1.6611     1.4967     1.2572          1.1761         16         17         14              13
                          brain or spinal cord injury
                          M>23.05 and M<40.85.
1803...................  Major multiple trauma with        2.5942     2.3375     1.9634          1.8368         30         25         20              20
                          brain or spinal cord injury
                          M<23.05.
1901...................  Guillian Barre M>35.95.......     1.4128     1.0101     0.9494          0.9109         15         13         11              11
1902...................  Guillian Barre M>18.05 and        2.4873     1.7782     1.6714          1.6037         24         21         18              18
                          M<35.95.
1903...................  Guillian Barre M<18.05.......     4.2909     3.0677     2.8833          2.7665         46         31         30              30
2001...................  Miscellaneous M>49.15........     0.9692     0.7714     0.7164          0.6501          9          9          8               8
2002...................  Miscellaneous M>38.75 and         1.2596     1.0025     0.9311          0.8449         11         11         10              10
                          M<49.15.
2003...................  Miscellaneous M>27.85 and         1.5478     1.2319     1.1442          1.0382         14         14         12              12
                          M<38.75.
2004...................  Miscellaneous M<27.85........     1.9731     1.5704     1.4585          1.3235         18         17         15              15
2101...................  Burns M>0....................     1.9150     1.5473     1.5040          1.3189         22         16         16              14
5001...................  Short-stay cases, length of    .........  .........  .........          0.1601  .........  .........  .........               2
                          stay is 3 days or fewer.
5101...................  Expired, orthopedic, length    .........  .........  .........          0.7561  .........  .........  .........               8
                          of stay is 13 days or fewer.
5102...................  Expired, orthopedic, length    .........  .........  .........          1.6523  .........  .........  .........              18
                          of stay is 14 days or more.
5103...................  Expired, not orthopedic,       .........  .........  .........          0.8114  .........  .........  .........               8
                          length of stay is 15 days or
                          fewer.

[[Page 20981]]

 
5104...................  Expired, not orthopedic,       .........  .........  .........          2.1193  .........  .........  .........              21
                          length of stay is 16 days or
                          more.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Generally, updates to the CMG relative weights result in some 
increases and some decreases to the CMG relative weight values. Table 3 
shows how we estimate that the application of the proposed revisions 
for FY 2019 would affect particular CMG relative weight values, which 
would affect the overall distribution of payments within CMGs and 
tiers. Note that, because we propose to implement the CMG relative 
weight revisions in a budget-neutral manner (as previously described), 
total estimated aggregate payments to IRFs for FY 2019 would not be 
affected as a result of the proposed CMG relative weight revisions. 
However, the proposed revisions would affect the distribution of 
payments within CMGs and tiers.

   Table 3--Distributional Effects of the Proposed Changes to the CMG
                            Relative Weights
              [FY 2018 values compared with FY 2019 values]
------------------------------------------------------------------------
    Percentage change in CMG relative        Number of     Percentage of
                 weights                  cases affected  cases affected
------------------------------------------------------------------------
Increased by 15% or more................              19             0.0
Increased by between 5% and 15%.........           1,600             0.4
Changed by less than 5%.................         394,149            99.3
Decreased by between 5% and 15%.........           1,193             0.3
Decreased by 15% or more................              74             0.0
------------------------------------------------------------------------

    As Table 3 shows, 99.3 percent of all IRF cases are in CMGs and 
tiers that would experience less than a 5 percent change (either 
increase or decrease) in the CMG relative weight value as a result of 
the revisions for FY 2019. The largest estimated increase in the 
proposed CMG relative weight values that affects the largest number of 
IRF discharges would be a 3.4 percent change in the CMG relative weight 
value for CMG 0806 Replacement of lower extremity joint, with a motor 
score less than 22.05--with no tier adjustment. In the FY 2017 claims 
data, 1,580 IRF discharges (0.4 percent of all IRF discharges) were 
classified into this CMG and tier.
    The largest estimated decrease in a CMG relative weight value 
affecting the largest number of IRF cases would be a 2.1 percent 
decrease in the CMG relative weight for CMG 0304--Non-traumatic brain 
injury, with a motor score less than 26.5--with no tier adjustment. In 
the FY 2017 IRF claims data, this change would have affected 3,354 
cases (0.8 percent of all IRF cases).
    The proposed changes in the average length of stay values for FY 
2019, compared with the FY 2018 average length of stay values, are 
small and do not show any particular trends in IRF length of stay 
patterns.
    We invite public comment on our proposed updates to the CMG 
relative weights and average length of stay values for FY 2019.

IV. Facility-Level Adjustment Factors

    Section 1886(j)(3)(A)(v) of the Act confers broad authority upon 
the Secretary to adjust the per unit payment rate by such factors as 
the Secretary determines are necessary to properly reflect variations 
in necessary costs of treatment among rehabilitation facilities. Under 
this authority, we currently adjust the prospective payment amount 
associated with a CMG to account for facility-level characteristics 
such as an IRF's LIP, teaching status, and location in a rural area, if 
applicable, as described in Sec.  412.624(e).
    Based on the substantive changes to the facility-level adjustment 
factors that were adopted in the FY IRF PPS 2014 final rule (78 FR 
47860, 47868 through 47872), in the FY 2015 IRF PPS final rule (79 FR 
45872, 45882 through 45883), we froze the facility-level adjustment 
factors at the FY 2014 levels for FY 2015 and all subsequent years 
(unless and until we propose to update them again through future 
notice-and-comment rulemaking). For FY 2019, we will continue to hold 
the adjustment factors at the FY 2014 levels as we continue to monitor 
the most current IRF claims data available and continue to evaluate and 
monitor the effects of the FY 2014 changes.

V. Proposed FY 2019 IRF PPS Payment Update

A. Background

    Section 1886(j)(3)(C) of the Act requires the Secretary to 
establish an increase factor that reflects changes over time in the 
prices of an appropriate mix of goods and services included in the IRF 
PPS payment, which is referred to as a market basket index. According 
to section 1886(j)(3)(A)(i) of the Act, the increase factor shall be 
used to update the IRF prospective payment rates for each FY. Section 
1886(j)(3)(C)(ii)(I) of the Act requires the application of a 
productivity adjustment. In addition, sections 1886(j)(3)(C)(ii)(II) 
and 1886(j)(3)(D)(v) of the Act require the application of a 0.75 
percentage point reduction to the market basket increase factor for FY 
2019. Thus, we propose to update the IRF PPS payments for FY 2019 by a 
market basket increase factor as required by section 1886(j)(3)(C) of 
the Act, with a productivity adjustment as required by section 
1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction 
as required by sections 1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of 
the Act.
    Beginning with the FY 2016 IRF PPS, we created and adopted a stand-
alone IRF market basket, which was referred to as the 2012-based IRF 
market basket, reflecting the operating and capital cost structures for 
freestanding IRFs and hospital-based IRFs. The FY 2016 IRF

[[Page 20982]]

PPS final rule (80 FR 47046 through 47068) contains a complete 
discussion of the development of the 2012-based IRF market basket.

B. Proposed FY 2019 Market Basket Update and Productivity Adjustment

    For FY 2018, we applied an increase factor of 1.0 percent to update 
the IRF prospective payment rates in accordance with section 
1886(j)(3)(C)(iii) of the Act, as added by section 411(b) of MACRA. 
However, as discussed previously, for FY 2019, we propose to update the 
IRF PPS payments by a market basket increase factor as required by 
section 1886(j)(3)(C) of the Act, with a productivity adjustment as 
required by section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 
percentage point reduction as required by sections 
1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act. For FY 2019, we 
propose to use the same methodology described in the FY 2017 IRF PPS 
final rule (81 FR 52071) to compute the FY 2019 market basket increase 
factor to update the IRF PPS base payment rate.
    Consistent with historical practice, we are proposing to estimate 
the market basket update for the IRF PPS based on the most up-to-date 
forecast of price indexes used in the market basket as forecasted by 
IHS Global Inc. (``IGI''). IGI is a nationally recognized economic and 
financial forecasting firm with which we contract to forecast the 
components of the market baskets and MFP. Based on IGI's first quarter 
2018 forecast with historical data through the fourth quarter of 2017, 
the 2012-based IRF market basket increase factor for FY 2019 is 
projected to be 2.9 percent. Therefore, consistent with our historical 
practice of estimating market basket increases based on the best 
available data, we are proposing that the 2012-based IRF market basket 
increase factor for FY 2019 would be 2.9 percent. We are also proposing 
that if more recent data are subsequently available (for example, a 
more recent estimate of the market basket update), we would use such 
data to determine the FY 2019 market basket update in the final rule.
    According to section 1886(j)(3)(C)(i) of the Act, the Secretary 
shall establish an increase factor based on an appropriate percentage 
increase in a market basket of goods and services. Section 
1886(j)(3)(C)(ii) of the Act then requires that, after establishing the 
increase factor for a FY, the Secretary shall reduce such increase 
factor for FY 2012 and each subsequent FY, by the productivity 
adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. 
Section 1886(b)(3)(B)(xi)(II) of the Act sets forth the definition of 
this productivity adjustment. The statute defines the productivity 
adjustment to be equal to the 10-year moving average of changes in 
annual economy-wide private nonfarm business multifactor productivity 
(MFP) (as projected by the Secretary for the 10- year period ending 
with the applicable FY, year, cost reporting period, or other annual 
period) (the ``MFP adjustment''). The BLS publishes the official 
measure of private nonfarm business MFP. Please see https://www.bls.gov/mfp for the BLS historical published MFP data. A complete description 
of the MFP projection methodology is available on the CMS website at 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html.
    Using IGI's first quarter 2018 forecast, the MFP adjustment for FY 
2019 (the 10-year moving average of MFP for the period ending FY 2019) 
is projected to be 0.8 percent. Thus, in accordance with section 
1886(j)(3)(C) of the Act, we are proposing to base the FY 2019 market 
basket update, which is used to determine the applicable percentage 
increase for the IRF payments, on the most recent estimate of the 2012-
based IRF market basket. We are proposing to then reduce this 
percentage increase by the most recent estimate of the MFP adjustment 
for FY 2019 of 0.8 percentage point. Following application of the MFP 
adjustment, we are proposing to further reduce the applicable 
percentage increase by 0.75 percentage point, as required by sections 
1886(j)(3)(C)(ii)(II) and 1886(j)(3)(D)(v) of the Act. Therefore, the 
proposed FY 2019 IRF update is 1.35 percent (2.9 percent market basket 
update, less 0.8 percentage point MFP adjustment, less 0.75 percentage 
point statutorily required adjustment). Furthermore, we propose that if 
more recent data are subsequently available (for example, a more recent 
estimate of the MFP adjustment), we will use such data to determine the 
FY 2019 MFP adjustment in the final rule.
    For FY 2019, the Medicare Payment Advisory Commission (MedPAC) 
recommends that we reduce IRF PPS payment rates by 5 percent. As 
discussed, and in accordance with sections 1886(j)(3)(C) and 
1886(j)(3)(D) of the Act, the Secretary is proposing to update the IRF 
PPS payment rates for FY 2019 by an adjusted market basket increase 
factor of 1.35 percent, as section 1886(j)(3)(C) of the Act does not 
provide the Secretary with the authority to apply a different update 
factor to IRF PPS payment rates for FY 2019.
    We invite public comment on the proposed market basket update and 
productivity adjustment.

C. Proposed Labor-Related Share for FY 2019

    Section 1886(j)(6) of the Act specifies that the Secretary is to 
adjust the proportion (as estimated by the Secretary from time to time) 
of rehabilitation facilities' costs which are attributable to wages and 
wage-related costs of the prospective payment rates computed under 
section 1886(j)(3) of the Act for area differences in wage levels by a 
factor (established by the Secretary) reflecting the relative hospital 
wage level in the geographic area of the rehabilitation facility 
compared to the national average wage level for such facilities. The 
labor-related share is determined by identifying the national average 
proportion of total costs that are related to, influenced by, or vary 
with the local labor market. We continue to classify a cost category as 
labor-related if the costs are labor-intensive and vary with the local 
labor market.
    Based on our definition of the labor-related share and the cost 
categories in the 2012-based IRF market basket, we propose to calculate 
the labor-related share for FY 2019 as the sum of the FY 2019 relative 
importance of Wages and Salaries, Employee Benefits, Professional Fees: 
Labor- Related, Administrative and Facilities Support Services, 
Installation, Maintenance, and Repair Services, All Other: Labor-
related Services, and a portion of the Capital-Related cost weight from 
the 2012-based IRF market basket. For more details regarding the 
methodology for determining specific cost categories for inclusion in 
the 2012-based IRF labor-related share, see the FY 2016 IRF final rule 
(80 FR 47066 through 47068).
    Using this method and IGI's first quarter 2018 forecast for the 
2012-based IRF market basket, the proposed IRF labor-related share for 
FY 2019 is 70.6 percent. We propose that if more recent data are 
subsequently available (for example, a more recent estimate of the 
labor-related share), we will use such data to determine the FY 2019 
IRF labor-related share in the final rule.
    Incorporating the most recent estimate of the 2012-based IRF market 
basket based on IGI's first quarter 2018 forecast with historical data 
through the fourth quarter of 2017, the sum of the relative importance 
for FY 2019 operating costs (Wages and Salaries, Employee Benefits, 
Professional Fees: Labor-related, Administrative and Facilities Support 
Services, Installation Maintenance & Repair Services, and All Other: 
Labor-related Services) using the 2012-based

[[Page 20983]]

IRF market basket is 66.8 percent. We propose that the portion of 
Capital-Related Costs that is influenced by the local labor market is 
estimated to be 46 percent. Incorporating the most recent estimate of 
the FY 2019 relative importance of Capital-Related costs from the 2012-
based IRF market basket based on IGI's first quarter 2018 forecast with 
historical data through the fourth quarter of 2017, which is 8.2 
percent, we take 46 percent of 8.2 percent to determine the labor-
related share of Capital for FY 2019. We propose to then add this 
amount (3.8 percent) to the sum of the relative importance for FY 2019 
operating costs (66.8 percent) to determine the total labor-related 
share for FY 2019 of 70.6 percent. Thus, the proposed FY 2019 labor-
related share is 70.6 percent. By comparison, the FY 2018 labor-related 
share was 70.7 percent.

                    Table 4--IRF Labor-Related Share
------------------------------------------------------------------------
                                              FY 2019
                                          proposed labor-  FY 2018 final
                                           related share   labor related
                                                \1\          share \2\
------------------------------------------------------------------------
Wages and salaries......................            47.8            47.8
Employee Benefits.......................            11.1            11.2
Professional Fees: Labor-related........             3.4             3.4
Administrative and Facilities Support                0.8             0.8
 Services...............................
Installation, Maintenance, and Repair                1.9             1.9
 Services...............................
All Other: Labor-related Services.......             1.8             1.8
                                         -------------------------------
    Subtotal............................            66.8            66.9
Labor-related portion of capital (46%)..             3.8             3.8
                                         -------------------------------
        Total Labor-Related Share.......            70.6            70.7
------------------------------------------------------------------------
\1\ Based on the 2012-based IRF Market Basket, IGI's 1st quarter 2018
  forecast with historical data through the 4th quarter of 2017.
\2\ Federal Register (82 FR 36249).

    We invite public comment on the proposed labor-related share for FY 
2019.

D. Proposed Wage Adjustment for FY 2019

1. Background
    Section 1886(j)(6) of the Act requires the Secretary to adjust the 
proportion of rehabilitation facilities' costs attributable to wages 
and wage-related costs (as estimated by the Secretary from time to 
time) by a factor (established by the Secretary) reflecting the 
relative hospital wage level in the geographic area of the 
rehabilitation facility compared to the national average wage level for 
those facilities. The Secretary is required to update the IRF PPS wage 
index on the basis of information available to the Secretary on the 
wages and wage-related costs to furnish rehabilitation services. Any 
adjustment or updates made under section 1886(j)(6) of the Act for a FY 
are made in a budget-neutral manner.
    For FY 2019, we propose to maintain the policies and methodologies 
described in the FY 2018 IRF PPS final rule (82 FR 36238, 36249 through 
36250) related to the labor market area definitions and the wage index 
methodology for areas with wage data. Thus, we propose to use the CBSA 
labor market area definitions and the FY 2018 pre-reclassification and 
pre-floor hospital wage index data. In accordance with section 
1886(d)(3)(E) of the Act, the FY 2018 pre-reclassification and pre-
floor hospital wage index is based on data submitted for hospital cost 
reporting periods beginning on or after October 1, 2013, and before 
October 1, 2014 (that is, FY 2014 cost report data).
    The labor market designations made by the OMB include some 
geographic areas where there are no hospitals and, thus, no hospital 
wage index data on which to base the calculation of the IRF PPS wage 
index. We propose to continue to use the same methodology discussed in 
the FY 2008 IRF PPS final rule (72 FR 44299) to address those 
geographic areas where there are no hospitals and, thus, no hospital 
wage index data on which to base the calculation for the FY 2019 IRF 
PPS wage index.
    We invite public comment on this proposal.
2. Core-Based Statistical Areas (CBSAs) for the Proposed FY 2019 IRF 
Wage Index
    The wage index used for the IRF PPS is calculated using the pre-
reclassification and pre-floor acute care hospital wage index data and 
is assigned to the IRF on the basis of the labor market area in which 
the IRF is geographically located. IRF labor market areas are 
delineated based on the CBSAs established by the OMB. The current CBSA 
delineations (which were implemented for the IRF PPS beginning with FY 
2016) are based on revised OMB delineations issued on February 28, 
2013, in OMB Bulletin No. 13-01. OMB Bulletin No. 13-01 established 
revised delineations for Metropolitan Statistical Areas, Micropolitan 
Statistical Areas, and Combined Statistical Areas in the United States 
and Puerto Rico based on the 2010 Census, and provided guidance on the 
use of the delineations of these statistical areas using standards 
published on June 28, 2010, in the Federal Register (75 FR 37246 
through 37252). We refer readers to the FY 2016 IRF PPS final rule (80 
FR 47068 through 47076) for a full discussion of our implementation of 
the OMB labor market area delineations beginning with the FY 2016 wage 
index.
    Generally, OMB issues major revisions to statistical areas every 10 
years, based on the results of the decennial census. However, OMB 
occasionally issues minor updates and revisions to statistical areas in 
the years between the decennial censuses. On July 15, 2015, OMB issued 
OMB Bulletin No. 15-01, which provides minor updates to and supersedes 
OMB Bulletin No. 13-01 that was issued on February 28, 2013. The 
attachment to OMB Bulletin No. 15-01 provides detailed information on 
the update to statistical areas since February 28, 2013. The updates 
provided in OMB Bulletin No. 15-01 are based on the application of the 
2010 Standards for Delineating Metropolitan and Micropolitan 
Statistical Areas to Census Bureau population estimates for July 1, 
2012 and July 1, 2013. The complete list of statistical areas 
incorporating these changes is provided in OMB Bulletin No. 15-01. In 
the FY 2018 IRF PPS final rule (82 FR 36250 through 36251), we

[[Page 20984]]

adopted the updates set forth in OMB Bulletin No. 15-01 effective 
October 1, 2017, beginning with the FY 2018 wage index. For a complete 
discussion of the adoption of the updates set forth in OMB Bulletin No. 
15-01, we refer readers to the FY 2018 IRF PPS final rule.
    For FY 2019, we propose to continue using the OMB delineations that 
we adopted beginning with FY 2016 to calculate the area wage indexes, 
with the updates set forth in OMB Bulletin No. 15-01 that we adopted 
beginning with the FY 2018 wage index.
    We invite public comment on this proposal.
3. Codes for Constituent Counties in CBSAs
    CBSAs are made up of one or more constituent counties. Each CBSA 
and constituent county has its own unique identifying codes. There are 
two different lists of codes associated with counties: Social Security 
Administration (SSA) codes and Federal Information Processing Standard 
(FIPS) codes. Historically, we have used SSA and FIPS county codes to 
identify and crosswalk counties to CBSA codes for purposes of the IRF 
wage index. We have learned that SSA county codes are no longer being 
maintained and updated. However, the FIPS codes continue to be 
maintained by the U.S. Census Bureau. The Census Bureau's most current 
statistical area information is derived from ongoing census data 
received since 2010; the most recent data are from 2015. For purposes 
of cross-walking counties to CBSA codes, we are proposing to 
discontinue the use of SSA county codes and continue using only the 
FIPS county codes. We are proposing to use the FIPS county codes to 
calculate area wage indexes in a manner that is generally consistent 
with the CBSA-based methodologies finalized in the FY 2006 IRF final 
rule (70 FR 47880) and the FY 2016 IRF final rule (80 FR 47036). The 
use of the FIPS codes for cross-walking counties to CBSAs does not 
result in any changes to the constituent counties of any CBSA. Thus, 
there is no impact or change for any IRF due to the use of the FIPS 
county codes. We believe that using the latest FIPS codes will allow us 
to maintain a more accurate and up-to-date payment system that reflects 
the reality of population shifts and labor market conditions.
    As discussed in the FY 2018 Inpatient prospective payment system 
(IPPS) and Long-Term Care Hospital (LTCH) PPS final rule (82 FR 38130), 
this change was implemented under the IPPS beginning on October 1, 
2017. Therefore, we are proposing to implement this revision for the 
IRF PPS beginning October 1, 2018, consistent with our historical 
practice of modeling IRF PPS adoption of updates to labor market areas 
after IPPS adoption of these changes.
    We invite public comments on this proposal.
4. Wage Adjustment
    The proposed wage index applicable to FY 2019 is available on the 
CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html. Table A is for urban 
areas, and Table B is for rural areas.
    To calculate the wage-adjusted facility payment for the payment 
rates set forth in this proposed rule, we multiply the unadjusted 
federal payment rate for IRFs by the FY 2019 labor-related share based 
on the 2012-based IRF market basket (70.6 percent) to determine the 
labor-related portion of the standard payment amount. A full discussion 
of the calculation of the labor-related share is located in section V.C 
of this proposed rule. We then multiply the labor-related portion by 
the applicable IRF wage index from the tables in the addendum to this 
proposed rule. These tables are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html.
    Adjustments or updates to the IRF wage index made under section 
1886(j)(6) of the Act must be made in a budget-neutral manner. We 
propose to calculate a budget-neutral wage adjustment factor as 
established in the FY 2004 IRF PPS final rule (68 FR 45689), codified 
at Sec.  412.624(e)(1), as described in the steps below. We propose to 
use the listed steps to ensure that the FY 2019 IRF standard payment 
conversion factor reflects the proposed update to the wage indexes 
(based on the FY 2014 hospital cost report data) and the labor-related 
share in a budget-neutral manner:
    Step 1. Determine the total amount of the estimated FY 2018 IRF PPS 
payments, using the FY 2018 standard payment conversion factor and the 
labor-related share and the wage indexes from FY 2018 (as published in 
the FY 2018 IRF PPS final rule (82 FR 36238)).
    Step 2. Calculate the total amount of estimated IRF PPS payments 
using the proposed FY 2019 standard payment conversion factor and the 
proposed FY 2019 labor-related share and CBSA urban and rural wage 
indexes.
    Step 3. Divide the amount calculated in step 1 by the amount 
calculated in step 2. The resulting quotient is the proposed FY 2019 
budget-neutral wage adjustment factor of 1.0000.
    Step 4. Apply the proposed FY 2019 budget-neutral wage adjustment 
factor from step 3 to the FY 2018 IRF PPS standard payment conversion 
factor after the application of the increase factor to determine the 
proposed FY 2019 standard payment conversion factor.
    We discuss the calculation of the proposed standard payment 
conversion factor for FY 2019 in section V.E. of this proposed rule.
    We invite public comment on the proposed IRF wage adjustment for FY 
2019.

E. Description of the Proposed IRF Standard Payment Conversion Factor 
and Payment Rates for FY 2019

    To calculate the proposed standard payment conversion factor for FY 
2019, as illustrated in Table 5, we begin by applying the proposed 
increase factor for FY 2019, as adjusted in accordance with sections 
1886(j)(3)(C) and (D) of the Act, to the standard payment conversion 
factor for FY 2018 ($15,838). Applying the proposed 1.35 percent 
increase factor for FY 2019 to the standard payment conversion factor 
for FY 2018 of $15,838 yields a standard payment amount of $16,052. 
Then, we apply the proposed budget neutrality factor for the FY 2019 
wage index and labor-related share of 1.0000, which results in a 
proposed standard payment amount of $16,052. We next apply the proposed 
budget neutrality factor for the revised CMG relative weights of 
0.9980, which results in the proposed standard payment conversion 
factor of $16,020 for FY 2019.

Table 5--Calculations To Determine the Proposed FY 2019 Standard Payment
                            Conversion Factor
------------------------------------------------------------------------
               Explanation for adjustment                  Calculations
------------------------------------------------------------------------
Standard Payment Conversion Factor for FY 2018..........         $15,838

[[Page 20985]]

 
Market Basket Increase Factor for FY 2019 (2.9 percent),        x 1.0135
 reduced by 0.8 percentage point for the productivity
 adjustment as required by section 1886(j)(3)(C)(ii)(I)
 of the Act, and reduced by 0.75 percentage point in
 accordance with sections 1886(j)(3)(C)(ii)(II) and
 1886(j)(3)(D)(v) of the Act............................
Budget Neutrality Factor for the Wage Index and Labor-          x 1.0000
 Related Share..........................................
Budget Neutrality Factor for the Revisions to the CMG           x 0.9980
 Relative Weights.......................................
Proposed FY 2019 Standard Payment Conversion Factor.....       = $16,020
------------------------------------------------------------------------

    We invite public comment on the proposed FY 2019 standard payment 
conversion factor.
    After the application of the proposed CMG relative weights 
described in section III of this proposed rule to the proposed FY 2019 
standard payment conversion factor ($16,020), the resulting unadjusted 
IRF prospective payment rates for FY 2019 are shown in Table 6.

                                     Table 6--Proposed FY 2019 Payment Rates
----------------------------------------------------------------------------------------------------------------
                                                   Payment rate    Payment rate    Payment rate    Payment rate
                       CMG                            tier 1          tier 2          tier 3      no comorbidity
----------------------------------------------------------------------------------------------------------------
0101............................................      $13,594.57      $11,801.93      $10,831.12      $10,350.52
0102............................................       17,176.64       14,911.42       13,684.28       13,078.73
0103............................................       19,879.22       17,256.74       15,837.37       15,135.70
0104............................................       20,749.10       18,012.89       16,531.04       15,798.92
0105............................................       23,845.77       20,701.04       18,998.12       18,155.47
0106............................................       26,674.90       23,156.91       21,252.13       20,310.16
0107............................................       29,901.33       25,957.21       23,823.34       22,766.02
0108............................................       36,966.15       32,089.66       29,451.17       28,145.54
0109............................................       33,438.55       29,028.24       26,641.26       25,460.59
0110............................................       44,288.89       38,448.00       35,287.25       33,720.50
0201............................................       13,181.26       10,694.95        9,547.92        8,915.13
0202............................................       18,299.65       14,850.54       13,254.95       12,377.05
0203............................................       20,186.80       16,380.45       14,623.06       13,653.85
0204............................................       21,982.64       17,838.27       15,923.88       14,868.16
0205............................................       25,966.82       21,071.11       18,809.08       17,562.73
0206............................................       31,295.07       25,394.90       22,668.30       21,165.62
0207............................................       39,534.16       32,080.05       28,635.75       26,738.98
0301............................................       18,807.48       15,214.19       13,956.62       13,049.89
0302............................................       22,966.27       18,578.39       17,043.68       15,936.70
0303............................................       26,572.37       21,497.24       19,719.02       18,439.02
0304............................................       33,955.99       27,469.49       25,197.86       23,562.22
0401............................................       16,069.66       12,995.42       12,011.80       10,978.51
0402............................................       23,884.22       19,313.71       17,852.69       16,317.97
0403............................................       37,831.23       30,591.79       28,275.30       25,845.07
0404............................................       64,344.33       52,031.36       48,093.64       43,958.88
0405............................................       56,746.04       45,886.09       42,414.55       38,766.80
0501............................................       14,698.35       11,449.49       10,597.23        9,733.75
0502............................................       19,554.01       15,231.82       14,097.60       12,948.97
0503............................................       24,227.05       18,873.16       17,466.61       16,044.03
0504............................................       27,881.21       21,718.31       20,101.90       18,464.65
0505............................................       31,915.04       24,861.44       23,009.53       21,136.79
0506............................................       43,199.53       33,651.61       31,144.48       28,608.52
0601............................................       17,184.65       13,168.44       12,199.23       11,119.48
0602............................................       22,331.88       17,110.96       15,853.39       14,448.44
0603............................................       27,450.27       21,034.26       19,486.73       17,761.37
0604............................................       35,498.72       27,200.36       25,199.46       22,967.87
0701............................................       16,489.39       13,437.58       12,742.31       11,497.55
0702............................................       20,971.78       17,090.14       16,204.23       14,623.06
0703............................................       25,004.02       20,377.44       19,321.72       17,434.57
0704............................................       31,932.67       26,022.89       24,674.00       22,266.20
0801............................................       13,395.92       10,925.64        9,866.72        9,174.65
0802............................................       17,272.76       14,086.39       12,721.48       11,829.17
0803............................................       22,703.54       18,514.31       16,721.68       15,549.01
0804............................................       20,411.08       16,644.78       15,033.17       13,979.05
0805............................................       24,326.37       19,837.57       17,916.77       16,659.20
0806............................................       30,015.07       24,476.96       22,107.60       20,556.86
0901............................................       16,558.27       12,961.78       11,998.98       11,058.61
0902............................................       20,949.35       16,398.07       15,180.55       13,991.87
0903............................................       26,149.45       20,468.75       18,948.46       17,465.00
0904............................................       32,759.30       25,641.61       23,738.44       21,878.51
1001............................................       17,484.23       14,741.60       13,150.82       12,120.73
1002............................................       22,405.57       18,890.78       16,853.04       15,532.99

[[Page 20986]]

 
1003............................................       32,438.90       27,350.95       24,400.06       22,488.88
1101............................................       22,110.80       15,952.72       15,952.72       14,333.09
1102............................................       31,073.99       22,419.99       22,419.99       20,143.55
1201............................................       17,831.86       15,311.92       13,926.19       12,655.80
1202............................................       22,565.77       19,377.79       17,623.60       16,016.80
1203............................................       27,328.52       23,466.10       21,343.45       19,397.02
1301............................................       17,580.35       15,404.83       14,209.74       13,421.56
1302............................................       23,030.35       20,182.00       18,615.24       17,583.55
1303............................................       27,735.43       24,303.94       22,418.39       21,175.24
1401............................................       14,802.48       12,039.03       10,863.16        9,770.60
1402............................................       19,851.98       16,144.96       14,566.99       13,104.36
1403............................................       23,671.15       19,251.23       17,370.49       15,624.31
1404............................................       29,784.38       24,222.24       21,856.09       19,659.74
1501............................................       16,173.79       14,044.73       12,740.71       12,189.62
1502............................................       20,622.55       17,907.16       16,244.28       15,542.60
1503............................................       24,465.74       21,245.72       19,272.06       18,440.62
1504............................................       30,883.36       26,817.48       24,327.97       23,277.06
1601............................................       19,372.99       14,848.94       14,075.17       12,715.07
1602............................................       24,581.09       18,839.52       17,859.10       16,132.14
1603............................................       29,880.50       22,900.59       21,708.70       19,610.08
1701............................................       20,612.93       15,661.15       14,619.85       13,174.85
1702............................................       24,831.00       18,866.75       17,610.79       15,871.01
1703............................................       29,023.43       22,051.53       20,584.10       18,551.16
1704............................................       36,902.07       28,038.20       26,171.87       23,587.85
1801............................................       17,958.42       16,181.80       13,591.37       12,715.07
1802............................................       26,610.82       23,977.13       20,140.34       18,841.12
1803............................................       41,559.08       37,446.75       31,453.67       29,425.54
1901............................................       22,633.06       16,181.80       15,209.39       14,592.62
1902............................................       39,846.55       28,486.76       26,775.83       25,691.27
1903............................................       68,740.22       49,144.55       46,190.47       44,319.33
2001............................................       15,526.58       12,357.83       11,476.73       10,414.60
2002............................................       20,178.79       16,060.05       14,916.22       13,535.30
2003............................................       24,795.76       19,735.04       18,330.08       16,631.96
2004............................................       31,609.06       25,157.81       23,365.17       21,202.47
2101............................................       30,678.30       24,787.75       24,094.08       21,128.78
5001............................................  ..............  ..............  ..............        2,564.80
5101............................................  ..............  ..............  ..............       12,112.72
5102............................................  ..............  ..............  ..............       26,469.85
5103............................................  ..............  ..............  ..............       12,998.63
5104............................................  ..............  ..............  ..............       33,951.19
----------------------------------------------------------------------------------------------------------------

F. Example of the Methodology for Adjusting the Proposed Prospective 
Payment Rates

    Table 7 illustrates the methodology for adjusting the proposed 
federal prospective payments (as described in section V. of this 
proposed rule). The following examples are based on two hypothetical 
Medicare beneficiaries, both classified into CMG 0110 (without 
comorbidities). The proposed unadjusted prospective payment rate for 
CMG 0110 (without comorbidities) appears in Table 6.

    Example:  One beneficiary is in Facility A, an IRF located in 
rural Spencer County, Indiana, and another beneficiary is in 
Facility B, an IRF located in urban Harrison County, Indiana. 
Facility A, a rural non-teaching hospital has a Disproportionate 
Share Hospital (DSH) percentage of 5 percent (which would result in 
a LIP adjustment of 1.0156), a wage index of 0.8088, and a rural 
adjustment of 14.9 percent. Facility B, an urban teaching hospital, 
has a DSH percentage of 15 percent (which would result in a LIP 
adjustment of 1.0454 percent), a wage index of 0.8689, and a 
teaching status adjustment of 0.0784.

    To calculate each IRF's labor and non-labor portion of the proposed 
prospective payment, we begin by taking the unadjusted prospective 
payment rate for CMG 0110 (without comorbidities) from Table 6. Then, 
we multiply the proposed labor-related share for FY 2019 (70.6 percent) 
described in section V.C. of this proposed rule by the proposed 
unadjusted prospective payment rate. To determine the non-labor portion 
of the proposed prospective payment rate, we subtract the labor portion 
of the proposed federal payment from the proposed unadjusted 
prospective payment.
    To compute the proposed wage-adjusted prospective payment, we 
multiply the labor portion of the proposed federal payment by the 
appropriate wage index located in Tables A and B. These tables are 
available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Data-Files.html. The 
resulting figure is the wage-adjusted labor amount. Next, we compute 
the proposed wage-adjusted federal payment by adding the wage-adjusted 
labor amount to the non-labor portion of the proposed federal payment.
    Adjusting the proposed wage-adjusted federal payment by the 
facility-level adjustments involves several steps. First, we take the 
wage-adjusted prospective payment and multiply it by the appropriate 
rural and LIP adjustments (if applicable). Second, to determine the 
appropriate amount of additional payment for the teaching status 
adjustment (if applicable), we multiply the teaching status adjustment 
(0.0784, in this example) by the wage-adjusted and rural-adjusted 
amount (if applicable). Finally, we add the

[[Page 20987]]

additional teaching status payments (if applicable) to the wage, rural, 
and LIP-adjusted prospective payment rates. Table 7 illustrates the 
components of the adjusted payment calculation.

                        Table 7--Example of Computing the FY 2019 IRF Prospective Payment
----------------------------------------------------------------------------------------------------------------
                                                                                                Urban facility B
                   Steps                                                     Rural facility A    (Harrison Co.,
                                                                            (Spencer Co., IN)         IN)
----------------------------------------------------------------------------------------------------------------
1..........................................  Unadjusted Payment...........         $33,720.50         $33,720.50
2..........................................  Labor Share..................            x 0.706            x 0.706
3..........................................  Labor Portion of Payment.....       = $23,806.67       = $23,806.67
4..........................................  CBSA-Based Wage Index (shown            x 0.8088           x 0.8689
                                              in the Addendum, Tables A
                                              and B).
5..........................................  Wage-Adjusted Amount.........       = $19,254.83       = $20,685.62
6..........................................  Non-Labor Amount.............        + $9,913.83        + $9,913.83
7..........................................  Wage-Adjusted Payment........       = $29,168.66       = $30,599.45
8..........................................  Rural Adjustment.............            x 1.149            x 1.000
9..........................................  Wage- and Rural-Adjusted            = $33,514.79       = $30,599.45
                                              Payment.
10.........................................  LIP Adjustment...............           x 1.0156           x 1.0454
11.........................................  Wage-, Rural- and LIP-              = $34,037.62       = $31,988.67
                                              Adjusted Payment.
12.........................................  Wage- and Rural-Adjusted              $33,514.79         $30,599.45
                                              Payment.
13.........................................  Teaching Status Adjustment...                x 0           x 0.0784
14.........................................  Teaching Status Adjustment               = $0.00        = $2,399.00
                                              Amount.
15.........................................  Wage-, Rural-, and LIP-             + $34,037.62       + $31,988.67
                                              Adjusted Payment.
16.........................................  Total Adjusted Payment.......       = $34,037.62       = $34,387.67
----------------------------------------------------------------------------------------------------------------

    Thus, the proposed adjusted payment for Facility A would be 
$34,037.62, and the proposed adjusted payment for Facility B would be 
$34,387.67.

VI. Proposed Update to Payments for High-Cost Outliers Under the IRF 
PPS for FY 2019

A. Proposed Update to the Outlier Threshold Amount for FY 2019

    Section 1886(j)(4) of the Act provides the Secretary with the 
authority to make payments in addition to the basic IRF prospective 
payments for cases incurring extraordinarily high costs. A case 
qualifies for an outlier payment if the estimated cost of the case 
exceeds the adjusted outlier threshold. We calculate the adjusted 
outlier threshold by adding the IRF PPS payment for the case (that is, 
the CMG payment adjusted by all of the relevant facility-level 
adjustments) and the adjusted threshold amount (also adjusted by all of 
the relevant facility-level adjustments). Then, we calculate the 
estimated cost of a case by multiplying the IRF's overall CCR by the 
Medicare allowable covered charge. If the estimated cost of the case is 
higher than the adjusted outlier threshold, we make an outlier payment 
for the case equal to 80 percent of the difference between the 
estimated cost of the case and the outlier threshold.
    In the FY 2002 IRF PPS final rule (66 FR 41362 through 41363), we 
discussed our rationale for setting the outlier threshold amount for 
the IRF PPS so that estimated outlier payments would equal 3 percent of 
total estimated payments. For the 2002 IRF PPS final rule, we analyzed 
various outlier policies using 3, 4, and 5 percent of the total 
estimated payments, and we concluded that an outlier policy set at 3 
percent of total estimated payments would optimize the extent to which 
we could reduce the financial risk to IRFs of caring for high-cost 
patients, while still providing for adequate payments for all other 
(non-high cost outlier) cases.
    Subsequently, we updated the IRF outlier threshold amount in the 
FYs 2006 through 2018 IRF PPS final rules and the FY 2011 and FY 2013 
notices (70 FR 47880, 71 FR 48354, 72 FR 44284, 73 FR 46370, 74 FR 
39762, 75 FR 42836, 76 FR 47836, 76 FR 59256, 77 FR 44618, 78 FR 47860, 
79 FR 45872, 80 FR 47036, 81 FR 52056, and 82 FR 36238, respectively) 
to maintain estimated outlier payments at 3 percent of total estimated 
payments. We also stated in the FY 2009 final rule (73 FR 46370 at 
46385) that we would continue to analyze the estimated outlier payments 
for subsequent years and adjust the outlier threshold amount as 
appropriate to maintain the 3 percent target.
    To update the IRF outlier threshold amount for FY 2019, we propose 
to use FY 2017 claims data and the same methodology that we used to set 
the initial outlier threshold amount in the FY 2002 IRF PPS final rule 
(66 FR 41316 and 41362 through 41363), which is also the same 
methodology that we used to update the outlier threshold amounts for 
FYs 2006 through 2018. The outlier threshold is calculated by 
simulating aggregate payments and using an iterative process to 
determine a threshold that results in outlier payments being equal to 3 
percent of total payments under the simulation. To determine the 
outlier threshold for FY 2019, we estimate the amount of FY 2019 IRF 
PPS aggregate and outlier payments using the most recent claims 
available (FY 2017) and the proposed FY 2019 standard payment 
conversion factor, labor-related share, and wage indexes, incorporating 
any applicable budget-natural adjustment factors. The outlier threshold 
is adjusted either up or down in this simulation until the estimated 
outlier payments equal 3 percent of the estimated aggregate payments. 
Based on an analysis of the preliminary data used for the proposed 
rule, we estimated that IRF outlier payments as a percentage of total 
estimated payments would be approximately 3.4 percent in FY 2018. 
Therefore, we propose to update the outlier threshold amount from 
$8,679 for FY 2018 to $10,509 for FY 2019 to maintain estimated outlier 
payments at approximately 3 percent of total estimated aggregate IRF 
payments for FY 2019.
    We invite public comment on the proposed update to the FY 2019 
outlier threshold amount to maintain estimated outlier payments at 
approximately 3 percent of total estimated IRF payments.

B. Proposed Update to the IRF Cost-to-Charge Ratio Ceiling and Urban/
Rural Averages for FY 2019

    Cost-to-charge ratios are used to adjust charges from Medicare 
claims to costs and are computed annually from facility-specific data 
obtained from Medicare cost reports. IRF specific cost-

[[Page 20988]]

to-charge ratios are used in the development of the CMG relative 
weights and the calculation of outlier payments under the IRF 
prospective payment system. In accordance with the methodology stated 
in the FY 2004 IRF PPS final rule (68 FR 45674, 45692 through 45694), 
we propose to apply a ceiling to IRFs' CCRs. Using the methodology 
described in that final rule, we propose to update the national urban 
and rural CCRs for IRFs, as well as the national CCR ceiling for FY 
2019, based on analysis of the most recent data that is available. We 
apply the national urban and rural CCRs in the following situations:
     New IRFs that have not yet submitted their first Medicare 
cost report.
     IRFs whose overall CCR is in excess of the national CCR 
ceiling for FY 2019, as discussed below in this section.
     Other IRFs for which accurate data to calculate an overall 
CCR are not available.
    Specifically, for FY 2019, we propose to estimate a national 
average CCR of 0.470 for rural IRFs, which we calculated by taking an 
average of the CCRs for all rural IRFs using their most recently 
submitted cost report data. Similarly, we propose to estimate a 
national average CCR of 0.392 for urban IRFs, which we calculated by 
taking an average of the CCRs for all urban IRFs using their most 
recently submitted cost report data. We apply weights to both of these 
averages using the IRFs' estimated costs, meaning that the CCRs of IRFs 
with higher total costs factor more heavily into the averages than the 
CCRs of IRFs with lower total costs. For this proposed rule, we have 
used the most recent available cost report data (FY 2016). This 
includes all IRFs whose cost reporting periods begin on or after 
October 1, 2015, and before October 1, 2016. If, for any IRF, the FY 
2016 cost report was missing or had an ``as submitted'' status, we used 
data from a previous fiscal year's (that is, FY 2004 through FY 2015) 
settled cost report for that IRF. We do not use cost report data from 
before FY 2004 for any IRF because changes in IRF utilization since FY 
2004 resulting from the 60 percent rule and IRF medical review 
activities suggest that these older data do not adequately reflect the 
current cost of care.
    In accordance with past practice, we propose to set the national 
CCR ceiling at 3 standard deviations above the mean CCR. Using this 
method, we proposed a national CCR ceiling of 1.31 for FY 2019. This 
means that, if an individual IRF's CCR were to exceed this proposed 
ceiling of 1.31 for FY 2019, we would replace the IRF's CCR with the 
appropriate proposed national average CCR (either rural or urban, 
depending on the geographic location of the IRF). We calculated the 
proposed national CCR ceiling by:
    Step 1. Taking the national average CCR (weighted by each IRF's 
total costs, as previously discussed) of all IRFs for which we have 
sufficient cost report data (both rural and urban IRFs combined).
    Step 2. Estimating the standard deviation of the national average 
CCR computed in step 1.
    Step 3. Multiplying the standard deviation of the national average 
CCR computed in step 2 by a factor of 3 to compute a statistically 
significant reliable ceiling.
    Step 4. Adding the result from step 3 to the national average CCR 
of all IRFs for which we have sufficient cost report data, from step 1.
    The proposed national average rural and urban CCRs and the proposed 
national CCR ceiling in this section will be updated in the final rule 
if more recent data becomes available to use in these analyses.
    We invite public comment on the proposed update to the IRF CCR 
ceiling and the urban/rural averages for FY 2019.

VII. Proposed Removal of the FIM \TM\ Instrument and Associated 
Function Modifiers From the IRF-PAI Beginning With FY 2020 and Proposed 
Refinements to the Case-Mix Classification System Beginning With FY 
2020

A. Proposed Removal of the FIM \TM\ Instrument and Associated Function 
Modifiers From the IRF-PAI Beginning With FY 2020

    Under section 1886(j)(2)(D) of the Act, the Secretary is authorized 
to require rehabilitation facilities that provide inpatient hospital 
services to submit such data as the Secretary deems necessary to 
establish and administer the IRF PPS. In the FY 2002 IRF PPS final rule 
(66 FR 41324 through 41328), we finalized the use of the IRF-PAI, 
through which IRFs are now required to collect and electronically 
submit patient data for all Medicare Part A FFS and Medicare Part C 
(Medicare Advantage) patients. Data collected in the IRF-PAI is used to 
classify patients into distinct payment groups based on clinical 
characteristics and expected resource needs as well as to monitor the 
quality of care furnished in IRFs.
    The IRF-PAI currently in use under the IRF PPS (IRF-PAI version 
2.0) was originally developed based on a modified version of the 
Uniform Data System for medical rehabilitation (UDSmr) patient 
assessment instrument, commonly referred to as the FIM \TM\. Item 39 of 
the IRF-PAI version 2.0 contains 18 of the FIM \TM\ data elements and 
the FIM \TM\ measurement scale that are used to score both motor and 
cognitive functioning at admission and discharge. The FIM \TM\ data 
elements and measurement scale are collectively referred to as the FIM 
\TM\ instrument. Additionally, items 29 through 38 of the IRF-PAI 
version 2.0 contain Function Modifiers associated with the FIM \TM\ 
instrument. The FIM \TM\ instrument and associated Function Modifiers 
are currently used to assign a patient into a CMG for payment purposes 
under the IRF PPS based on the patient's ability to perform specific 
activities of daily living and, in some cases, the patient's cognitive 
ability.
    In the FY 2012 IRF PPS final rule (76 FR 47873 through 47883), we 
established the IRF QRP in accordance with section 1886(j)(7) of the 
Act and finalized revisions to the IRF-PAI to begin collecting data 
items under the IRF QRP. Under the IRF QRP, the following data items 
are collected in the Quality Indicators section of the IRF-PAI:
     GG0130A1 Eating
     GG0130B1 Oral hygiene
     GG0130C1 Toileting hygiene
     GG0130E1 Shower/bathe self
     GG0130F1 Upper-body dressing
     GG0130G1 Lower-body dressing
     GG0130H1 Putting on/taking off footwear
     GG0170A1 Roll left and right
     GG0170B1 Sit to lying
     GG0170C1 Lying to sitting on side of bed
     GG0170D1 Sit to stand
     GG0170E1 Chair/bed-to-chair transfer
     GG0170F1 Toilet transfer
     GG0170I1 Walk 10 feet
     GG0170J1 Walk 50 feet with two turns
     GG0170K1 Walk 150 feet
     GG0170M1 One step curb
     H0350 Bladder continence
     H0400 Bowel continence
     BB0700 Expression of ideas and wants
     BB0800 Understanding verbal content
     C0500 Brief Interview for Mental Status (BIMS) summary 
score
    Because these data items collect data that are similar in nature 
to, and overlap with, data collected through the FIM \TM\ instrument 
and associated Function Modifiers, we are proposing to remove the FIM 
\TM\ instrument and associated Function Modifiers from the IRF-PAI 
beginning with FY 2020 to reduce administrative burden on IRFs.

[[Page 20989]]

    Currently, data elements in the FIM \TM\ instrument and associated 
Function Modifiers capture data on eating, grooming, bathing, dressing 
upper body, dressing lower body, toileting, bladder management, bowel 
management, transfer to bed/chair/wheelchair, transfer to toilet, 
transfer to tub/shower, walking or wheelchair use, stair climbing, 
comprehension, expression, social interaction, problem solving, and 
memory. The Function Modifiers are used to assist in the scoring of the 
related FIM \TM\ instrument data elements and provide additional 
information as to how the FIM \TM\ instrument data element score has 
been determined. For example, item 29 (Bladder Level of Assistance) and 
item 30 (Bladder Frequency of Accidents) are used to determine the 
score for the item 39G, the Bladder data element contained in the FIM 
\TM\ instrument.
    Data items in the Quality Indicators section of the IRF-PAI capture 
data on functional status, cognitive function, and changes in function 
and cognitive function among other elements used for quality reporting. 
For example, the data items in the Quality Indicators section of the 
IRF-PAI capture data on eating, oral hygiene, toileting hygiene, 
shower/bathing, dressing upper body, dressing lower body, bowel 
continence, bladder continence, chair/bed-to-chair transfer, toilet 
transfer, walking, stair climbing, expression of ideas and wants, 
understanding verbal and non-verbal content, temporal orientation, and 
memory/recall ability.
    As the data elements in the FIM \TM\ instrument (item 39 of the 
IRF-PAI) and associated Function Modifiers (items 29 through 38 of the 
IRF-PAI) overlap, directly or indirectly, with data items in the 
Quality Indicators section of the IRF-PAI, and as we can now use data 
items in the Quality Indicators section of the IRF-PAI to assign 
patients to CMGs for payment under the IRF PPS, we believe that the 
collection of the FIM \TM\ instrument and associated Function Modifiers 
is no longer necessary. Accordingly, we believe that continuing to 
collect the FIM \TM\ instrument and associated Function Modifiers 
places undue burden on IRFs. Additionally, the removal of the FIM \TM\ 
instrument and associated Function Modifiers from the IRF-PAI supports 
the broader goal to standardize data collection across PAC settings as 
several of the data items we are proposing to incorporate into the IRF 
case-mix system are similar to data elements that are also collected on 
Skilled Nursing Facility (SNF) and LTCH assessment instruments. For a 
discussion of how the data items located in the Quality Indicators 
section of the IRF-PAI will be incorporated into the case-mix 
classification system please refer to section VII.B of this proposed 
rule. In support of our goal to reduce administrative burden on 
providers, we are proposing to remove the FIM \TM\ instrument (item 39) 
and associated Function Modifiers (items 29 through 38) from the IRF-
PAI beginning with FY 2020, that is, for all IRF discharges beginning 
on or after October 1, 2019.
    We invite public comment on our proposal to remove the FIM \TM\ 
instrument and associated Function Modifiers from the IRF-PAI beginning 
with FY 2020, that is, for all IRF discharges beginning on or after 
October 1, 2019.

B. Proposed Refinements to the Case-Mix Classification System Beginning 
With FY 2020

1. IRF Classification System Overview
    Section 1886(j)(2) of the Act requires the Secretary to establish 
case-mix groups for payment under the IRF PPS. Under section 
1886(j)(2)(B) of the Act, the Secretary must assign each case-mix group 
a weighting factor that reflects the relative facility resources used 
for patients classified within the group as compared to patients 
classified within other groups. Additionally, section 1886(j)(2)(C)(i) 
of the Act requires the Secretary from time to time to adjust the 
classifications and weighting factors as appropriate to reflect changes 
in treatment patterns, technology, case-mix, number of payment units 
for which payment is made under title XVIII of the Act, and other 
factors which may affect the relative use of resources. Such 
adjustments must be made in a manner so that changes in aggregate 
payments under the classification system are a result of real changes 
and are not a result of changes in coding that are unrelated to real 
changes in case mix.
    In the FY 2002 IRF PPS final rule (66 FR 41316), we established a 
case-mix classification system for IRFs under the IRF PPS. Under the 
case-mix classification system, a patient's principal diagnosis or 
impairment is used to classify the patient into a RIC. The patient is 
then placed into a CMG within the RIC, based on the patient's 
functional status (motor and cognitive scores) and sometimes age. Other 
special circumstances, such as the occurrence of very short stays, or 
cases where the patient expired, are also considered in determining the 
appropriate CMG. CMGs are further divided into tiers based on the 
presence of certain comorbidities. These tiers reflect the differential 
cost of care compared with the average beneficiary in a CMG. We refer 
readers to the FY 2002 final rule (66 FR 41316) and the FY 2006 IRF 
final rule (70 FR 47886) for a detailed discussion of the development 
of, and refinements to, the IRF case-mix classification system.
    As discussed in section VII.A of this proposed rule, we are 
proposing to remove the FIM \TM\ instrument and associated Function 
Modifiers from the IRF-PAI beginning with FY 2020, that is, for all IRF 
discharges beginning on or after October 1, 2019. This would 
necessitate the incorporation of the data items collected on admission 
and located in the Quality Indicators section of the IRF-PAI version 
2.0 into the CMG classification system, as the FIM \TM\ data would no 
longer be available to assign patients to CMGs for purposes of payment 
under the IRF PPS. In accordance with section 1886(j)(2)(C)(i) of the 
Act and as specified in Sec.  412.620(c) we are proposing to replace 
our use of the FIM \TM\ items in assigning CMGs with use of data items 
located in the Quality Indicators section of the IRF-PAI. In addition, 
to ensure that IRF payments are accurately calculated using the data 
items located in the Quality Indicators section of the IRF-PAI, we also 
propose to update the functional status scores used in the case-mix 
system and to revise the CMGs and update the relative weights and 
average length of stay values associated with the revised CMGs. We 
propose to implement these revisions to the case-mix classification 
system in a budget neutral manner.
    We are proposing to make these changes effective beginning with FY 
2020, that is, for discharges occurring on or after October 1, 2019, as 
they require extensive systems changes. That is, we are proposing to 
implement these changes with a one-year delayed effective date to allow 
adequate time for providers and vendors to make the necessary systems 
changes. These proposals are discussed in detail below. We are not 
proposing any changes to the methodology used to update the CMGs, 
relative weights and average length of stay values for FY 2019, that 
is, for discharges occurring on or after October 1, 2018, and on or 
before September 30, 2019. For information on the proposed updates to 
the CMG relative weights and average length of stay values for FY 2019, 
please refer to section III of this proposed rule.
2. Proposed Changes to the Functional Status Scores Beginning With FY 
2020
    As discussed in the FY 2006 IRF final rule (70 FR 47886), under the 
CMG case-mix classification system, a patient's

[[Page 20990]]

principal diagnosis or impairment is used to classify the patient into 
a RIC. After using the RIC to define the first division among the 
inpatient rehabilitation groups, a patient's motor and cognitive scores 
and age are used to partition the cases further. To classify a patient 
into a CMG, IRFs use the admission assessment data from the IRF-PAI to 
score a patient's functional status. Currently, the functional status 
scores consist of what are termed ``motor'' items and ``cognitive'' 
items. In addition to the functional status scores, the patient's age 
may also influence the patient's CMG classification. The motor items 
are generally indications of the patient's physical functioning level. 
The cognitive items are generally indications of the patient's mental 
functioning level, and are related to the patient's ability to process 
and respond to empirical factual information, use judgment, and 
accurately perceive what is happening. Under the current case-mix 
system, the motor and cognitive scores are derived from a combination 
of data elements in the FIM \TM\ instrument (item 39 of the IRF-PAI). 
Eating, grooming, bathing, dressing upper body, dressing lower body, 
toileting, bladder management, bowel management, transfer to bed/chair/
wheelchair, transfer to toilet, walking or wheelchair use, and stair 
climbing are the data elements collected through the FIM \TM\ 
instrument that are currently used to compute a patient's weighted 
motor score. Comprehension, expression, social interaction, problem 
solving, and memory are the data elements collected through the FIM 
\TM\ instrument that are used to compute a patient's cognitive score. 
Each data element is recorded on the IRF-PAI and scored on a scale of 1 
to 7, with a 7 indicating complete independence in this area of 
functioning, and a one indicating that a patient is very impaired in 
this area of functioning. Additionally, a value of zero is used to 
indicate that an activity did not occur. The scores for each data 
element above are then used to determine the patient's weighted motor 
score and cognitive score, which may be used to group a patient into a 
CMG for payment purposes under the IRF PPS.
    As discussed in section VII.A of this proposed rule, we are 
proposing to remove the FIM \TM\ instrument and associated Function 
Modifiers from the IRF-PAI beginning with FY 2020. As the data in the 
FIM \TM\ instrument section will no longer be available to determine 
the motor and cognitive scores used to assign patients to CMGs, we are 
proposing to use data items collected on admission and located in the 
Quality Indicators section of the IRF-PAI to derive the functional 
status scores used to assign patients to a CMG for payment purposes 
under the IRF PPS. The Quality Indicators section of the IRF-PAI 
includes data items that are similar to the data elements located in 
the FIM \TM\ instrument, in addition to new data elements that capture 
additional functional status information.
    In the summer of 2013, we contracted with Research Triangle 
Institute, International (RTI) to explore use of the data items 
collected in the Quality Indicators section of the IRF-PAI in setting 
IRF PPS payments. Some of the data items collected in the Quality 
Indicators section of the IRF-PAI were originally developed and tested 
as part of the Post-Acute Care Payment Reform Demonstration (PAC-PRD) 
version of the Continuity Assessment Record and Evaluation (CARE) Item 
Set. The CARE item set was developed in response to a mandate in 
section 5008 of the Deficit Reduction Act of 2005 (Pub. L. 109-171, 
enacted on February 8, 2006) (DRA) to develop a uniform patient 
assessment instrument to assess patients across all types of acute and 
PAC providers.
    In the first stage of this analysis, RTI hosted a Technical Expert 
Panel (TEP) on September 18, 2014, which brought together researchers, 
clinicians, and representatives from provider associations to discuss 
exploratory research on the potential to incorporate the CARE data 
items in the current case-mix system utilized in the IRF PPS. We 
received helpful feedback on the exploratory research including 
clinicians' views of the importance and significance of various 
findings, input on the methodology used to incorporate the CARE items, 
and potential limitations of the analysis. RTI's analysis of the 
original CARE data set, along with guidance from the TEP, suggested the 
need to derive different functional status measures from the data 
collected in the Quality Indicators section of the IRF-PAI. The data 
items from the Quality Indicators section of the IRF-PAI contain 
slightly different information and utilize a different rating system 
than the items collected on the FIM \TM\ instrument. Thus, we are 
proposing to modify the IRF case-mix classification system to calculate 
IRF PPS payments correctly using the admission data items from the 
Quality Indicators section of the IRF-PAI. RTI considered a broad range 
of the data items in the Quality Indicators section of the IRF-PAI to 
identify the best predictors of IRF costs. These analyses examined all 
motor, cognitive, and additional items collected at admission to 
predict costs. The regression analysis indicated that the components of 
functional status that were found to best predict costs were the 
patient's motor function, a memory function, a communication function 
based on comprehension and expression, and age.
    The proposed motor items used to derive the additive motor score 
are eating, oral hygiene, toileting hygiene, shower bathe/self, upper 
body dressing, lower body dressing, putting on/taking off footwear, 
bladder continence, bowel continence, roll left and right, sit to 
lying, lying to sitting on side of bed, sit to stand, chair/bed-to-
chair transfer, toilet transfer, walk 10 feet, walk 50 feet with two 
turns, walk 150 feet, and 1 step (curb). The proposed item used to 
derive the memory score is the BIMS summary score, which is based on 
the repetition of three words, temporal orientation, and recall. The 
proposed communication score is derived from the hearing, speech, and 
vision items including expression of ideas and wants and understanding 
verbal and non-verbal content. We are proposing to incorporate a motor 
score, a memory score, a communication score, and age into the IRF 
case-mix classification system. Currently, the IRF case-mix system uses 
a weighted motor score and an unweighted cognitive score. We are not 
proposing to apply a weighting methodology to the motor score at this 
time. We are proposing to derive the scores for each respective group 
of the functional status items described above by calculating the sum 
of the items that constitute each functional status component. For a 
more detailed discussion of these analysis please refer to the 
technical report, ``Analyses to Inform the Potential Use of 
Standardized Patient Assessment Data Elements in the Inpatient 
Rehabilitation Facility Prospective Payment System,'' available at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Research.html.
    At this time, we believe that it is appropriate to utilize the 
admission data items located in the Quality Indicators section of the 
IRF-PAI, as described above, in place of the FIM \TM\ items to 
determine functional status, as the data items located in the Quality 
Indicators section are now available and collected by all IRF providers 
for purposes of the IRF QRP. We believe the proposed motor score, a 
memory score, a communication score, and age should compose the 
functional status scores in the IRF case-mix classification system, as 
our analysis determined these to be the best predictors of cost. The 
proposed removal of the FIM \TM\ instrument and the proposed 
incorporation of certain

[[Page 20991]]

items from the Quality Indicators section of the IRF-PAI to assign 
patients to CMGs support our efforts to reduce burden on providers. 
Additionally, the removal of the FIM \TM\ instrument and the 
incorporation of certain items from the Quality Indicators section of 
the IRF-PAI into the CMG case-mix system support our broader goal of 
standardizing assessment data collection across PAC settings.
    We are proposing to utilize certain data items located in the 
Quality Indicators section of the IRF-PAI, as described above, to 
generate the functional status scores that will be used to group 
patients into CMGs for payment purposes under the IRF PPS beginning in 
FY 2020.
    We invite public comments on the proposed use of certain data items 
located in the Quality Indicators section of the IRF-PAI, as described 
above, for payment purposes under the IRF PPS beginning with FY 2020, 
that is, for all IRF discharges beginning on or after October 1, 2019.
3. Proposed Updates to the Score Reassignment Methodology Beginning 
With FY 2020
    As previously noted, the data items located in the Quality 
Indicators section of the IRF-PAI utilize a different rating system 
than the FIM \TM\ instrument. There are several important differences 
to note regarding the rating systems for the data items from the 
Quality Indicators section of the IRF-PAI and the data contained in the 
FIM \TM\ instrument. First, the data items from the Quality Indicators 
section of the IRF-PAI are assessed based on a patient's usual 
performance during the assessment period in contrast to the FIM \TM\ 
items, which are assessed based on the patients lowest functional score 
during the assessment period. The data items from the Quality 
Indicators section of the IRF-PAI are generally assessed using a 6 
level rating scale for the self-care and mobility elements and a 4 
level scale for the cognitive elements. The FIM \TM\ data items use a 7 
level scale. Additionally, the FIM \TM\ scale includes a value of zero 
to indicate an activity did not occur or was not observed. The data 
items from the Quality Indicators section of the IRF-PAI utilize the 
following four codes to indicate why an activity did not occur: the 
patient refused to complete an activity (code 07), the patient did not 
perform this activity (code 09), the activity was not attempted due to 
environmental limitations (code 10), or the activity was not attempted 
due to a medical condition or safety concern (code 88).
    As the rating scale for the data items in the Quality Indicators 
section of the IRF-PAI captures multiple reasons an activity did not 
occur, we are proposing to modify the methodology currently used to 
reassign values indicating an activity did not occur or was not 
observed, when they are recorded on an item used for payment, beginning 
with FY 2020. Currently, when a code of 0 appears for one of the FIM 
\TM\ items on the IRF-PAI used to determine payment, the item is 
reassigned another value to determine the appropriate payment for the 
patient. In the FY 2002 IRF PPS final rule (66 FR 41316), we finalized 
a methodology to assign a code of 1 (indicating the patient needed 
total assistance) whenever the recorded code indicated that the 
activity did not occur. Subsequently, in the FY 2006 IRF PPS final 
rule, we revised this methodology to assign a value of 2 when the 
transfer to toilet item was coded with a zero value. For more 
information on the rationale behind this decision we refer readers to 
the 2006 IRF PPS final rule (70 FR 47896 through 47902). As the data 
items from the Quality Indicators section of the IRF-PAI now utilize 4 
values to indicate an activity did not occur and a dash to indicate 
``no information'', we are proposing to modify the reassignment 
methodology to incorporate the new codes. For the self-care and 
mobility items identified above, we are proposing to recode values of 
07, 09, 10, 88, and the presence of a dash (``-'') to 1, the most 
dependent level, except the toilet transfer item, which is recoded to 
2. These recodes are consistent with the current reassignment 
methodology rules. We are also proposing to change the way we treat 
specific values for the bowel continence and bladder continence items, 
as our analysis of these items and current coding guidelines indicate 
these changes are necessary. The bladder continence and bowel 
continence items utilize a different scale than the other function 
items and may capture clinical information that is not necessarily 
reflective of a patient's functional ability. For instance, the bladder 
continence scale includes the options ``no urine output'' or ``not 
applicable'' for cases where a patient may have renal failure or an 
indwelling catheter. A clinical review of these cases determined that 
patients for whom these values are coded are similar in terms of 
resource needs and costliness to patients for whom functional ability 
is captured. Based on this review, we are proposing to recode these 
values to be able to score the functional status of a patient when 
these values are coded on the IRF-PAI. For the bladder continence item, 
we are proposing to reassign a value of 1 (stress incontinence only) to 
0 (always continent), a value of 5 (no urine output) to 0 (always 
continent), and a value of 9 (not applicable) to 4 (always 
incontinent). For the bowel continence item, we are proposing to 
reassign a value of 9 (not rated) to 2 (frequently incontinent). For 
both items, we are proposing to reassign a missing score to 0 (always 
continent). We believe these changes are necessary to update the score 
reassignment methodology used to derive the functional status scores to 
reflect use of the new data items from the Quality Indicators section 
of the IRF-PAI and to accurately assign payments based on a patients' 
expected costliness.
    We welcome public comments on the proposed updates to the score 
reassignment methodology beginning with FY 2020, that is, for all IRF 
discharges beginning on or after October 1, 2019.
4. Proposed Refinements to the CMGs Beginning With FY 2020
    As previously noted, we are proposing to modify the methodology 
used to update the CMGs used to classify IRF patients for purposes of 
establishing payment amounts, beginning with FY 2020. We are proposing 
to implement revisions to the CMGs in a budget-neutral manner. As 
discussed in the FY 2006 IRF PPS final rule (70 FR 47886 through 
47887), the current CMGs were derived through Classification and 
Regression Trees (CART) analysis that incorporated a patient's 
functional status (motor score and cognitive score) and age into the 
construction of the CMGs. Under the IRF case-mix classification system, 
a patient's principal diagnosis or impairment is used to classify the 
patient into a RIC. Currently, there are 21 diagnosis-based RICs. The 
RICs are then further subdivided into 92 CMGs. Of the 92 CMGs, patients 
are assigned to 87 of the CMGs based on the patient's primary reason 
for rehabilitation care, age and functional status. There are also five 
special CMGs to account for very short stays and for patients who 
expire in the IRF.
    The CART method is useful in identifying statistical relationships 
among data and, using these relationships, constructing a predictive 
model for organizing and separating a large set of data into smaller, 
similar groups. CART ensures that the proposed CMGs recognize that 
patients with clinically distinct resource needs are appropriately 
grouped in the case-mix

[[Page 20992]]

classification system. CART is an iterative process that creates 
initial groups of patients then searches for ways to split the initial 
groups to further decrease the clinical and cost variances within a 
group and increase the explanatory power of the CMGs.
    As noted previously, the data items from the Quality Indicators 
section of the IRF-PAI contain slightly different information and 
utilize a different rating system than the items collected on the FIM 
\TM\ instrument. Thus, we have to update the IRF case-mix 
classification system to ensure that IRF PPS payments reflect as 
closely as possible the costs of care when we convert to using the 
admission data items from the Quality Indicators section of the IRF-
PAI. To convert from using the FIM \TM\ items to using the data items 
from the Quality Indicators section of the IRF-PAI, RTI first had to 
identify which quality indicator data items would be the best 
predictors of cost, as previously discussed. Then, RTI used CART 
analysis to modify the CMG definitions to reflect the use of the 
different assessment items.
    To develop CMGs based on the data items from the Quality Indicators 
section of the IRF-PAI, RTI used CART analysis to divide patients into 
payment groups based on similarities in their clinical characteristics 
and relative costs. As part of this analysis, RTI imposed certain 
restraints on these groupings to decrease the resulting number of CMGs 
(to ensure that the payment system did not become unduly complicated). 
For a more detailed discussion of these analyses or for more 
information on the development of the CMGs, we refer readers to the 
technical report, ``Analyses to Inform the Potential Use of 
Standardized Patient Assessment Data Elements in the Inpatient 
Rehabilitation Facility Prospective Payment System'', available at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Research.html.
    In developing the revised CMGs, RTI's analysis indicated that RIC 
16 and RIC 17 should incorporate the CMGs shown in Table 8, based on 
motor score and cognitive function, derived from the memory and 
communication scores.

               Table 8--CART-Based CMGs for RIC 16 (Pain Syndrome) and RIC 17 (Major Multiple Trauma Without Brain or Spinal Cord Injury)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 RIC                        CMG            Cases       Average Cost            Rule 1                   Rule 2               Rule 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
16..................................               1             255     $ 11,088.65  Motor >= 70............  .......................  ................
16..................................               2             270       13,402.22  Motor < 70.............  Motor >= 61............  ................
16..................................               3             188       14,775.04  Motor < 61.............  Cognition < 7..........  ................
16..................................               4             260       16,806.16  Motor < 61.............  Cognition >= 7.........  ................
17..................................               1            1149       12,911.91  Motor >= 62............  .......................  ................
17..................................               2            1557       15,504.35  Motor < 62.............  Motor >= 51............  ................
17..................................               3             624       17,273.01  Motor < 51.............  Motor >= 47............  ................
17..................................               4             927       19,209.23  Motor < 47.............  Motor >= 39............  ................
17..................................               5             289       20,245.80  Motor < 51.............  Motor < 39.............  Cognition < 8
17..................................               6             205       23,465.77  Motor < 51.............  Motor < 39.............  Cognition >= 8
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We considered proposing to revise the CMGs for RIC 16 and RIC 17 as 
shown above. However, these CMGs indicate higher costs for patients 
with no cognitive impairment as compared to those with any level of 
impairment. As this unexpected result may be driven by small sample 
size, we are proposing to combine CMG 03 and 04 for RIC 16 and to 
combine CMG 05 and 06 for RIC 17 as shown in Table 9.
    Table 9 contains the proposed new CMGs and their respective 
descriptions, including the functional status scores and age that we 
are proposing to use to classify discharges into CMGs. Table 9 also 
contains the proposed CMG relative weights and average length of stay 
values for the proposed CMGs. We are not proposing any changes to 
methodology used to determine the CMG relative weights that was 
finalized in the FY 2002 IRF final rule (66 FR 41351 through 41357) and 
revised in the FY 2009 IRF final rule (73 FR 46372 through 46374). For 
more information on the methodology used to calculate the CMG relative 
weights please refer to section III. of this proposed rule.

                      Table 9--Proposed Revised Relative Weights and Average Length of Stay Values for the Proposed Case-Mix Groups
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Relative weight                               Average length of stay
                                     CMG Description   -------------------------------------------------------------------------------------------------
               CMG                   (M=motor, A=age)                                    No comorbidity                                   No comorbidity
                                                          Tier 1     Tier 2     Tier 3        tier         Tier 1     Tier 2     Tier 3        tier
--------------------------------------------------------------------------------------------------------------------------------------------------------
0101.............................  Stroke M >= 77.....     1.0570     0.9232     0.8492          0.8050         11         11         10              10
0102.............................  Stroke M < 77 and M     1.3370     1.1678     1.0741          1.0182         13         13         12              12
                                    >= 68.
0103.............................  Stroke M < 68 and M     1.6848     1.4715     1.3535          1.2831         15         16         15              15
                                    >= 55.
0104.............................  Stroke M < 55 and M     2.1484     1.8764     1.7260          1.6361         19         20         19              19
                                    >= 47.
0105.............................  Stroke M < 47 and A     2.4137     2.1081     1.9391          1.8382         22         22         21              20
                                    >= 85.
0106.............................  Stroke M < 47 and A     2.7956     2.4417     2.2460          2.1291         26         27         24              23
                                    < 85.
0201.............................  Traumatic Brain         1.2418     1.0426     0.9376          0.8708         12         12         11              11
                                    Injury M >= 73.
0202.............................  Traumatic Brain         1.4929     1.2534     1.1272          1.0468         14         14         13              12
                                    Injury M < 73 and
                                    M >= 64.
0203.............................  Traumatic Brain         1.7699     1.4859     1.3363          1.2411         16         17         15              14
                                    Injury M < 64 and
                                    M >= 51.
0204.............................  Traumatic Brain         2.1753     1.8263     1.6424          1.5254         21         20         18              17
                                    Injury M < 51 and
                                    M >= 36.
0205.............................  Traumatic Brain         2.6959     2.2634     2.0355          1.8904         36         24         22              19
                                    Injury M < 36.
0301.............................  Non-Traumatic Brain     1.2192     1.0096     0.9348          0.8735         11         11         11              10
                                    Injury M >= 70.
0302.............................  Non-Traumatic Brain     1.5403     1.2755     1.1810          1.1034         14         14         13              13
                                    Injury M < 70 and
                                    M >= 57.

[[Page 20993]]

 
0303.............................  Non-Traumatic Brain     1.8496     1.5316     1.4182          1.3251         17         16         15              15
                                    Injury M < 57 and
                                    M >= 45.
0304.............................  Non-Traumatic Brain     2.0666     1.7113     1.5846          1.4806         20         18         17              16
                                    Injury M < 45 and
                                    A >= 79.
0305.............................  Non-Traumatic Brain     2.2755     1.8843     1.7447          1.6302         21         21         18              17
                                    Injury M < 45 and
                                    A < 79.
0401.............................  Traumatic Spinal        1.2999     1.0952     1.0122          0.9370         13         12         12              11
                                    Cord Injury M >=
                                    64.
0402.............................  Traumatic Spinal        1.6630     1.4011     1.2949          1.1987         15         15         15              14
                                    Cord Injury M < 64
                                    and M >= 57.
0403.............................  Traumatic Spinal        1.9672     1.6574     1.5318          1.4180         15         18         17              16
                                    Cord Injury M < 57
                                    and M >= 46.
0404.............................  Traumatic Spinal        2.6209     2.2082     2.0408          1.8892         25         24         23              21
                                    Cord Injury M < 46
                                    and M >= 36.
0405.............................  Traumatic Spinal        3.1923     2.6895     2.4857          2.3010         34         29         27              24
                                    Cord Injury M < 36
                                    and A < 63.
0406.............................  Traumatic Spinal        3.6963     3.1142     2.8782          2.6643         46         34         28              29
                                    Cord Injury M < 36
                                    and A >= 63.
0501.............................  Non-Traumatic           1.1291     0.9068     0.8382          0.7642         10         11         10               9
                                    Spinal Cord Injury
                                    M >= 75.
0502.............................  Non-Traumatic           1.4096     1.1322     1.0464          0.9541         14         13         12              11
                                    Spinal Cord Injury
                                    M < 75 and M >= 63.
0503.............................  Non-Traumatic           1.7905     1.4381     1.3292          1.2119         16         15         15              14
                                    Spinal Cord Injury
                                    M < 63 and M >= 52.
0504.............................  Non-Traumatic           2.2191     1.7823     1.6473          1.5020         21         19         18              17
                                    Spinal Cord Injury
                                    M < 52 and M >= 44.
0505.............................  Non-Traumatic           2.8377     2.2792     2.1065          1.9206         27         24         22              21
                                    Spinal Cord Injury
                                    M < 44.
0601.............................  Neurological M >=       1.3205     1.0500     0.9795          0.8873         12         12         11              10
                                    69.
0602.............................  Neurological M < 69     1.6324     1.2981     1.2109          1.0969         14         14         13              13
                                    and M >= 57.
0603.............................  Neurological M < 57     1.9170     1.5244     1.4220          1.2882         16         16         15              14
                                    and M >= 47.
0604.............................  Neurological M < 47     2.2218     1.7667     1.6481          1.4929         20         18         17              16
0701.............................  Fracture of Lower       1.1960     0.9851     0.9487          0.8595         11         11         11              10
                                    Extremity M >= 67.
0702.............................  Fracture of Lower       1.5308     1.2608     1.2142          1.1001         14         14         14              13
                                    Extremity M < 67
                                    and M >= 55.
0703.............................  Fracture of Lower       1.8510     1.5245     1.4682          1.3302         17         17         16              15
                                    Extremity M < 55
                                    and M >= 45.
0704.............................  Fracture of Lower       2.0790     1.7124     1.6491          1.4941         18         18         18              17
                                    Extremity M < 45.
0801.............................  Replacement of          1.0475     0.8892     0.8044          0.7437         10         10          9               9
                                    Lower Extremity
                                    Joint M >= 67.
0802.............................  Replacement of          1.2925     1.0972     0.9926          0.9176         12         12         11              11
                                    Lower Extremity
                                    Joint M < 67 and M
                                    >= 56.
0803.............................  Replacement of          1.5469     1.3132     1.1880          1.0982         15         15         13              12
                                    Lower Extremity
                                    Joint M < 56 and M
                                    >= 47.
0804.............................  Replacement of          1.8517     1.5719     1.4220          1.3146         16         17         15              15
                                    Lower Extremity
                                    Joint M < 47.
0901.............................  Other Orthopedic M      1.1749     0.9376     0.8792          0.8083         11         11         10              10
                                    >= 69.
0902.............................  Other Orthopedic M      1.5103     1.2052     1.1302          1.0390         13         14         13              12
                                    < 69 and M >= 55.
0903.............................  Other Orthopedic M      1.8117     1.4457     1.3557          1.2463         15         16         15              14
                                    < 55 and M >= 47.
0904.............................  Other Orthopedic M      2.0393     1.6273     1.5261          1.4029         17         17         16              16
                                    < 47.
1001.............................  Amputation Lower        1.3231     1.1340     1.0276          0.9487         12         13         12              11
                                    Extremity M >= 67.
1002.............................  Amputation Lower        1.6372     1.4032     1.2715          1.1739         15         15         14              14
                                    Extremity M < 67
                                    and M >= 59.
1003.............................  Amputation Lower        1.8961     1.6251     1.4726          1.3596         17         16         16              15
                                    Extremity M < 59
                                    and M >= 49.
1004.............................  Amputation Lower        2.1617     1.8527     1.6788          1.5500         19         20         18              17
                                    Extremity M < 49.
1101.............................  Amputation Non-         1.8322     1.3022     1.3022          1.0585         15         14         13              12
                                    Lower Extremity.
1201.............................  Osteoarthritis M >=     1.3071     1.0757     0.9575          0.8777         11         12         11              11
                                    65.
1202.............................  Osteoarthritis M <      1.6787     1.3816     1.2297          1.1273         14         15         14              13
                                    65 and M >= 49.
1203.............................  Osteoarthritis M <      1.9145     1.5756     1.4024          1.2857         16         16         16              15
                                    49.
1301.............................  Rheumatoid Other        1.1111     0.9753     0.9076          0.8570         10         11         10              11
                                    Arthritis M >= 69.
1302.............................  Rheumatoid Other        1.3176     1.1567     1.0764          1.0164         12         13         12              12
                                    Arthritis M < 69
                                    and M >= 58.
1303.............................  Rheumatoid Other        1.6691     1.4652     1.3635          1.2875         13         17         14              14
                                    Arthritis M < 58
                                    and A >= 72.
1304.............................  Rheumatoid Other        1.7642     1.5487     1.4412          1.3609         14         17         15              15
                                    Arthritis M < 58
                                    and A < 72.
1401.............................  Cardiac M >= 70....     1.1839     0.9920     0.8991          0.8023         11         11         10               9
1402.............................  Cardiac M < 70 and      1.4635     1.2263     1.1115          0.9918         13         13         12              11
                                    M >= 59.
1403.............................  Cardiac M < 59 and      1.7034     1.4272     1.2936          1.1544         15         15         14              13
                                    M >= 51.
1404.............................  Cardiac M < 51.....     1.9704     1.6510     1.4964          1.3353         18         17         16              14
1501.............................  Pulmonary M >= 84..     1.0149     0.9214     0.8346          0.7907          7         10          9               9
1502.............................  Pulmonary M < 84        1.2323     1.1187     1.0133          0.9601         11         12         11              10
                                    and M >= 74.

[[Page 20994]]

 
1503.............................  Pulmonary M < 74        1.4557     1.3215     1.1970          1.1341         13         13         12              12
                                    and M >= 59.
1504.............................  Pulmonary M < 59        1.7464     1.5853     1.4360          1.3606         15         15         14              14
                                    and M >= 46.
1505.............................  Pulmonary M < 46...     2.0273     1.8404     1.6670          1.5794         20         17         15              16
1601.............................  Pain Syndrome M >=      1.2293     0.9242     0.8776          0.7774         10         11         10              10
                                    70.
1602.............................  Pain Syndrome M <       1.5216     1.1439     1.0863          0.9622         12         12         12              11
                                    70 and M >= 61.
1603.............................  Pain Syndrome M <       1.8391     1.3826     1.3129          1.1630         13         15         14              13
                                    61.
1701.............................  Major Multiple          1.4355     1.1154     1.0668          0.9504         14         13         12              11
                                    Trauma Without
                                    Brain or Spinal
                                    Cord Injury M >=
                                    62.
1702.............................  Major Multiple          1.7939     1.3938     1.3330          1.1876         16         15         15              14
                                    Trauma Without
                                    Brain or Spinal
                                    Cord Injury M < 62
                                    and M >= 51.
1703.............................  Major Multiple          2.0059     1.5585     1.4906          1.3280         17         16         16              15
                                    Trauma Without
                                    Brain or Spinal
                                    Cord Injury M < 51
                                    and M >= 47.
1704.............................  Major Multiple          2.1848     1.6975     1.6236          1.4465         19         18         17              16
                                    Trauma Without
                                    Brain or Spinal
                                    Cord Injury M < 47
                                    and M >= 39.
1705.............................  Major Multiple          2.4250     1.8841     1.8020          1.6055         21         21         19              17
                                    Trauma Without
                                    Brain or Spinal
                                    Cord Injury M < 39.
1801.............................  Major Multiple          1.1980     1.0351     0.8752          0.8233         13         11         10              10
                                    Trauma With Brain
                                    or Spinal Cord
                                    Injury M >= 72.
1802.............................  Major Multiple          1.5335     1.3250     1.1204          1.0539         14         16         12              12
                                    Trauma With Brain
                                    or Spinal Cord
                                    Injury M < 72 and
                                    M >= 58.
1803.............................  Major Multiple          2.0608     1.7806     1.5056          1.4162         23         19         16              16
                                    Trauma With Brain
                                    or Spinal Cord
                                    Injury M < 58 and
                                    M >= 42.
1804.............................  Major Multiple          2.9220     2.5248     2.1348          2.0081         34         25         23              22
                                    Trauma With Brain
                                    or Spinal Cord
                                    Injury M < 42.
1901.............................  Guillain-               1.5211     1.2331     1.1228          1.0834         16         15         12              13
                                    Barr[eacute] M >=
                                    54.
1902.............................  Guillain-               3.4558     2.8014     2.5507          2.4613         39         28         27              27
                                    Barr[eacute] M <
                                    54.
2001.............................  Miscellaneous M >=      1.2339     1.0047     0.9349          0.8447         11         11         10              10
                                    70.
2002.............................  Miscellaneous M <       1.5240     1.2410     1.1547          1.0433         14         13         12              12
                                    70 and M >= 58.
2003.............................  Miscellaneous M <       1.7837     1.4525     1.3515          1.2211         16         15         14              14
                                    58 and M >= 49.
2004.............................  Miscellaneous M <       2.0373     1.6589     1.5436          1.3947         19         17         16              15
                                    49.
2101.............................  Burns..............     1.9058     1.5390     1.5118          1.3015         22         16         16              14
5001.............................  Short-stay cases,    .........  .........  .........          0.1801  .........  .........  .........               3
                                    length of stay is
                                    3 days or fewer.
5101.............................  Expired,             .........  .........  .........          0.6240  .........  .........  .........               7
                                    orthopedic, length
                                    of stay is 13 days
                                    or fewer.
5102.............................  Expired,             .........  .........  .........          1.7071  .........  .........  .........              18
                                    orthopedic, length
                                    of stay is 14 days
                                    or more.
5103.............................  Expired, not         .........  .........  .........          0.6795  .........  .........  .........               7
                                    orthopedic, length
                                    of stay is 15 days
                                    or fewer.
5104.............................  Expired, not         .........  .........  .........          2.1069  .........  .........  .........              21
                                    orthopedic, length
                                    of stay is 16 days
                                    or more.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The following would be the most significant differences between the 
current CMGs and the proposed revised CMGs:
     There would be fewer CMGs than before (88 instead of 92 
currently).
     There would be fewer CMGs in RICs 1, 2, 5, 8, 11, and 19, 
while there would be more CMGs in RICs 3, 4, 10, 13, 15, 17, and 18.
     A patient's age would affect assignment for CMGs in RICs 
1, 3, 4, and 13 whereas it currently affects assignment for CMGs in 
RICs 1, 4, and 8.
    We are proposing to utilize the CMGs based on the data items from 
the Quality Indicators section of the IRF-PAI to classify IRF patients 
for purposes of establishing payment under the IRF PPS beginning with 
FY 2020. We are proposing to implement these revisions in a budget 
neutral manner. For more information on the specific impacts of this 
proposal, we refer readers to Table 10. We are also proposing to update 
the CMG relative weights and average length of stay values associated 
with the proposed CMGs based on the data items from the Quality 
Indicators section of the IRF-PAI. We believe it is appropriate to 
update the CMGs and relative weights for FY 2020 to better align IRF 
payments with the costs of caring for IRF patients, given the new 
information that is captured by the data items from the Quality 
Indicators section of the IRF-PAI. Additionally, changes in treatment 
patterns, technology, case-mix, and other factors affecting the 
relative use of resources in IRFs since the current CMGs were last 
revised, likely require an update to the classification system.

[[Page 20995]]



                      TABLE 10--Distributional Effects of the Proposed Changes to the CMGs
----------------------------------------------------------------------------------------------------------------
                     Facility classification                      Number of IRFs     Number of    Percent Change
---------------------------------------------------------------------------------      Cases          in Mean
                                                                                 ----------------     Payment
                               (1)                                      (2)                      ---------------
                                                                                        (3)             (4)
----------------------------------------------------------------------------------------------------------------
Total...........................................................           1,111         369,684               0
Urban unit......................................................             702         155,121               3
Rural unit......................................................             133          20,074               3
Urban hospital..................................................             265         190,431              -2
Rural hospital..................................................              11           4,058              -1
Urban For-Profit................................................             339         185,702              -2
Rural For-Profit................................................              37           7,388               2
Urban Non-Profit................................................             529         137,321               2
Rural Non-Profit................................................              84          13,338               2
Urban Government................................................              99          22,529               3
Rural Government................................................              23           3,406               4
Urban...........................................................             967         345,552               0
Rural...........................................................             144          24,132               2
Urban by region:
    Urban New England...........................................              29          15,514              -2
    Urban Middle Atlantic.......................................             134          48,194              -2
    Urban South Atlantic........................................             144          69,040               0
    Urban East North Central....................................             173          46,132               3
    Urban East South Central....................................              56          24,250              -1
    Urban West North Central....................................              73          18,333               0
    Urban West South Central....................................             180          75,717              -1
    Urban Mountain..............................................              81          26,683              -1
    Urban Pacific...............................................              97          21,689               4
Rural by region:
    Rural New England...........................................               4           1,048              -6
    Rural Middle Atlantic.......................................              11           1,244               3
    Rural South Atlantic........................................              16           3,491              -1
    Rural East North Central....................................              21           3,599               2
    Rural East South Central....................................              21           4,174               4
    Rural West North Central....................................              21           2,829               2
    Rural West South Central....................................              40           6,765               4
    Rural Mountain..............................................               7             722               4
    Rural Pacific...............................................               3             260               2
Teaching status:
    Non-teaching................................................             842         303,102              -1
    Teaching....................................................             269          66,582               2
Bed Size:
    < 25........................................................             563          85,835               3
    25-49.......................................................             314         107,858               1
    50-74.......................................................             134          85,923              -1
    75-99.......................................................              58          48,564              -2
    100-124.....................................................              19          14,527              -2
    125+........................................................              23          26,977              -1
----------------------------------------------------------------------------------------------------------------

    Table 10 shows how we estimate that the application of the proposed 
revisions to the case-mix system for FY 2020 would affect particular 
groups. Table 10 categorizes IRFs by geographic location, including 
urban or rural location, and location for CMS's 9 Census divisions of 
the country. In addition, the table divides IRFs into those that are 
separate rehabilitation hospitals (otherwise called freestanding 
hospitals in this section), those that are rehabilitation units of a 
hospital (otherwise called hospital units in this section), rural or 
urban facilities, ownership (otherwise called for-profit, non-profit, 
and government), by teaching status, and bed size. The proposed changes 
to the case-mix classification system are expected to affect the 
overall distribution of payments across CMGs. Note that, because we 
propose to implement the revisions to the case-mix classification 
system in a budget-neutral manner, total estimated aggregate payments 
to IRFs would not be affected as a result of the proposed revisions to 
the CMGs. However, these proposed revisions may affect the distribution 
of payments across CMGs.
    We invite public comment on the proposed refinements to the CMGs 
beginning with FY 2020, that is, for all discharges beginning on or 
after October 1, 2019.

VIII. Proposed Revisions to Certain IRF Coverage Requirements Beginning 
With FY 2019

    We are committed to transforming the health care delivery system, 
and the Medicare program, by putting an additional focus on patient-
centered care and working with providers and physicians to improve 
patient outcomes. As an agency, we recognize it is imperative that we 
develop and implement policies that allow providers and physicians to 
focus the majority of their time treating patients rather than 
completing paperwork. Moreover, we believe it is essential for us to 
reexamine current regulations and administrative requirements, to 
assure that we are not

[[Page 20996]]

placing unnecessary burden on providers.
    We believe the agency initiative of treating patients over 
paperwork will improve patient outcomes, decrease provider costs, and 
ensure that patients and providers are making the best heath care 
choices possible. In the FY 2018 IRF PPS proposed rule (82 FR 20743), 
we included a request for information (RFI) to solicit comments from 
stakeholders requesting information on CMS flexibilities and 
efficiencies. The purpose of the RFI was to receive feedback regarding 
ways in which we could reduce burden for hospitals and physicians, 
improve quality of care, decrease costs and ensure that patients 
receive the best care. We received comments from IRF industry 
associations, state and national hospital associations, industry groups 
representing hospitals, and individual IRF providers in response to the 
solicitation. We are appreciative of the feedback. As discussed in more 
detail in each of the proposals below, we are in some cases using the 
commenters' specific suggestions to propose changes to regulatory 
requirements to alleviate provider burden. In other cases, however, we 
are proposing additional changes to the regulatory requirements that we 
believe will be responsive to stakeholder feedback and helpful to 
providers in reducing administrative burden.
    In the FY 2010 IRF PPS final rule (74 FR 39788 through 39798), we 
updated the IRF coverage criteria requirements to reflect changes that 
had occurred in medical practice since the IRF PPS was first 
implemented in 2002. IRF care is only considered by Medicare to be 
reasonable and necessary under section 1862(a)(1) of the Act if the 
patient meets all of the IRF coverage requirements outlined in Sec.  
412.622(a)(3), (4), and (5). Failure to meet the IRF coverage criteria 
in a particular case will result in denial of the IRF claim. The IRF 
coverage requirements have not been updated since they became effective 
on January 1, 2010. To reduce unnecessary burden on IRF providers and 
physicians, we are proposing to revise the current IRF coverage 
criteria as suggested by some of the comments received in response to 
the RFI. Specifically, we are focused on reducing documentation 
requirements that we believe have become overly burdensome to IRF 
providers over time.

A. Proposed Changes to the Physician Supervision Requirement Beginning 
With FY 2019

    In response to the RFI, several commenters suggested that we 
consider decreasing the number of required weekly face-to-face visits 
that the rehabilitation physician must complete. Commenters suggested 
that the decrease in visits would not only assist with reducing the 
documentation burden on rehabilitation physicians, but it would also 
afford the rehabilitation physician more time to focus on higher-
acuity, more complex patients resulting in improved outcomes and lower 
readmission rates. Additionally, we received comments suggesting that 
we consider either eliminating the post-admission physician evaluation 
altogether in an effort to reduce paperwork and duplicative 
requirements or that we allow the post-admission physician evaluation 
to count as one of the required face-to-face visits completed by the 
rehabilitation physician. We agree with the commenters and are 
proposing to move forward with a combination of these two suggested 
ideas in order to reduce unnecessary burden on rehabilitation 
physicians.
    Under Sec.  412.622(a)(3)(iv), for an IRF claim to be considered 
reasonable and necessary under section 1862(a)(1) of the Act, there 
must be a reasonable expectation at the time of the patient's admission 
to the IRF that the patient requires physician supervision by a 
rehabilitation physician, defined as a licensed physician with 
specialized training and experience in inpatient rehabilitation. The 
requirement for medical supervision means that the rehabilitation 
physician must conduct face-to-face visits with the patient at least 3 
days per week throughout the patient's stay in the IRF to assess the 
patient both medically and functionally, as well as modify the course 
of treatment as needed to maximize the patient's capacity to benefit 
from the rehabilitation process. Under Sec.  412.622(a)(4)(ii), to 
document that each patient for whom the IRF seeks payment is reasonably 
expected to meet all of the requirements in Sec.  412.622(a)(3) at the 
time of admission, the patient's medical record at the IRF must contain 
a post-admission physician evaluation that meets all of the 
requirements specified in the regulation. For more information, we 
refer readers to the Medicare Benefit Policy Manual, chapter 1, 
sections 110.1.2 and 110.2.4 (Pub. 100-02), which can be downloaded 
from the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs.html.
    While the purpose of the physician supervision requirement is to 
ensure that the patient's medical and functional statuses are being 
continuously monitored as the patient's overall plan of care is being 
carried out, the purpose of the post-admission physician evaluation is 
to document the patient's status on admission, identify any relevant 
changes that may have occurred since the preadmission screening, and 
provide the rehabilitation physician with the necessary information to 
begin development of the patient's overall plan of care. When the 
coverage criteria were initially implemented, we believed that the 
post-admission physician evaluation should not be used as a way to 
fulfill one of the face-to-face visits required under Sec.  
412.622(a)(3)(iv) because we considered them to be different types of 
assessments. We also believed it was in the patient's best interest to 
be seen by a rehabilitation physician at least four times in the first 
week of the IRF admission when the patient is in the most critical 
phase of their recovery process.
    While we continue to believe that the post-admission physician 
evaluation and the face-to-face physician visits are two different 
types of assessments, after reevaluating these coverage criteria, we 
believe that the rehabilitation physician should have the flexibility 
to assess the patient and conduct the post-admission physician 
evaluation during one of the three face-to-face physician visits 
required in the first week of the IRF admission. Additionally, based on 
the comments that we received in response to the RFI, we believe that 
it should be the responsibility of the rehabilitation physician to use 
his or her best clinical judgment to determine whether the patient 
needs to be seen more than three times in the first week of the IRF 
admission. Therefore, allowing these two requirements to be met 
concurrently would reduce redundancy and regulatory burden while still 
ensuring adequate care to the patient.
    Therefore, we are proposing to modify Sec.  412.622(a)(3)(iv) to 
provide that the post-admission physician evaluation required under 
Sec.  412.622(a)(4)(ii) may count as one of the face-to-face physician 
visits required under Sec.  412.622(a)(3)(iv) beginning with FY 2019, 
that is, for all IRF discharges beginning on or after October 1, 2018. 
To clarify, we are not proposing to modify Sec.  412.622(a)(4)(ii), 
including the 24-hour timeframe within which the post-admission 
physician evaluation requirement must be completed.
    We invite public comment on our proposal to modify Sec.  
412.622(a)(3)(iv) to provide that the post-admission physician 
evaluation required under Sec.  412.622(a)(4)(ii) may count as one of 
the face-to-face physician visits required under Sec.  
412.622(a)(3)(iv) beginning with

[[Page 20997]]

FY 2019, that is, for all IRF discharges beginning on or after October 
1, 2018.

B. Proposed Changes to the Interdisciplinary Team Meeting Requirement 
Beginning With FY 2019

    Under Sec.  412.622(a)(5), for an IRF claim to be considered 
reasonable and necessary under section 1862(a)(1) of the Act, the 
patient must require an interdisciplinary team approach to care, as 
evidenced by documentation in the patient's medical record of weekly 
interdisciplinary team meetings that meet all of the requirements 
specified in the regulation. Among those requirements are that the team 
meetings must be led by a rehabilitation physician and that the results 
and findings of the team meetings, and the concurrence by the 
rehabilitation physician with those results and findings, are retained 
in the patient's medical record. For more information, we refer readers 
to the Medicare Benefit Policy Manual, chapter 1, section 110.2.5 (Pub. 
100-02), which can be downloaded from the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs.html.
    We understand that it may occasionally be difficult for the 
rehabilitation physician to be physically present in the team meetings 
and for that reason we have always instructed providers that the 
rehabilitation physician may participate in the interdisciplinary team 
meetings by telephone as long as it is clearly demonstrated in the 
documentation of the IRF medical record that the meeting was led by the 
rehabilitation physician. However, with the advancements in technology 
since the inception of the IRF coverage criteria in 2010, we believe it 
is appropriate to allow rehabilitation physicians to lead the meeting 
remotely via another mode of communication, such as video or telephone 
conferencing. Therefore, we are proposing to amend Sec.  
412.622(a)(5)(A) to expressly provide that the rehabilitation physician 
may lead the interdisciplinary meeting remotely without any additional 
documentation requirements. We believe this proposed change will allow 
time management flexibility and convenience for all rehabilitation 
physicians, especially those located in rural areas who may need to 
travel greater distances between facilities. At this time, we are 
proposing for this change to apply only to the rehabilitation physician 
and not the other required interdisciplinary team meeting attendees to 
give IRFs time to adapt to this proposed change. However, we may 
consider expanding this policy to include other interdisciplinary team 
meeting attendees in future rulemaking.
    Therefore, we are proposing to amend Sec.  412.622(a)(5)(A) to 
expressly provide that the rehabilitation physician may lead the 
interdisciplinary meeting remotely without any additional documentation 
requirements. We believe that other communication modes such as video 
and telephone conferencing are acceptable ways of leading the 
interdisciplinary team meeting. Please note that the requirement that 
the rehabilitation physician must lead the interdisciplinary team 
meeting will remain the same.
    We invite public comment on our proposal to amend Sec.  
412.622(a)(5)(A) to expressly provide that the rehabilitation physician 
may lead the interdisciplinary team meeting remotely without additional 
documentation requirements.

C. Proposed Changes to the Admission Order Documentation Requirement 
Beginning With FY 2019

    In response to the RFI, several commenters suggest that in general, 
we should consider eliminating duplicative requirements. Commenters 
stated that duplicative requirements placed unnecessary administrative 
burden on facilities trying to make sure they comply with each nuance 
of each requirement. We agree with the commenters and for that reason 
we are proposing to remove Sec.  412.606(a) as we believe that IRFs are 
already required to fulfill this requirement under Sec. Sec.  
482.12(c), 482.24(c), and 412.3.
    Under Sec.  412.606(a), at the time that each Medicare Part A FFS 
patient is admitted, the IRF must have physician orders for the 
patient's care during the time the patient is hospitalized. For more 
information, we refer readers to the Medicare Benefit Policy Manual, 
chapter 1, section 110.1.4 (Pub. 100-02), which can be downloaded from 
the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs.html.
    Additionally, under Sec.  412.3(a) of the hospital payment 
requirements, for the purposes of payment under Medicare Part A, an 
individual is considered an inpatient of a hospital, including a 
critical access hospital, if formally admitted as an inpatient under an 
order for inpatient admission by a physician or other qualified 
practitioner in accordance with Sec. Sec.  412.3, 482.24(c), 482.12(c), 
and 485.638(a)(4)(iii) for a critical access hospital.
    In an effort to reduce duplicative requirements, we believe that if 
we remove the admission order documentation requirement at Sec.  
412.606(a), this requirement would continue to be appropriately 
addressed through the enforcement of Sec.  482.12(c) and Sec.  
482.24(c) of the hospital conditions of participation (CoPs), as well 
as the hospital admission order payment requirements at Sec.  412.3. 
IRFs are responsible for meeting all of the inpatient hospital CoPs and 
the hospital admission order payment requirements at Sec.  412.3, and, 
therefore, we believe that by removing the admission order 
documentation requirement at Sec.  412.606(a), we would be reducing 
both regulatory redundancy as well as administrative burden.
    Therefore, we are proposing to amend Sec.  412.606(a) to remove the 
admission order documentation requirement beginning with FY 2019, that 
is, for all IRF discharges beginning on or after October 1, 2018. IRFs 
would continue to meet the requirements at Sec. Sec.  482.12(c), 
482.24(c), and 412.3.
    We invite public comment on our proposal to amend Sec.  412.606(a) 
to remove the admission order documentation requirement beginning with 
FY 2019, that is, for all IRF discharges beginning on or after October 
1, 2018.

D. Solicitation of Comments Regarding Additional Changes to the 
Physician Supervision Requirement

    As discussed in section VIII.A of this proposed rule, under Sec.  
412.622(a)(3)(iv), for an IRF claim to be considered reasonable and 
necessary under section 1862(a)(1) of the Act, there must be a 
reasonable expectation at the time of the patient's admission to the 
IRF that the patient requires physician supervision by a rehabilitation 
physician, defined as a licensed physician with specialized training 
and experience in inpatient rehabilitation. The requirement for medical 
supervision means that the rehabilitation physician must conduct face-
to-face visits with the patient at least 3 days per week throughout the 
patient's stay in the IRF to assess the patient both medically and 
functionally, as well as to modify the course of treatment as needed to 
maximize the patient's capacity to benefit from the rehabilitation 
process. For more information, we refer readers to the Medicare Benefit 
Policy Manual, chapter 1, section 110.2.4 (Pub. 100-02), which can be 
downloaded from the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs.html.
    When the IRF coverage criteria were initially implemented in 2010, 
we

[[Page 20998]]

believed that the rehabilitation physician visits should be completed 
face-to-face to ensure that the patient receives the most comprehensive 
in-person care by a rehabilitation physician throughout the IRF stay.
    As part of our efforts to assist in reducing unnecessary regulatory 
burden on IRFs, this is an issue we would like to further explore. We 
are interested in soliciting public comments on whether the 
rehabilitation physician should have the flexibility to determine that 
some of the IRF visits can be appropriately conducted remotely via 
another mode of communication, such as video or telephone conferencing. 
Given the level of complexity of IRF patients, we have some concerns 
about whether this approach would have an impact on the quality of care 
provided to IRF patients. To maintain the hospital level of care that 
IRF patients require, we would continue to expect that the majority of 
IRF physician visits would continue to be performed face-to-face. 
However, we are interested in feedback from stakeholders on whether we 
should allow a limited number of visits to be conducted remotely. In 
order to better assist us in balancing the needs of the patient, as 
well as retaining the hospital level quality of care provided in an IRF 
with the goal of reducing the regulatory burden on rehabilitation 
physicians, we are seeking feedback from stakeholders about potentially 
amending the face-to-face visit requirement for rehabilitation 
physicians. Specifically, we would appreciate feedback regarding the 
following:
     Do stakeholders believe that the rehabilitation physician 
would be able to fully assess both the medical and functional needs and 
progress of the patient remotely?
     Would this assist facilities in rural areas where it may 
be difficult to employ an abundance of physicians?
     Do stakeholders believe that assessing the patient 
remotely would affect the quality or intensity of the physician visit 
in any way?
     How many and what types of visits do stakeholders believe 
should be able to be performed remotely?
     From an operational standpoint, how would the remote visit 
work?
     What type of clinician would need to be present in the 
room with the patient while the rehabilitation physician was in a 
remote location?
    Thus, to assist us in generating ideas and information for 
analyzing potential refinements in this area, we are seeking feedback 
from stakeholders on whether the rehabilitation physician should have 
the flexibility to determine that some of the IRF visits can be 
appropriately conducted remotely via another mode of communication, 
such as video or telephone conferencing, while maintaining a hospital 
level high quality of care for IRF patients.

E. Solicitation of Comments Regarding Changes to the Use of Non-
Physician Practitioners in Meeting the Requirements Under Sec.  
412.622(a)(3), (4), and (5)

    Several of the requirements under Sec.  412.622(a)(3), (4), and (5) 
require documentation that a rehabilitation physician, defined as a 
licensed physician with specialized training and experience in 
inpatient rehabilitation, visited each patient admitted to an IRF and 
performed an assessment of the patient. For example, under Sec.  
412.622(a)(3)(iv), for an IRF claim to be considered reasonable and 
necessary under section 1862(a)(1) of the Act, there must be a 
reasonable expectation at the time of the patient's admission to the 
IRF that the patient requires physician supervision by a rehabilitation 
physician. The requirement for medical supervision means that the 
rehabilitation physician must conduct face-to-face visits with the 
patient at least 3 days per week throughout the patient's stay in the 
IRF to assess the patient both medically and functionally, as well as 
to modify the course of treatment as needed to maximize the patient's 
capacity to benefit from the rehabilitation process. For more 
information, please refer to the Medicare Benefit Policy Manual, 
chapter 1, section 110.2.4 (Pub. 100-02), which can be downloaded from 
the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs.html.
    In addition, under Sec.  412.622(a)(4)(ii), to document that each 
patient for whom the IRF seeks payment is reasonably expected to meet 
all of the requirements in Sec.  412.622(a)(3) at the time of 
admission, the patient's medical record at the IRF must contain a post-
admission physician evaluation that must, among other requirements, be 
completed by a rehabilitation physician within 24 hours of the 
patient's admission to the IRF. For more information, we refer readers 
to the Medicare Benefit Policy Manual, chapter 1, section 110.1.2 (Pub. 
100-02), which can be downloaded from the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs.html.
    In the feedback that we received in response to the RFI, it was 
suggested that we consider amending the requirements in Sec.  
412.622(a)(3)(iv) and Sec.  412.622(a)(4)(ii) to enable IRFs to expand 
their use of non-physician practitioners (physician assistants and 
nurse practitioners) to fulfill some of the requirements that 
rehabilitation physicians are currently required to complete. The 
commenters suggested that expanding the use of non-physician 
practitioners in meeting some of the IRF requirements would ease the 
documentation burden on rehabilitation physicians.
    In exploring this issue, we have questions about whether non-
physician practitioners have the specialized training in inpatient 
rehabilitation that would enable them to adequately assess the 
interaction between patients' medical and functional care needs in an 
IRF. Another concern that has been raised regarding this issue, is 
whether IRF patients will continue to receive the hospital level and 
quality of care that is necessary to treat such complex conditions.
    To better assist us in balancing the needs of the patient with the 
desire to reduce the regulatory burden on rehabilitation physicians, we 
are seeking feedback from stakeholders about potentially allowing IRFs 
to expand their use of non-physician practitioners to fulfill some of 
the requirements that rehabilitation physicians are currently required 
to complete. Specifically, we would appreciate feedback regarding the 
following:
     Do non-physician practitioners have the specialized 
training in rehabilitation that they need to have to assess IRF 
patients both medically and functionally?
     How would the non-physician practitioner's credentials be 
documented and monitored to ensure that IRF patients are receiving high 
quality care?
     Are non-physician practitioners required to do rotations 
in inpatient rehabilitation facilities as part of their training, or 
could this be added to their training programs in the future?
     Do stakeholders believe that utilizing non-physician 
practitioners to fulfill some of the requirements that are currently 
required to be completed by a rehabilitation physician would have an 
impact of the quality of care for IRF patients?
    Thus, to assist us in generating ideas and information for 
analyzing potential refinements in this area, we are seeking feedback 
from stakeholders on the ways in which the role of non-physician 
practitioners could be expanded in the IRF setting while maintaining a 
hospital

[[Page 20999]]

level high quality of care for IRF patients.

IX. Proposed Revisions and Updates to the IRF Quality Reporting Program 
(QRP)

A. Background

    The Inpatient Rehabilitation Facility Quality Reporting Program 
(IRF QRP) is authorized by section 1886(j)(7) of the Act, and it 
applies to freestanding IRFs, as well as inpatient rehabilitation units 
of hospitals or critical access hospitals (CAHs) paid by Medicare under 
the IRF PPS. Under the IRF QRP, the Secretary reduces the annual 
increase factor for discharges occurring during such fiscal year by 2 
percentage points for any IRF that does not submit data in accordance 
with the requirements established by the Secretary. For more 
information on the background and statutory authority for the IRF QRP, 
we refer readers to the FY 2012 IRF PPS final rule (76 FR 47873 through 
47874), the CY 2013 Hospital Outpatient Prospective Payment System/
Ambulatory Surgical Center (OPPS/ASC) Payment Systems and Quality 
Reporting Programs final rule (77 FR 68500 through 68503), the FY 2014 
IRF PPS final rule (78 FR 47902), the FY 2015 IRF PPS final rule (79 FR 
45908), the FY 2016 IRF PPS final rule (80 FR 47080 through 47083), the 
FY 2017 IRF PPS final rule (81 FR 52080 through 52081), and the FY 2018 
IRF PPS final rule (82 FR 36269 through 36270).
    Although we have historically used the preamble to the IRF PPS 
proposed and final rules each year to remind stakeholders of all 
previously finalized program requirements, we have concluded that 
repeating the same discussion each year is not necessary for every 
requirement, especially if we have codified it in our regulations. 
Accordingly, the following discussion is limited as much as possible to 
a discussion of our proposals for future years of the IRF QRP, and 
represents the approach we intend to use in our rulemakings for this 
program going forward.

B. General Considerations Used for the Selection of Measures for the 
IRF QRP

1. Background
    For a detailed discussion of the considerations we historically 
used for the selection of IRF QRP quality, resource use, and others 
measures, we refer readers to the FY 2016 IRF PPS final rule (80 FR 
47083 through 47084).
2. Accounting for Social Risk Factors in the IRF QRP
    In the FY 2018 IRF PPS final rule (82 FR 36273 through 36274), we 
discussed the importance of improving beneficiary outcomes including 
reducing health disparities. We also discussed our commitment to 
ensuring that medically complex patients, as well as those with social 
risk factors, receive excellent care. We discussed how studies show 
that social risk factors, such as being near or below the poverty level 
as determined by HHS, belonging to a racial or ethnic minority group, 
or living with a disability, can be associated with poor health 
outcomes and how some of this disparity is related to the quality of 
health care.\3\ Among our core objectives, we aim to improve health 
outcomes, attain health equity for all beneficiaries, and ensure that 
complex patients as well as those with social risk factors receive 
excellent care. Within this context, reports by the Office of the 
Assistant Secretary for Planning and Evaluation (ASPE) and the National 
Academy of Medicine have examined the influence of social risk factors 
in our value-based purchasing programs.\4\ As we noted in the FY 2018 
IRF PPS final rule (82 FR 36273 through 36274), ASPE's report to 
Congress, which was required by the IMPACT Act, found that, in the 
context of value-based purchasing programs, dual eligibility was the 
most powerful predictor of poor health care outcomes among those social 
risk factors that they examined and tested. ASPE is continuing to 
examine this issue in its second report required by the IMPACT Act, 
which is due to Congress in the fall of 2019. In addition, as we noted 
in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38428), the National 
Quality Forum (NQF) undertook a 2-year trial period in which certain 
new measures and measures undergoing maintenance review have been 
assessed to determine if risk adjustment for social risk factors is 
appropriate for these measures.\5\ The trial period ended in April 2017 
and a final report is available at https://www.qualityforum.org/SES_Trial_Period.aspx. The trial concluded that ``measures with a 
conceptual basis for adjustment generally did not demonstrate an 
empirical relationship'' between social risk factors and the outcomes 
measured. This discrepancy may be explained in part by the methods used 
for adjustment and the limited availability of robust data on social 
risk factors. NQF has extended the socioeconomic status (SES) trial,\6\ 
allowing further examination of social risk factors in outcome 
measures.
---------------------------------------------------------------------------

    \3\ See, for example, United States Department of Health and 
Human Services. ``Healthy People 2020: Disparities. 2014,'' https://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities or National Academies of Sciences, Engineering, and 
Medicine. Accounting for Social Risk Factors in Medicare Payment: 
Identifying Social Risk Factors. Washington, DC: National Academies 
of Sciences, Engineering, and Medicine 2016.
    \4\ Department of Health and Human Services Office of the 
Assistant Secretary for Planning and Evaluation (ASPE), ``Report to 
Congress: Social Risk Factors and Performance Under Medicare's 
Value-Based Purchasing Programs.'' December 2016, https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \5\ Available at https://www.qualityforum.org/SES_Trial_Period.aspx.
    \6\ Available at: https://www.qualityforum.org/SES_Trial_Period.aspx
---------------------------------------------------------------------------

    In the FY/CY 2018 proposed rules for our quality reporting and 
value-based purchasing programs, we solicited feedback on which social 
risk factors provide the most valuable information to stakeholders and 
the methodology for illuminating differences in outcomes rates among 
patient groups within a provider that would also allow for a comparison 
of those differences, or disparities, across providers. Feedback we 
received across our quality reporting programs included encouraging CMS 
to explore whether factors that could be used to stratify or risk 
adjust the measures (beyond dual eligibility); to consider the full 
range of differences in patient backgrounds that might affect outcomes; 
to explore risk adjustment approaches; and to offer careful 
consideration of what type of information display would be most useful 
to the public.
    We also sought public comment on confidential reporting and future 
public reporting of some of our measures stratified by patient dual 
eligibility. In general, commenters noted that stratified measures 
could serve as tools for hospitals to identify gaps in outcomes for 
different groups of patients, improve the quality of health care for 
all patients, and empower consumers to make informed decisions about 
health care. Commenters encouraged CMS to stratify measures by other 
social risk factors such as age, income, and educational attainment. 
With regard to value-based purchasing programs, commenters also 
cautioned to balance fair and equitable payment while avoiding payment 
penalties that mask health disparities or discouraging the provision of 
care to more medically complex patients. Commenters also noted that 
value-based payment program measure selection, domain weighting, 
performance scoring, and payment methodology must account for social 
risk.

[[Page 21000]]

    As a next step, we are considering options to improve health 
disparities among patient groups within and across hospitals by 
increasing the transparency of disparities, as shown by quality 
measures. We also are considering how this work applies to other CMS 
quality programs in the future. We refer readers to the FY 2018 IPPS/
LTCH PPS final rule (82 FR 38403 through 38409) for more details where 
we discuss the potential stratification of certain Hospital Inpatient 
Quality Reporting Program outcome measures. Furthermore, we continue to 
consider options to address equity and disparities in our value-based 
purchasing programs.
    We plan to continue working with ASPE, the public, and other key 
stakeholders on this important issue to identify policy solutions that 
achieve the goals of attaining health equity for all beneficiaries and 
minimizing unintended consequences.

C. Proposed New Removal Factor for Previously Adopted IRF QRP Measures

    As part of our Meaningful Measures Initiative, discussed in section 
D.1. of the Executive Summary of this proposed rule, we strive to put 
patients first, ensuring that they, along with their clinicians, are 
empowered to make decisions about their own healthcare using data-
driven information that is increasingly aligned with a parsimonious set 
of meaningful quality measures. We began reviewing the IRF QRP's 
measures in accordance with the Meaningful Measures Initiative 
discussed in section D.1 of the Executive Summary, and we are working 
to identify how to move the IRF QRP forward in the least burdensome 
manner possible, while continuing to incentivize improvement in the 
quality of care provided to patients.
    Specifically, we believe the goals of the IRF QRP and the measures 
used in the program cover most of the Meaningful Measures Initiative 
priorities, including making care safer, strengthening person and 
family engagement, promoting coordination of care, promoting effective 
prevention and treatment, and making care affordable.
    We also evaluated the appropriateness and completeness of the IRF 
QRP's current measure removal factors. We have previously finalized 
that we would use notice and comment rulemaking to remove measures from 
the IRF QRP based on the following factors (77 FR 68502 through 68503): 
\7\
---------------------------------------------------------------------------

    \7\ We refer readers to the FY 2013 CY 2013 Hospital Outpatient 
Prospective Payment System/Ambulatory Surgical Center (OPPS/ASC) 
Payment Systems and Quality Reporting Programs final rule (77 FR 
68502 through 68503) and FY 2018 IRF PPS final rule (82 FR 36276) 
for more information on the factors we consider for removing 
measures and standardized patient assessment data.
---------------------------------------------------------------------------

     Factor 1. Measure performance among IRFs is so high and 
unvarying that meaningful distinctions in improvements in performance 
can no longer be made.
     Factor 2. Performance or improvement on a measure does not 
result in better patient outcomes.
     Factor 3. A measure does not align with current clinical 
guidelines or practice.
     Factor 4. A more broadly applicable measure (across 
settings, populations, or conditions) for the particular topic is 
available.
     Factor 5. A measure that is more proximal in time to 
desired patient outcomes for the particular topic is available.
     Factor 6. A measure that is more strongly associated with 
desired patient outcomes for the particular topic is available.
     Factor 7. Collection or public reporting of a measure 
leads to negative unintended consequences other than patient harm.
    We continue to believe these measure removal factors are 
appropriate for use in the IRF QRP. However, even if one or more of the 
measure removal factors applies, we might nonetheless choose to retain 
the measure for certain specified reasons. Examples of such instances 
could include when a particular measure addresses a gap in quality that 
is so significant that removing the measure could in turn result in 
poor quality, or in the event that a given measure is statutorily 
required. We note further that, consistent with other quality reporting 
programs, we apply these factors on a case-by-case basis.
    We are proposing to adopt an additional factor to consider when 
evaluating measures for removal from the IRF QRP measure set:
    Factor 8. The costs associated with a measure outweigh the benefit 
of its continued use in the program.
    As we discussed in section D.1. of the Executive Summary of this 
proposed rule, to our new Meaningful Measures Initiative, we are 
engaging in efforts to ensure that the IRF QRP measure set continues to 
promote improved health outcomes for beneficiaries while minimizing the 
overall costs associated with the program. We believe these costs are 
multifaceted and include not only the burden associated with reporting, 
but also the costs associated with implementing and maintaining the 
program. We have identified several different types of costs, 
including, but not limited to: (1) Provider and clinician information 
collection burden and burden associated with the submitting/reporting 
of quality measures to CMS; (2) the provider and clinician cost 
associated with complying with other programmatic requirements; (3) the 
provider and clinician cost associated with participating in multiple 
quality programs, and tracking multiple similar or duplicative measures 
within or across those programs; (4) the cost to CMS associated with 
the program oversight of the measure including measure maintenance and 
public display; and (5) the provider and clinician cost associated with 
compliance to other federal and/or state regulations (if applicable).
    For example, it may be needlessly costly and/or of limited benefit 
to retain or maintain a measure which our analyses show no longer 
meaningfully supports program objectives (for example, informing 
beneficiary choice). It may also be costly for health care providers to 
track confidential feedback, preview reports, and publicly reported 
information on a measure where we use the measure in more than one 
program. We may also have to expend unnecessary resources to maintain 
the specifications for the measure, including the tools needed to 
collect, validate, analyze, and publicly report the measure data. 
Furthermore, beneficiaries may find it confusing to see public 
reporting on the same measure in different programs.
    When these costs outweigh the evidence supporting the continued use 
of a measure in the IRF QRP, we believe it may be appropriate to remove 
the measure from the program. Although we recognize that one of the 
main goals of the IRF QRP is to improve beneficiary outcomes by 
incentivizing health care providers to focus on specific care issues 
and making public data related to those issues, we also recognize that 
those goals can have limited utility where, for example, the publicly 
reported data is of limited use because it cannot be easily interpreted 
by beneficiaries and used to influence their choice of providers. In 
these cases, removing the measure from the IRF QRP may better 
accommodate the costs of program administration and compliance without 
sacrificing improved health outcomes and beneficiary choice.
    We are proposing that we would remove measures based on this factor 
on a case-by-case basis. We might, for example, decide to retain a 
measure that is burdensome for health care providers to report if we 
conclude that the benefit to beneficiaries is so high that it justifies

[[Page 21001]]

the reporting burden. Our goal is to move the program forward in the 
least burdensome manner possible, while maintaining a parsimonious set 
of meaningful quality measures and continuing to incentivize 
improvement in the quality of care provided to patients.
    We are inviting public comment on our proposal to adopt an 
additional measure removal Factor 8, ``the costs associated with a 
measure outweigh the benefit of its continued use in the program.''
    We also are proposing to revise Sec.  412.634(b)(2) of our 
regulations to codify both the removal factors we have previously 
finalized for the IRF QRP, as well as the new measure removal factor 
that we are proposing to adopt in this proposed rule. We are also 
proposing to remove the reference to the payment impact from the 
heading of Sec.  412.634(b) and, as discussed more fully in section 
X.J. of this proposed rule, remove the language in current Sec.  
412.634(b)(2) related to the two percentage point payment reduction 
because that payment reduction is also addressed at Sec.  
412.624(c)(4).
    We invite public comment on these proposals.

D. Quality Measures Currently Adopted for the FY 2020 IRF QRP

    The IRF QRP currently has 18 measures for the FY 2020 program year, 
which are outlined in Table 11.

  Table 11--Quality Measures Currently Adopted for the FY 2020 IRF QRP
------------------------------------------------------------------------
          Short name                  Measure name and data source
------------------------------------------------------------------------
                                 IRF-PAI
------------------------------------------------------------------------
Pressure Ulcer...............  Percent of Residents or Patients With
                                Pressure Ulcers That Are New or Worsened
                                (Short Stay) (NQF #0678).*
Pressure Ulcer/Injury........  Changes in Skin Integrity Post-Acute
                                Care: Pressure Ulcer/Injury.
Patient Influenza Vaccine....  Percent of Residents or Patients Who Were
                                Assessed and Appropriately Given the
                                Seasonal Influenza Vaccine (Short Stay)
                                (NQF #0680).
Application of Falls.........  Application of Percent of Residents
                                Experiencing One or More Falls with
                                Major Injury (Long Stay) (NQF #0674).
Application of Functional      Application of Percent of Long-Term Care
 Assessment.                    Hospital (LTCH) Patients with an
                                Admission and Discharge Functional
                                Assessment and a Care Plan That
                                Addresses Function (NQF #2631).
DRR..........................  Drug Regimen Review Conducted With Follow-
                                Up for Identified Issues-Post Acute Care
                                (PAC) Inpatient Rehabilitation Facility
                                (IRF) Quality Reporting Program (QRP).
Change in Self-Care..........  IRF Functional Outcome Measure: Change in
                                Self-Care Score for Medical
                                Rehabilitation Patients (NQF #2633).
Change in Mobility...........  IRF Functional Outcome Measure: Change in
                                Mobility Score for Medical
                                Rehabilitation Patients (NQF #2634).
Discharge Self-Care Score....  IRF Functional Outcome Measure: Discharge
                                Self-Care Score for Medical
                                Rehabilitation Patients (NQF #2635).
Discharge Mobility Score.....  IRF Functional Outcome Measure: Discharge
                                Mobility Score for Medical
                                Rehabilitation Patients (NQF #2636).
------------------------------------------------------------------------
                                  NHSN
------------------------------------------------------------------------
CAUTI........................  National Healthcare Safety Network (NHSN)
                                Catheter-Associated Urinary Tract
                                Infection Outcome Measure (NQF #0138).
MRSA.........................  National Healthcare Safety Network (NHSN)
                                Facility-wide Inpatient Hospital-onset
                                Methicillin-resistant Staphylococcus
                                aureus (MRSA) Bacteremia Outcome Measure
                                (NQF #1716).
CDI..........................  National Healthcare Safety Network (NHSN)
                                Facility-wide Inpatient Hospital-onset
                                Clostridium difficile Infection (CDI)
                                Outcome Measure (NQF #1717).
HCP Influenza Vaccine........  Influenza Vaccination Coverage among
                                Healthcare Personnel (NQF #0431).
------------------------------------------------------------------------
                              Claims-Based
------------------------------------------------------------------------
MSPB IRF.....................  Medicare Spending Per Beneficiary (MSPB)-
                                Post Acute Care (PAC) PAC IRF QRP.
DTC..........................  Discharge to Community--PAC IRF QRP.
PPR 30 day...................  Potentially Preventable 30-Day Post-
                                Discharge Readmission Measure for IRF
                                QRP.*
PPR Within Stay..............  Potentially Preventable Within Stay
                                Readmission Measure for IRFs.
------------------------------------------------------------------------
* The measure will be replaced with the Changes in Skin Integrity Post-
  Acute Care: Pressure Ulcer/Injury measure, effective October 1, 2018.

E. Proposed Removal of Two IRF QRP Measures

    We are proposing to remove two measures from the IRF QRP measure 
set. Beginning with the FY 2020 IRF QRP, we are proposing to remove the 
National Healthcare Safety Network (NHSN) Facility-wide Inpatient 
Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) 
Bacteremia Outcome Measure (NQF #1716). We are also proposing to remove 
one measure beginning with the FY 2021 IRF QRP: Percent of Residents or 
Patients Who Were Assessed and Appropriately Given the Seasonal 
Influenza Vaccine (Short Stay) (NQF #0680). We discuss these proposals 
below.
1. Proposed Removal of National Healthcare Safety Network (NHSN) 
Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant 
Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716) 
Beginning With the FY 2020 IRF QRP
    We are proposing to remove the measure, Facility-wide Inpatient 
Hospital-onset Methicillin-resistant Staphylococcus aureus (MRSA) 
Bacteremia Outcome Measure (NQF #1716), from the IRF QRP measure set

[[Page 21002]]

beginning with the FY 2020 IRF QRP under our proposed measure removal 
Factor 8, the costs associated with a measure outweigh the benefit of 
its continued use in the IRF QRP.
    We originally adopted this measure in the FY 2015 IRF PPS final 
rule (79 FR 45911 through 45913). The measure assesses MRSA infections 
caused by a strain of MRSA bacteria that has become resistant to 
antibiotics commonly used to treat MRSA infections. The measure is 
reported as a Standardized Infection Ratio (SIR) of hospital-onset 
unique blood source MRSA laboratory-identified events among all 
inpatients in the facility.
    The data on this measure is submitted by IRFs via the National 
Health Safety Network (NHSN), and we adopted it for use in several 
quality reporting programs because we believe that MRSA is a serious 
healthcare associated infection. To calculate a measure rate for an 
individual IRF, we must be able to attribute to the IRF at least one 
expected MRSA infection during the reporting period. However, we have 
found that the number of IRFs with expected MRSA infections during a 
given reporting period is extraordinarily low. For 99.9 percent of 
IRFs, the expected MRSA infection incident rate is less than one, which 
is too low to use for purposes of generating a reliable standardized 
infection ratio. As a result, we are unable to calculate reliable 
measure rates and publicly report those rates for almost all IRFs 
because their expected infection rates during a given reporting period 
are less than one. Therefore, while we still recognize that MRSA is a 
serious healthcare associated infection, the benefit of this NHSN 
Facility-wide Inpatient Hospital-onset MRSA Bacteremia Outcome Measure 
(NQF #1716) is small. For this reason, we believe that the burden 
required for data collection and submission on this measure and the 
costs associated with this measure, which include the costs to maintain 
and publicly report it for the IRF QRP and the costs for a small number 
of IRFs to track their rates when reliable rates cannot be calculated 
for most IRFs, outweigh the benefit of its continued use in the 
program.
    Therefore, we are proposing to remove this measure from the IRF 
QRP, beginning with the FY 2020 IRF QRP.
    If finalized as proposed, IRFs would no longer be required to 
submit data on this measure for the purposes of the IRF QRP beginning 
with October 1, 2018 admissions and discharges.
    We are inviting public comment on this proposal.
2. Proposed Removal of Percent of Residents or Patients Who Were 
Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short 
Stay) (NQF #0680) Beginning With the FY 2021 IRF QRP
    We are proposing to remove the measure, Percent of Residents or 
Patients Who Were Assessed and Appropriately Given the Seasonal 
Influenza Vaccine (Short Stay) (NQF #0680), from the IRF QRP beginning 
with the FY 2021 IRF QRP under measure removal Factor 1, measure 
performance among IRFs is so high and unvarying that meaningful 
distinctions in improvements in performance can no longer be made.
    In the FY 2014 IRF PPS final rule (78 FR 47910 through 47911), we 
adopted the Percent of Residents or Patients Who Were Assessed and 
Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF 
#0680) to assess vaccination rates among IRF patients because many 
patients receiving care in the IRF setting are 65 years and older and 
considered to be the target population for the influenza vaccination.
    This process measure reports the percentage of stays in which the 
patient was assessed and appropriately given the influenza vaccine for 
the most recent influenza vaccination season. In our evaluation of this 
measure, we identified that IRF performance has been high and 
relatively stable, demonstrating nominal improvements across influenza 
seasons since data collection began. Our analysis of this particular 
measure revealed that for the 2015-2016 and the 2016-2017 influenza 
seasons, nearly every IRF patient was assessed and more than 75 percent 
of IRFs (n = 836) are vaccinating IRF patients who have not already 
received a flu vaccination at 90 percent or higher. Further, throughout 
the last two influenza seasons, the number of IRFs who achieved a 
perfect score (100 percent) on this measure has grown substantially, 
increasing by approximately 50 percent from 146 IRFs (12.9 percent) in 
the 2015-2016 influenza season to 210 IRFs (18.8 percent) in the 2016-
2017 influenza season.
    The Percent of Residents or Patients Who Were Assessed and 
Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF 
#0680) measure rates are also unvarying. With respect to the 2015-2016 
influenza season, the mean performance score was 91.04 percent, and 
with respect to the 2016-2017 influenza season, the mean performance 
score on this measure was 93.88 percent. The proximity of these mean 
rates to the maximum score of 100 percent suggests a potential ceiling 
effect and a lack of variation that restricts distinction between 
facilities. Given that performance among IRFs has remained so high and 
that no meaningful distinction in performance can be made across the 
majority of IRFs, we are proposing the removal of this measure.
    Therefore, we are proposing to remove this measure from the IRF QRP 
beginning with the FY 2021 IRF QRP under of measure removal Factor 1, 
measure performance among IRFs is so high and unvarying that meaningful 
distinctions in improvements in performance can no longer be made.
    If finalized as proposed, IRFs would no longer be required to 
submit data on this measure for the purposes of the IRF QRP beginning 
with patients discharged on or after October 1, 2018. We plan to remove 
these data elements from the IRF-PAI version 3.0, effective October 1, 
2019. Beginning with October 1, 2018 discharges, IRFs should enter a 
dash (-) for O0250A, O0250B, and O0250C until the IRF-PAI version 3.0 
is released.
    We are inviting public comment on this proposal.

F. IMPACT Act Implementation Update

    In the FY 2018 IRF PPS final rule (82 FR 36285 through 36286), we 
stated that we intended to specify two measures that would satisfy the 
domain of accurately communicating the existence and provision of the 
transfer of health information and care preferences under section 
1899B(c)(1)(E) of the Act no later than October 1, 2018, and intended 
to propose to adopt them for the FY 2021 IRF QRP with data collection 
beginning on or about October 1, 2019.
    As a result of the input provided during a public comment period 
between November 10, 2016 and December 11, 2016, input provided by a 
technical expert panel (TEP) convened by our contractor, and pilot 
measure testing conducted in 2017, we are engaging in continued 
development work on these two measures, including supplementary measure 
testing and providing the public with an opportunity for comment in 
2018. Further, we expect to reconvene a TEP for these measures in mid-
2018. We now intend to specify the measures under section 
1899B(c)(1)(E) of the Act no later than October 1, 2019, and intend to 
propose to adopt the measures for the FY 2022 IRF QRP, with data 
collection beginning with patients discharged on or after October 1, 
2020. For more information on the pilot testing, we refer readers to: 
https://

[[Page 21003]]

www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-and-Videos.html.

G. Form, Manner, and Timing of Data Submission Under the IRF QRP

    Under our current policy, IRFs report data on IRF QRP assessment-
based measures and standardized patient assessment data by completing 
applicable sections of the IRF-PAI and submitting the IRF-PAI to CMS 
through the Quality Improvement Evaluation System (QIES) Assessment 
Submission and Processing (ASAP) system. For more information on IRF 
QRP reporting through the Quality Improvement and Evaluation System 
Assessment Submission and Processing (QIES ASAP) system, refer to the 
``Related Links'' section at the bottom of https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/InpatientRehabFacPPS/Software.html. Data on IRF QRP measures that are also collected by the 
Centers for Disease Control and Prevention (CDC) for other purposes are 
reported by IRFs to the CDC through the NHSN, and the CDC then 
transmits the relevant data to CMS. Information regarding the CDC's 
NHSN is available at: https://www.cdc.gov/nhsn/. We refer 
readers to the FY 2018 IRF PPS final rule (82 FR 36291 through 36292) 
for the data collection and submission timeframes that we finalized for 
the IRF QRP.
    We previously codified at Sec.  412.634(b)(1) of our regulations 
the requirement that IRFs submit data on measures specified under 
sections 1886(j)(7)(D), 1899B(c)(1), and 1899B(d)(1) of the Act in the 
form and manner, and at a time, specified by CMS. We are proposing in 
this proposed rule to revise Sec.  412.634(b)(1) to include the policy 
we previously finalized in the FY 2018 IRF PPS Final Rule (82 FR 36292 
through 36293) that IRFs must also submit standardized patient 
assessment data required under section 1899B(b)(1) of the Act in the 
form and manner, and at a time, specified by CMS.
    We are inviting public comment on this proposal.

H. Proposed Changes to Reconsiderations Requirements Under the IRF QRP

    Section 412.634(d)(1) of our regulations states, in part, that IRFs 
found to be non-compliant with the quality reporting requirements for a 
particular fiscal year will receive a letter of non-compliance through 
the Quality Improvement and Evaluation System Assessment Submission and 
Processing (QIES-ASAP) system, as well as through the United States 
Postal Service.
    We are proposing to revise Sec.  412.634(d)(1) to expand the 
methods by which we would notify an IRF of non-compliance with the IRF 
QRP requirements for a program year. Revised Sec.  412.634(d)(1) would 
state that we would notify IRFs of non-compliance with the IRF QRP 
requirements via a letter sent through at least one of the following 
notification methods: The QIES-ASAP system, the United States Postal 
Service, or via an email from the Medicare Administrative Contractor 
(MAC). We believe that this change will address the feedback from 
providers requesting additional methods for notification.
    We are also proposing to revise Sec.  412.634(d)(5) to clarify that 
we will notify IRFs, in writing, of our final decision regarding any 
reconsideration request using the same notification process.
    We are inviting public comments on these proposals.

I. Proposed Policies Regarding Public Display of Measure Data for the 
IRF QRP

    Section 1886(j)(7)(E) of the Act requires the Secretary to 
establish procedures for making the IRF QRP data available to the 
public after ensuring that an IRF has the opportunity to review its 
data prior to public display. Measure data are currently displayed on 
the IRF Compare website, an interactive web tool that assists 
individuals by providing information on IRF quality of care to those 
who need to select an IRF. For more information on IRF Compare, we 
refer readers to: https://www.medicare.gov/inpatientrehabilitationfacilitycompare/.
    We propose to begin publicly displaying data on the following four 
assessment-based measures in CY 2020, or as soon thereafter as 
technically feasible: (1) Change in Self-Care (NQF #2633); (2) Change 
in Mobility Score (NQF #2634); (3) Discharge Self-Care Score (NQF 
#2635); (4) and Discharge Mobility Score (NQF #2636). Data collection 
for these four assessment-based measures began with patients discharged 
on or after October 1, 2016. We are proposing to display data for these 
assessment-based measures based on four rolling quarters of data, 
initially using discharges from January 1, 2019 through December 31, 
2019 (Quarter 1 2019 through Quarter 4 2019). To ensure the statistical 
reliability of the data for these four assessment-based measures, we 
are also proposing that if an IRF has fewer than 20 cases during any 
four consecutive rolling quarters of data that we are displaying for 
any of these measures, then we would note in our public display of that 
measure that with respect to that IRF the number of cases/patient stays 
is too small to publicly report.
    We invite public comment on these proposals

J. Method for Applying the Reduction to the FY 2019 IRF Increase Factor 
for IRFs That Fail To Meet the Quality Reporting Requirements

    As previously noted, section 1886(j)(7)(A)(i) of the Act requires 
the application of a 2-percentage point reduction of the applicable 
market basket increase factor for payments for discharges occurring 
during such fiscal year for IRFs that fail to comply with the quality 
data submission requirements. We propose to apply a 2-percentage point 
reduction to the applicable FY 2019 market basket increase factor in 
calculating a proposed adjusted FY 2019 standard payment conversion 
factor to apply to payments for only those IRFs that failed to comply 
with the data submission requirements. As previously noted, application 
of the 2-percentage point reduction may result in an update that is 
less than 0.0 for a fiscal year and in payment rates for a fiscal year 
being less than such payment rates for the preceding fiscal year. Also, 
reporting-based reductions to the market basket increase factor will 
not be cumulative; they will only apply for the FY involved.
    We invite public comment on the proposed method for applying the 
reduction to the FY 2019 IRF increase factor for IRFs that fail to meet 
the quality reporting requirements.
    Table 12 shows the calculation of the proposed adjusted FY 2019 
standard payment conversion factor that will be used to compute IRF PPS 
payment rates for any IRF that failed to meet the quality reporting 
requirements for the applicable reporting period.

[[Page 21004]]



    Table 12--Calculations To Determine the Proposed Adjusted FY 2019
   Standard Payment Conversion Factor for IRFs That Failed To Meet the
                      Quality Reporting Requirement
------------------------------------------------------------------------
       Explanation for adjustment          Calculations
------------------------------------------------------------------------
Standard Payment Conversion Factor for    ..............        $ 15,838
 FY 2018................................
Market Basket Increase Factor for FY                   x          0.9935
 2019 (2.9 percent), reduced by 0.8
 percentage point for the productivity
 adjustment as required by section
 1886(j)(3)(C)(ii)(I) of the Act,
 reduced by 0.75 percentage point in
 accordance with sections 1886(j)(3)(C)
 and (D) of the Act and further reduced
 by 2 percentage points for IRFs that
 failed to meet the quality reporting
 requirement............................
Budget Neutrality Factor for the Wage                  x          1.0000
 Index and Labor-Related Share..........
Budget Neutrality Factor for the                       x          0.9980
 Revisions to the CMG Relative Weights..
Adjusted FY 2019 Standard Payment                      =        $ 15,704
 Conversion Factor......................
------------------------------------------------------------------------

    Our regulations currently address the two percentage point payment 
reduction for failure to meet requirements under the IRF QRP in two 
places: Sec.  412.624(c)(4) and Sec.  412.634(b)(2). We believe that 
these provisions are duplicative and are proposing to revise the 
regulations so that the payment reduction is addressed only in Sec.  
412.624(c)(4). As noted in this proposed rule, we are proposing to 
remove the language regarding the payment reduction that is currently 
at Sec.  412.634(b)(2) and to codify that section instead the retention 
and removal policies for the IRF QRP.
    We are also proposing to revise Sec.  412.624(c)(4)(i) to clarify 
that an IRF's failure to submit data under the IRF QRP in accordance 
with Sec.  412.634 will result in the 2 percentage point reduction to 
the applicable increase factor specified in Sec.  412.624(a)(3).
    Finally, we are proposing to revise Sec.  412.624(c)(4) for greater 
consistency with the language of section 1886(j)(7)(A)(i) of the Act. 
Specifically, we would revise paragraph (i) to clarify that the 2 
percentage point reduction is applied ``after application of 
subparagraphs (C)(iii) and (D) of section 1886(j)(3) of the Act.'' In 
addition, we would add a new paragraph (iii) that clarifies that the 2 
percentage point reduction required under section 1886(j)(7)(A)(i) of 
the Act may result in an update that is less than 0.0 for a fiscal 
year.
    We invite public comment on these proposals.

X. Request for Information on Promoting Interoperability and Electronic 
Healthcare Information Exchange Through Possible Revisions to the CMS 
Patient Health and Safety Requirements for Hospitals and Other 
Medicare- and Medicaid-Participating Providers and Suppliers

    Currently, Medicare- and Medicaid-participating providers and 
suppliers are at varying stages of adoption of health information 
technology (health IT). Many hospitals have adopted electronic health 
records (EHRs), and CMS has provided incentive payments to eligible 
hospitals, critical access hospitals (CAHs), and eligible professionals 
who have demonstrated meaningful use of certified EHR technology 
(CEHRT) under the Medicare EHR Incentive Program. As of 2015, 96 
percent of Medicare- and Medicaid-participating non-Federal acute care 
hospitals had adopted certified EHRs with the capability to 
electronically export a summary of clinical care.\8\ While both 
adoption of EHRs and electronic exchange of information have grown 
substantially among hospitals, significant obstacles to exchanging 
electronic health information across the continuum of care persist. 
Routine electronic transfer of information post-discharge has not been 
achieved by providers and suppliers in many localities and regions 
throughout the nation.
---------------------------------------------------------------------------

    \8\ These statistics can be accessed at:
    https://dashboard.healthit.gov/quickstats/pages/FIG-Hospital-EHR-Adoption.php.
---------------------------------------------------------------------------

    CMS is firmly committed to the use of certified health IT and 
interoperable EHR systems for electronic healthcare information 
exchange to effectively help hospitals and other Medicare- and 
Medicaid-participating providers and suppliers improve internal care 
delivery practices, support the exchange of important information 
across care team members during transitions of care, and enable 
reporting of electronically specified clinical quality measures 
(eCQMs). The Office of the National Coordinator for Health Information 
Technology (ONC) acts as the principal federal entity charged with 
coordination of nationwide efforts to implement and use health 
information technology and the electronic exchange of health 
information on behalf of the Department of Health and Human Services.
    In 2015, ONC finalized the 2015 Edition health IT certification 
criteria (2015 Edition), the most recent criteria for health IT to be 
certified to under the ONC Health IT Certification Program. The 2015 
Edition facilitates greater interoperability for several clinical 
health information purposes and enables health information exchange 
through new and enhanced certification criteria, standards, and 
implementation specifications. CMS requires eligible hospitals and CAHs 
in the Medicare and Medicaid EHR Incentive Programs and eligible 
clinicians in the Quality Payment Program (QPP) to use EHR technology 
certified to the 2015 Edition beginning in CY 2019.
    In addition, several important initiatives will be implemented over 
the next several years to provide hospitals and other participating 
providers and suppliers with access to robust infrastructure that will 
enable routine electronic exchange of health information. Section 4003 
of the 21st Century Cures Act (Pub. L. 114-255), enacted in 2016, and 
amending section 3000 of the Public Health Service Act (42 U.S.C. 
300jj), requires HHS to take steps to advance the electronic exchange 
of health information and interoperability for participating providers 
and suppliers in various settings across the care continuum. 
Specifically, Congress directed that ONC ``. . . for the purpose of 
ensuring full network-to-network exchange of health information, 
convene public-private and public-public partnerships to build 
consensus and develop or support a trusted exchange framework, 
including a common agreement among health information networks 
nationally.'' In January 2018, ONC released a draft version of its 
proposal for the Trusted Exchange Framework and Common Agreement,\9\ 
which outlines principles and minimum terms and conditions for trusted 
exchange to enable interoperability across disparate health information 
networks (HINs). The Trusted Exchange Framework (TEF) is focused on 
achieving the following

[[Page 21005]]

four important outcomes in the long-term:
---------------------------------------------------------------------------

    \9\ The draft version of the trusted Exchange Framework may be 
accessed at https://beta.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement.
---------------------------------------------------------------------------

     Professional care providers, who deliver care across the 
continuum, can access health information about their patients, 
regardless of where the patient received care.
     Patients can find all of their health information from 
across the care continuum, even if they do not remember the name of the 
professional care provider they saw.
     Professional care providers and health systems, as well as 
public and private health care organizations and public and private 
payer organizations accountable for managing benefits and the health of 
populations, can receive necessary and appropriate information on 
groups of individuals without having to access one record at a time, 
allowing them to analyze population health trends, outcomes, and costs; 
identify at-risk populations; and track progress on quality improvement 
initiatives.
     The health IT community has open and accessible 
application programming interfaces (APIs) to encourage entrepreneurial, 
user-focused innovation that will make health information more 
accessible and improve EHR usability.
    ONC will revise the draft TEF based on public comment and 
ultimately release a final version of the TEF that will subsequently be 
available for adoption by HINs and their participants seeking to 
participate in nationwide health information exchange. The goal for 
stakeholders that participate in, or serve as, a HIN is to ensure that 
participants will have the ability to seamlessly share and receive a 
core set of data from other network participants in accordance with a 
set of permitted purposes and applicable privacy and security 
requirements. Broad adoption of this framework and its associated 
exchange standards is intended to both achieve the outcomes described 
above while creating an environment more conducive to innovation.
    In light of the widespread adoption of EHRs along with the 
increasing availability of health information exchange infrastructure 
predominantly among hospitals, we are interested in hearing from 
stakeholders on how we could use the CMS health and safety standards 
that are required for providers and suppliers participating in the 
Medicare and Medicaid programs (that is, the Conditions of 
Participation (CoPs), Conditions for Coverage (CfCs), and Requirements 
for Participation (RfPs) for Long Term Care Facilities) to further 
advance electronic exchange of information that supports safe, 
effective transitions of care between hospitals and community 
providers. Specifically, CMS might consider revisions to the current 
CMS CoPs for hospitals such as: Requiring that hospitals transferring 
medically necessary information to another facility upon a patient 
transfer or discharge do so electronically; requiring that hospitals 
electronically send required discharge information to a community 
provider via electronic means if possible and if a community provider 
can be identified; and requiring that hospitals make certain 
information available to patients or a specified third-party 
application (for example, required discharge instructions) via 
electronic means if requested.
    On November 3, 2015, we published a proposed rule (80 FR 68126) to 
implement the provisions of the IMPACT Act and to revise the discharge 
planning CoP requirements that hospitals (including Short-Term Acute-
Care Hospitals, Long-Term Care Hospitals (LTCHs), Inpatient 
Rehabilitation Hospitals (IRFs), Inpatient Psychiatric Hospitals 
(IPFs), Children's Hospitals, and Cancer Hospitals), critical access 
hospitals (CAHs), and home health agencies (HHAs) must meet in order to 
participate in the Medicare and Medicaid programs. This proposed rule 
has not been finalized yet. However, several of the proposed 
requirements directly address the issue of communication between 
providers and between providers and patients, as well as the issue of 
interoperability:
     Hospitals and CAHs would be required to transfer certain 
necessary medical information and a copy of the discharge instructions 
and discharge summary to the patient's practitioner, if the 
practitioner is known and has been clearly identified;
     Hospitals and CAHs would be required to send certain 
necessary medical information to the receiving facility/post-acute care 
providers, at the time of discharge; and
     Hospitals, CAHs and HHAs, would need to comply with the 
IMPACT Act requirements that would require hospitals, CAHs, and certain 
post-acute care providers to use data on quality measures and data on 
resource use measures to assist patients during the discharge planning 
process, while taking into account the patient's goals of care and 
treatment preferences.
    We published another proposed rule (81 FR 39448), on June 16, 2016, 
that updated a number of CoP requirements that hospitals and CAH must 
meet in order to participate in the Medicare and Medicaid programs. 
This proposed rule has not been finalized yet. One of the proposed 
hospital CoP revisions in that rule directly addresses the issues of 
communication between providers and patients, patient access to their 
medical records, and interoperability. We proposed that patients have 
the right to access their medical records, upon an oral or written 
request, in the form and format requested by such patients, if it is 
readily producible in such form and format (including in an electronic 
form or format when such medical records are maintained 
electronically); or, if not, in a readable hard copy form or such other 
form and format as agreed to by the facility and the individual, 
including current medical records, within a reasonable time frame. The 
hospital must not frustrate the legitimate efforts of individuals to 
gain access to their own medical records and must actively seek to meet 
these requests as quickly as its record keeping system permits.
    We also published a final rule (81 FR 68688), on October 4, 2016, 
that revised the requirements that LTC facilities must meet to 
participate in the Medicare and Medicaid programs, where we made a 
number of revisions based on the importance of effective communication 
between providers during transitions of care, such as transfers and 
discharges of residents to other facilities or providers, or to home. 
Among these revisions was a requirement that the transferring LTC 
facility must provide all necessary information to the resident's 
receiving provider, whether it is an acute care hospital, a LTC 
hospital, a psychiatric facility, another LTC facility, a hospice, home 
health agency, or another community-based provider or practitioner. We 
specified that necessary information must include the following:
     Contact information of the practitioner responsible for 
the care of the resident;
     Resident representative information including contact 
information;
     Advance directive information;
     Special instructions or precautions for ongoing care;
     The resident's comprehensive care plan goals; and
     All other necessary information, including a copy of the 
resident's discharge or transfer summary and any other documentation to 
ensure a safe and effective transition of care.
    We note that the discharge summary mentioned above must include 
reconciliation of the resident's medications, as well as a 
recapitulation of the resident's stay, a final summary of the 
resident's status, and the post-discharge plan of care. And in the 
preamble to the rule, we encouraged LTC facilities to electronically 
exchange

[[Page 21006]]

this information if possible and to identify opportunities to 
streamline the collection and exchange of resident information by using 
information that the facility is already capturing electronically.
    Additionally, we specifically invite stakeholder feedback on the 
following questions regarding possible new or revised CoPs/CfCs/RfPs 
for interoperability and electronic exchange of health information:
     If CMS were to propose a new CoP/CfC/RfP standard to 
require electronic exchange of medically necessary information, would 
this help to reduce information blocking as defined in section 4004 of 
the 21st Century Cures Act?
     Should CMS propose new CoPs/CfCs/RfPs for hospitals and 
other participating providers and suppliers to ensure a patient's or 
resident's (or his or her caregiver's or representative's) right and 
ability to electronically access his or her health information without 
undue burden? Would existing portals or other electronic means 
currently in use by many hospitals satisfy such a requirement regarding 
patient/resident access as well as interoperability?
     Are new or revised CMS CoPs/CfCs/RfPs for interoperability 
and electronic exchange of health information necessary to ensure 
patients/residents and their treating providers routinely receive 
relevant electronic health information from hospitals on a timely basis 
or will this be achieved in the next few years through existing 
Medicare and Medicaid policies, HIPAA, and implementation of relevant 
policies in the 21st Century Cures Act?
     What would be a reasonable implementation timeframe for 
compliance with new or revised CMS CoPs/CfCs/RfPs for interoperability 
and electronic exchange of health information if CMS were to propose 
and finalize such requirements? Should these requirements have delayed 
implementation dates for specific participating providers and 
suppliers, or types of participating providers and suppliers (for 
example, participating providers and suppliers that are not eligible 
for the Medicare and Medicaid EHR Incentive Programs)?
     Do stakeholders believe that new or revised CMS CoPs/CfCs/
RfPs for interoperability and electronic exchange of health information 
would help improve routine electronic transfer of health information as 
well as overall patient/resident care and safety?
     Under new or revised CoPs/CfCs/RfPs, should non-electronic 
forms of sharing medically necessary information (for example, printed 
copies of patient/resident discharge/transfer summaries shared directly 
with the patient/resident or with the receiving provider or supplier, 
either directly transferred with the patient/resident or by mail or fax 
to the receiving provider or supplier) be permitted to continue if the 
receiving provider, supplier, or patient/resident cannot receive the 
information electronically?
     Are there any other operational or legal considerations 
(for example, HIPAA), obstacles, or barriers that hospitals and other 
providers and suppliers would face in implementing changes to meet new 
or revised interoperability and health information exchange 
requirements under new or revised CMS CoPs/CfCs/RfPs if they are 
proposed and finalized in the future?
     What types of exceptions, if any, to meeting new or 
revised interoperability and health information exchange requirements, 
should be allowed under new or revised CMS CoPs/CfCs/RfPs if they are 
proposed and finalized in the future? Should exceptions under the QPP 
including CEHRT hardship or small practices be extended to new 
requirements? Would extending such exceptions impact the effectiveness 
of these requirements?
    We would also like to directly address the issue of communication 
between hospitals (as well as the other providers and suppliers across 
the continuum of patient care) and their patients and caregivers. 
MyHealthEData is a government-wide initiative aimed at breaking down 
barriers that contribute to preventing patients from being able to 
access and control their medical records. Privacy and security of 
patient data will be at the center of all CMS efforts in this area. CMS 
must protect the confidentiality of patient data, and CMS is completely 
aligned with the Department of Veterans Affairs (VA), the National 
Institutes of Health (NIH), ONC, and the rest of the federal 
government, on this objective.
    While some Medicare beneficiaries have had, for quite some time, 
the ability to download their Medicare claims information, in pdf or 
Excel formats, through the CMS Blue Button platform, the information 
was provided without any context or other information that would help 
beneficiaries understand what the data was really telling them. For 
beneficiaries, their claims information is useless if it is either too 
hard to obtain or, as was the case with the information provided 
through previous versions of Blue Button, hard to understand. In an 
effort to fully contribute to the federal government's MyHealthEData 
initiative, CMS developed and launched the new Blue Button 2.0, which 
represents a major step toward giving patients meaningful control of 
their health information in an easy-to-access and understandable way. 
Blue Button 2.0 is a developer-friendly, standards-based API that 
enables Medicare beneficiaries to connect their claims data to secure 
applications, services, and research programs they trust. The 
possibilities for better care through Blue Button 2.0 data are 
exciting, and might include enabling the creation of health dashboards 
for Medicare beneficiaries to view their health information in a single 
portal, or allowing beneficiaries to share complete medication lists 
with their doctors to prevent dangerous drug interactions.
    To fully understand all of these health IT interoperability issues, 
initiatives, and innovations through the lens of its regulatory 
authority, CMS invites members of the public to submit their ideas on 
how best to accomplish the goal of fully interoperable health IT and 
EHR systems for Medicare- and Medicaid-participating providers and 
suppliers, as well as how best to further contribute to and advance the 
MyHealthEData initiative for patients. We are particularly interested 
in identifying fundamental barriers to interoperability and health 
information exchange, including those specific barriers that prevent 
patients from being able to access and control their medical records. 
We also welcome the public's ideas and innovative thoughts on 
addressing these barriers and ultimately removing or reducing them in 
an effective way, specifically through revisions to the current CMS 
CoPs, CfCs, and RfPs for hospitals and other participating providers 
and suppliers. We have received stakeholder input through recent CMS 
Listening Sessions on the need to address health IT adoption and 
interoperability among providers that were not eligible for the 
Medicare and Medicaid EHR Incentives program, including long-term and 
post-acute care providers, behavioral health providers, clinical 
laboratories and social service providers, and we would also welcome 
specific input on how to encourage adoption of certified health IT and 
interoperability among these types of providers and suppliers as well.
    We note that this is a Request for Information only. Respondents 
are encouraged to provide complete but concise and organized responses, 
including any relevant data and specific examples. However, respondents 
are not required to address every issue or respond to every question 
discussed in this Request for Information to have their responses 
considered. In accordance with the implementing

[[Page 21007]]

regulations of the Paperwork Reduction Act at 5 CFR 1320.3(h)(4), all 
responses will be considered provided they contain information CMS can 
use to identify and contact the commenter, if needed.
    This Request for Information is issued solely for information and 
planning purposes; it does not constitute a Request for Proposal (RFP), 
applications, proposal abstracts, or quotations. This Request for 
Information does not commit the U.S. Government to contract for any 
supplies or services or make a grant award. Further, CMS is not seeking 
proposals through this Request for Information and will not accept 
unsolicited proposals. Responders are advised that the U.S. Government 
will not pay for any information or administrative costs incurred in 
response to this Request for Information; all costs associated with 
responding to this Request for Information will be solely at the 
interested party's expense.
    We note that not responding to this Request for Information does 
not preclude participation in any future procurement, if conducted. It 
is the responsibility of the potential responders to monitor this 
Request for Information announcement for additional information 
pertaining to this request. In addition, we note that CMS will not 
respond to questions about the policy issues raised in this Request for 
Information. CMS will not respond to comment submissions in response to 
this Request for Information in the FY 2019 IPPS/LTCH PPS final rule. 
Rather, CMS will actively consider all input as we develop future 
regulatory proposals or future subregulatory policy guidance. CMS may 
or may not choose to contact individual responders. Such communications 
would be for the sole purpose of clarifying statements in the 
responders' written responses. Contractor support personnel may be used 
to review responses to this Request for Information. Responses to this 
notice are not offers and cannot be accepted by the Government to form 
a binding contract or issue a grant. Information obtained as a result 
of this Request for Information may be used by the Government for 
program planning on a nonattribution basis. Respondents should not 
include any information that might be considered proprietary or 
confidential.
    This Request for Information should not be construed as a 
commitment or authorization to incur cost for which reimbursement would 
be required or sought. All submissions become U.S. Government property 
and will not be returned. CMS may publically post the public comments 
received, or a summary of those public comments.

XI. Collection of Information Requirements

A. Statutory Requirement for Solicitation of Comments

    Under the Paperwork Reduction Act of 1995 (PRA), we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the OMB for review and approval. To fairly evaluate whether an 
information collection should be approved by OMB, section 3506(c)(2)(A) 
of the PRA requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    This proposed rule makes reference to associated information 
collections that are not discussed in the regulation text contained in 
this document.

B. Collection of Information Requirements for Updates Related to the 
IRF PPS

    As discussed in section VIII.A of this proposed rule, we are 
proposing to modify Sec.  412.622(a)(3)(iv) to provide that the post-
admission physician evaluation required under Sec.  412.622(a)(4)(ii) 
may count as one of the face-to-face physician visits required under 
Sec.  412.622(a)(3)(iv) beginning with FY 2019, that is, for all IRF 
discharges beginning on or after October 1, 2018. As discussed in 
section VIII.B of this proposed rule, we are proposing to modify Sec.  
412.622(a)(5) to allow rehabilitation physicians to attend 
interdisciplinary team meetings remotely beginning with FY 2019, that 
is, for all IRF discharges beginning on or after October 1, 2018. As 
discussed in section VIII.C of this proposed rule, we are proposing to 
modify Sec.  412.606 to remove subsection (a) and eliminate the 
admission order requirement beginning with FY 2019, that is, for all 
IRF discharges beginning on or after October 1, 2018.
    We estimate the cost savings associated with our proposal to allow 
the post-admission physician evaluation to count as one of the required 
face-to-face physician visits, as discussed in section VIII.A of this 
proposed rule, in the following way. We first estimate that the post-
admission physician evaluation takes approximately 60 minutes to 
complete and the required face-to-face physician visits take, on 
average, 30 minutes each to complete. Both of these requirements must 
be fulfilled by a rehabilitation physician. To estimate the burden 
reduction of this proposal, therefore, we obtained the hourly wage rate 
for a physician (there was not a specific wage rate for a 
rehabilitation physician) from the Bureau of Labor Statistics (https://www.bls.gov/ooh/healthcare/home.htm) to be $98.83. The hourly wage rate 
including fringe benefits and overhead is $197.66.
    In FY 2017, we estimate that there were approximately 1,124 total 
IRFs and on average 357 discharges per IRF annually. Therefore, there 
were an estimated seven patients (357 discharges/52 weeks) at the IRF 
per week. The rehabilitation physician spends 357 hours (60 minutes x 
357 discharges) annually completing the post-admission physician 
evaluation. If on average each IRF has seven patients per week and each 
face-to-face visit takes an estimated 30 minutes for the rehabilitation 
physician to complete, annually the rehabilitation physician spends an 
estimated 546 hours ((7 patients x 3 visits x 0.5 hours) x 52 weeks) 
completing the required face-to-face physician visits. On average, a 
rehabilitation physician currently spends 903 hours (357 hours + 546 
hours) annually completing post-admission physician evaluations and the 
required face-to-face physician visits.
    If we allow the post-admission physician evaluation to count as one 
of the face-to-face required physician visits, we would need to 
estimate the average time spent on one face-to-face visit ((7 patients 
x 1 visit x 0.5 hours) x 52 weeks). Removing one of the face-to-face 
visits required in the first week of the IRF admission will save the 
rehabilitation physician approximately 182 hours ((7 patients x 1 visit 
x 0.5 hours) x 52 weeks) annually per IRF. This is a savings of 204,568 
hours across all IRFs annually (1,124 IRFs x 182 hours).
    To estimate the total cost savings per IRF annually, we multiply 
182 hours by $197.66 (average physician's salary doubled to account for 
fringe and overhead costs). Therefore, we can estimate the total cost 
savings per IRF will be $36,000 annually. We estimate that the total 
cost savings for allowing the post-admission physician evaluation to 
count as one of the required face-to-face physician visits, will be 
$40.5

[[Page 21008]]

million (1,124 IRFs x $36,000) annually across the IRF setting. We 
would like to note that all of the cost savings reflected in this 
estimate will occur on the Medicare Part B side, in the form of reduced 
Part B payments to physicians under the physician fee schedule. 
Physician services provided in an IRF are billed directly to Part B 
therefore, IRFs do not pay physicians for their services.
    We do not estimate a cost savings in removing the admission order 
coverage criteria requirements as IRFs are still required to comply 
with the enforcement of the admission requirements located in 
Sec. Sec.  482.24(c), 482.12(c) and 412.3. Any increase in Medicare 
payments due to the proposed change would be negligible given the 
anticipated low volume of claims that would be payable under this 
proposed policy that would not have been paid under the current policy. 
Therefore, we believe that the reduction of burden in this proposed 
removal is in reducing the redundancy of requirements only.
    As discussed in section VII.A of this proposed rule, we are 
proposing to remove the FIMTM instrument and associated 
Function Modifiers from the IRF-PAI beginning with FY 2020, that is, 
for all IRF discharges beginning on or after October 1, 2019. The 
proposed removal of the FIMTM instrument and associated 
Function Modifiers from the IRF PAI would result in the removal of 11 
data items. As a result, we estimate the burden and costs associated 
with the collection of this data will be reduced for IRFs. 
Specifically, we estimate the proposed removal of the FIMTM 
instrument and the associated Function Modifiers will save 25 minutes 
of nursing/clinical staff time used to report data on both admission 
and discharge which was the estimated time needed to complete these 
items when the FIMTM instrument was added to the IRF-PAI in 
the FY 2002 IRF PPS Final Rule (66 FR 41375). We believe that the 
FIMTM items we are proposing to remove may be completed by 
social service assistants, Licensed Practical Nurses (LPN), 
recreational therapists, social workers, dietitians and nutritionists, 
Registered Nurses (RN), Occupational Therapists (OT), Speech Language 
Pathologists (SLP) and audiologists, and or Physical Therapists (PT), 
depending on the item. To estimate the burden associated with the 
collection of these data items, we obtained mean hourly wages for these 
staff from the U.S. Bureau of Labor Statistics' May 2016 National 
Occupational Employment and Wage Estimates (https://www.bls.gov/oes/2016/may/oes_nat.htm) and doubled them to account for overhead and 
fringe benefits. We estimate IRF-PAI preparation and coding costs using 
a social worker hourly wage rate of $48.76, a social work assistant's 
hourly wage rate of $32.82, an RN hourly wage rate of $69.40, an LPN 
hourly wage rate of $43.12, a recreation therapist hourly wage rate of 
$46.34, a dietitian/nutritionist hourly wage rate of $57.38, a speech-
language pathologist hourly wage rate of $75.20, an audiologist hourly 
wage rate of $76.24, an occupational therapist hourly wage rate of 
$80.50, and a physical therapist hourly wage rate of $83.86. Using the 
mean hourly wages (doubled to account for overhead and fringe benefits) 
for the staffing categories above, we calculate an average rate of 
$61.36. The $61.36 rate is a blend of all of these categories, and 
reflects the fact that IRF providers have historically used all of 
these clinicians for preparation and coding for the IRF-PAI.
    To estimate the burden reduction associated with this proposal, we 
estimate that there are approximately 401,760 discharges from 1,124 
IRFs in FY 2017 resulting in an approximate average of 357 discharges 
per IRF annually. This equates to a reduction of 167,400 hours for all 
IRFs ((401,760 discharges x 25 minutes)/60 minutes). This is 149 hours 
(167,400 hours/1,124 IRFs) per IRF annually. We estimate the total cost 
savings per IRF will be approximately $9,100 (149 hours x $61.36) 
annually. We estimate that the total cost savings for all IRF providers 
will be approximately $10.2 million (1,124 IRFs x $9,100) annually.

C. Collection of Information Requirements for Updates Related to the 
IRF QRP

    An IRF that does not meet the requirements of the IRF QRP for a 
fiscal year will receive a 2 percentage point reduction to its 
otherwise applicable annual increase factor for that fiscal year. 
Information is not currently available to determine the precise number 
of IRFs that will receive less than the full annual increase factor for 
FY 2019 due to non-compliance with the requirements of the IRF QRP.
    We believe that the burden associated with the IRF QRP is the time 
and effort associated with complying with the requirements of the IRF 
QRP. As of February 1, 2018, there are approximately 1,124 IRFs 
reporting quality data to CMS. For the purposes of calculating the 
costs associated with the collection of information requirements, we 
obtained mean hourly wages for these staff from the U.S. Bureau of 
Labor Statistics' May 2016 National Occupational Employment and Wage 
Estimates (https://www.bls.gov/oes/current/oes_nat.htm). To account for 
overhead and fringe benefits, we have doubled the hourly wage. These 
amounts are detailed in Table 13.

     Table 13--U.S. Bureau of Labor Statistics' May 2016 National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                   Overhead and      Adjusted
                Occupation title                    Occupation      Mean hourly   fringe benefit  hourly wage ($/
                                                       code         wage ($/hr)       ($/hr)            hr)
----------------------------------------------------------------------------------------------------------------
Registered Nurse (RN)...........................         29-1141          $34.70          $34.70          $69.40
Medical Records and Health Information                   29-2071           19.93           19.93           39.86
 Technician.....................................
----------------------------------------------------------------------------------------------------------------

    As discussed in section IX.4. of this proposed rule, we are 
proposing to remove two measures from the IRF QRP.
    In section IX.4.2 of this proposed rule, we are proposing to remove 
the measure, Percent of Residents or Patients Who Were Assessed and 
Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF 
#0680), beginning with the FY 2021 IRF QRP. IRFs will no longer be 
required to submit data on this measure beginning with patients 
discharged on October 1, 2018, and the items will be removed from the 
IRF-PAI V3.0, effective October 1, 2019. As a result, the estimated 
burden and cost for IRFs for complying with requirements of the FY 2021 
IRF QRP will be reduced. Specifically, we believe that there will be a 
4.8 minute reduction in clinical staff time to report data per patient 
stay. We estimate 401,760 discharges from 1,124 IRFs annually. This 
equates to a decrease of 32,141 hours in burden for all IRFs (0.08 
hours per assessment x 401,760 discharges). Given 4.8 minutes

[[Page 21009]]

of RN time at $69.40 per hour completing an average of 357 sets of IRF-
PAI assessments per provider per year, we estimate that the total cost 
will be reduced by $1,982 per IRF annually, or $2,227,768 for all IRFs 
annually. This decrease in burden will be accounted for in the 
information collection under OMB control number (0938-0842).
    In addition, we are proposing to remove one CDC NHSN measure, 
beginning with the FY 2020 IRF QRP, which will result in a decrease in 
burden and cost for IRFs. Providers will no longer be required to 
submit data beginning with October 1, 2018 admissions and discharges. 
We estimate that the removal of the National Healthcare Safety Network 
(NHSN) Facility-wide Inpatient Hospital-onset Methicillin-resistant 
Staphylococcus aureus (MRSA) Bacteremia Outcome Measure (NQF #1716) 
measure will result in a 3-hour (15 minutes per MRSA submission x 12 
estimated submissions IRF per year) reduction in clinical staff time 
annually to report data which equates to a decrease of 3,372 hours (3 
hours burden per IRF per year x 1,124 total IRFs) in burden for all 
IRFs. Given 10 minutes of RN time at $69.40 per hour, and 5 minutes of 
Medical Records or Health Information Technician at $39.86 per hour, 
for the submission of MRSA data to the NHSN per IRF per year, we 
estimate that the total cost of complying with requirements of the IRF 
QRP will be reduced by $178.66 per IRF annually, or $200,813.84 for all 
IRFs annually.
    In summary, the proposed IRF QRP measure removals will result in a 
burden reduction of $2160.66 per IRF annually, and $2,428,581.84 for 
all IRFs annually.

XII. Response to Public Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this proposed 
rule, and, when we proceed with a subsequent document, we will respond 
to the comments in the preamble to that document.

XIV. Regulatory Impact Analysis

A. Statement of Need

    This proposed rule updates the IRF prospective payment rates for FY 
2019 as required under section 1886(j)(3)(C) of the Act. It responds to 
section 1886(j)(5) of the Act, which requires the Secretary to publish 
in the Federal Register on or before the August 1 that precedes the 
start of each fiscal year, the classification and weighting factors for 
the IRF PPS's case-mix groups, and a description of the methodology and 
data used in computing the prospective payment rates for that fiscal 
year.
    This proposed rule also implements sections 1886(j)(3)(C) and (D) 
of the Act. Section 1886(j)(3)(C)(ii)(I) of the Act requires the 
Secretary to apply a multi-factor productivity adjustment to the market 
basket increase factor, and to apply other adjustments as defined by 
the Act. The productivity adjustment applies to FYs from 2012 forward. 
The other adjustments apply to FYs 2010 through 2019.
    Furthermore, this proposed rule also adopts policy changes under 
the statutory discretion afforded to the Secretary under section 
1886(j)(7) of the Act. Specifically, we propose to remove the 
FIMTM instrument and associated Function Modifiers from the 
IRF-PAI, revise certain IRF coverage requirements, and remove two 
measures and codify policies that have been finalized under the IRF 
QRP.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), the Congressional Review Act (5 U.S.C. 804(2) and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). We estimate the total impact of the policy updates described in 
this proposed rule by comparing the estimated payments in FY 2019 with 
those in FY 2018. This analysis results in an estimated $75 million 
increase for FY 2019 IRF PPS payments. Additionally we estimate that 
costs associated with the proposals to revise certain IRF coverage 
requirements and update the reporting requirements under the IRF 
quality reporting program result in an estimated $42.9 million 
reduction in costs in FY 2019 for IRFs. We estimate that this 
rulemaking is ``economically significant'' as measured by the $100 
million threshold, and hence also a major rule under the Congressional 
Review Act. Also, the rule has been reviewed by OMB. Accordingly, we 
have prepared a Regulatory Impact Analysis that, to the best of our 
ability, presents the costs and benefits of the rulemaking.

C. Anticipated Effects

1. Effects on IRFs
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most IRFs and most other providers and 
suppliers are small entities, either by having revenues of $7.5 million 
to $38.5 million or less in any 1 year depending on industry 
classification, or by being nonprofit organizations that are not 
dominant in their markets. (For details, see the Small Business 
Administration's final rule that set forth size standards for health 
care industries, at 65 FR 69432 at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf, effective March 26, 2012 and 
updated on February 26, 2016.) Because we lack data on individual 
hospital receipts, we cannot determine the number of small proprietary 
IRFs or the proportion of IRFs' revenue that is derived from

[[Page 21010]]

Medicare payments. Therefore, we assume that all IRFs (an approximate 
total of 1,120 IRFs, of which approximately 55 percent are nonprofit 
facilities) are considered small entities and that Medicare payment 
constitutes the majority of their revenues. The HHS generally uses a 
revenue impact of 3 to 5 percent as a significance threshold under the 
RFA. As shown in Table 14, we estimate that the net revenue impact of 
this proposed rule on all IRFs is to increase estimated payments by 
approximately 0.9 percent. The rates and policies set forth in this 
proposed rule will not have a significant impact (not greater than 3 
percent) on a substantial number of small entities. Medicare 
Administrative Contractors are not considered to be small entities. 
Individuals and states are not included in the definition of a small 
entity. In addition, section 1102(b) of the Act requires us to prepare 
a regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds. As discussed in detail 
below in this section, the rates and policies set forth in this 
proposed rule will not have a significant impact (not greater than 3 
percent) on a substantial number of rural hospitals based on the data 
of the 137 rural units and 11 rural hospitals in our database of 1,124 
IRFs for which data were available.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-04, enacted on March 22, 1995) (UMRA) also requires that agencies 
assess anticipated costs and benefits before issuing any rule whose 
mandates require spending in any 1 year of $100 million in 1995 
dollars, updated annually for inflation. In 2018, that threshold is 
approximately $150 million. This proposed rule does not mandate any 
requirements for State, local, or tribal governments, or for the 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has federalism 
implications. As stated, this proposed rule will not have a substantial 
effect on state and local governments, preempt state law, or otherwise 
have a federalism implication.
    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs, was issued on January 30, 2017 and requires that the 
costs associated with significant new regulations ``shall, to the 
extent permitted by law, be offset by the elimination of existing costs 
associated with at least two prior regulations.'' This proposed rule, 
if finalized, is considered an E.O. 13771 deregulatory action. We 
estimate that this rule would generate $46.49 million in annualized 
cost savings, discounted at 7 percent relative to year 2016, over a 
perpetual time horizon. Details on the estimated costs savings of this 
rule can be found in the preceding analyses.
2. Detailed Economic Analysis
    This proposed rule proposes updates to the IRF PPS rates contained 
in the FY 2018 IRF PPS final rule (82 FR 36238). Specifically, this 
proposed rule would update the CMG relative weights and average length 
of stay values, the wage index, and the outlier threshold for high-cost 
cases. This proposed rule would apply a MFP adjustment to the FY 2019 
IRF market basket increase factor in accordance with section 
1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction 
to the FY 2019 IRF market basket increase factor in accordance with 
sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. Further, this 
proposed rule contains proposed revisions to remove the 
FIMTM instrument and associated Function Modifiers from the 
IRF-PAI beginning in FY 2020, revise certain IRF coverage requirements, 
and to revise and update the IRF quality reporting requirements that 
are expected to result in some additional financial effects on IRFs. In 
addition, section IX.J. of this proposed rule discusses the 
implementation of the required 2 percentage point reduction of the 
market basket increase factor for any IRF that fails to meet the IRF 
quality reporting requirements, in accordance with section 1886(j)(7) 
of the Act.
    We estimate that the impact of the changes and updates described in 
this proposed rule will be a net estimated increase of $75 million in 
payments to IRF providers. This estimate does not include the 
implementation of the required 2 percentage point reduction of the 
market basket increase factor for any IRF that fails to meet the IRF 
quality reporting requirements (as discussed in section IX.J. of this 
proposed rule). The impact analysis in Table 14 of this proposed rule 
represents the projected effects of the updates to IRF PPS payments for 
FY 2019 compared with the estimated IRF PPS payments in FY 2018. We 
determine the effects by estimating payments while holding all other 
payment variables constant. We use the best data available, but we do 
not attempt to predict behavioral responses to these changes, and we do 
not make adjustments for future changes in such variables as number of 
discharges or case-mix.
    We note that certain events may combine to limit the scope or 
accuracy of our impact analysis, because such an analysis is future-
oriented and, thus, susceptible to forecasting errors because of other 
changes in the forecasted impact time period. Some examples could be 
legislative changes made by the Congress to the Medicare program that 
would impact program funding, or changes specifically related to IRFs. 
Although some of these changes may not necessarily be specific to the 
IRF PPS, the nature of the Medicare program is such that the changes 
may interact, and the complexity of the interaction of these changes 
could make it difficult to predict accurately the full scope of the 
impact upon IRFs.
    In updating the rates for FY 2019, we are proposing standard annual 
revisions described in this proposed rule (for example, the update to 
the wage and market basket indexes used to adjust the federal rates). 
We are also implementing a productivity adjustment to the FY 2019 IRF 
market basket increase factor in accordance with section 
1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 percentage point reduction 
to the FY 2017 IRF market basket increase factor in accordance with 
sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. We estimate the 
total increase in payments to IRFs in FY 2019, relative to FY 2018, 
will be approximately $75 million.
    This estimate is derived from the application of the FY 2019 IRF 
market basket increase factor, as reduced by a productivity adjustment 
in accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and a 0.75 
percentage point reduction in accordance with sections 
1886(j)(3)(C)(ii)(II) and (D)(v) of the Act, which yields an estimated 
increase in aggregate payments to IRFs of $110 million. Furthermore, 
there is an additional estimated $35 million decrease in aggregate 
payments to IRFs due to the proposed update to the outlier threshold 
amount. Outlier payments are estimated to decrease from approximately 
3.4 percent in FY 2018 to 3.0 percent in FY 2019. Therefore, summed 
together, we estimate that these updates will result in a net increase 
in estimated payments of $75 million from FY 2018 to FY 2019.

[[Page 21011]]

    The effects of the proposed updates that impact IRF PPS payment 
rates are shown in Table 14. The following proposed updates that affect 
the IRF PPS payment rates are discussed separately below:
     The effects of the proposed update to the outlier 
threshold amount, from approximately 3.4 percent to 3.0 percent of 
total estimated payments for FY 2019, consistent with section 
1886(j)(4) of the Act.
     The effects of the proposed annual market basket update 
(using the IRF market basket) to IRF PPS payment rates, as required by 
section 1886(j)(3)(A)(i) and sections 1886(j)(3)(C) and (D) of the Act, 
including a productivity adjustment in accordance with section 
1886(j)(3)(C)(i)(I) of the Act, and a 0.75 percentage point reduction 
in accordance with sections 1886(j)(3)(C)(ii)(II) and (D)(v) of the 
Act.
     The effects of applying the proposed budget-neutral labor-
related share and wage index adjustment, as required under section 
1886(j)(6) of the Act.
     The effects of the proposed budget-neutral changes to the 
CMG relative weights and average length of stay values, under the 
authority of section 1886(j)(2)(C)(i) of the Act.
     The total change in estimated payments based on the 
proposed FY 2019 payment changes relative to the estimated FY 2018 
payments.
3. Description of Table 14
    Table 14 categorizes IRFs by geographic location, including urban 
or rural location, and location for CMS's 9 Census divisions (as 
defined on the cost report) of the country. In addition, the table 
divides IRFs into those that are separate rehabilitation hospitals 
(otherwise called freestanding hospitals in this section), those that 
are rehabilitation units of a hospital (otherwise called hospital units 
in this section), rural or urban facilities, ownership (otherwise 
called for-profit, non-profit, and government), by teaching status, and 
by disproportionate share patient percentage (DSH PP). The top row of 
Table 14 shows the overall impact on the 1,124 IRFs included in the 
analysis.
    The next 12 rows of Table 14 contain IRFs categorized according to 
their geographic location, designation as either a freestanding 
hospital or a unit of a hospital, and by type of ownership; all urban, 
which is further divided into urban units of a hospital, urban 
freestanding hospitals, and by type of ownership; and all rural, which 
is further divided into rural units of a hospital, rural freestanding 
hospitals, and by type of ownership. There are 976 IRFs located in 
urban areas included in our analysis. Among these, there are 707 IRF 
units of hospitals located in urban areas and 269 freestanding IRF 
hospitals located in urban areas. There are 148 IRFs located in rural 
areas included in our analysis. Among these, there are 137 IRF units of 
hospitals located in rural areas and 11 freestanding IRF hospitals 
located in rural areas. There are 386 for-profit IRFs. Among these, 
there are 346 IRFs in urban areas and 40 IRFs in rural areas. There are 
621 non-profit IRFs. Among these, there are 534 urban IRFs and 87 rural 
IRFs. There are 117 government-owned IRFs. Among these, there are 96 
urban IRFs and 21 rural IRFs.
    The remaining four parts of Table 14 show IRFs grouped by their 
geographic location within a region, by teaching status, and by DSH PP. 
First, IRFs located in urban areas are categorized for their location 
within a particular one of the nine Census geographic regions. Second, 
IRFs located in rural areas are categorized for their location within a 
particular one of the nine Census geographic regions. In some cases, 
especially for rural IRFs located in the New England, Mountain, and 
Pacific regions, the number of IRFs represented is small. IRFs are then 
grouped by teaching status, including non-teaching IRFs, IRFs with an 
intern and resident to average daily census (ADC) ratio less than 10 
percent, IRFs with an intern and resident to ADC ratio greater than or 
equal to 10 percent and less than or equal to 19 percent, and IRFs with 
an intern and resident to ADC ratio greater than 19 percent. Finally, 
IRFs are grouped by DSH PP, including IRFs with zero DSH PP, IRFs with 
a DSH PP less than 5 percent, IRFs with a DSH PP between 5 and less 
than 10 percent, IRFs with a DSH PP between 10 and 20 percent, and IRFs 
with a DSH PP greater than 20 percent.
    The estimated impacts of each policy described in this proposed 
rule to the facility categories listed are shown in the columns of 
Table 14. The description of each column is as follows:
     Column (1) shows the facility classification categories.
     Column (2) shows the number of IRFs in each category in 
our FY 2019 analysis file.
     Column (3) shows the number of cases in each category in 
our FY 2019 analysis file.
     Column (4) shows the estimated effect of the proposed 
adjustment to the outlier threshold amount.
     Column (5) shows the estimated effect of the proposed 
update to the IRF labor-related share and wage index, in a budget-
neutral manner.
     Column (6) shows the estimated effect of the proposed 
update to the CMG relative weights and average length of stay values, 
in a budget-neutral manner.
     Column (7) compares our estimates of the payments per 
discharge, incorporating all of the proposed policies reflected in this 
proposed rule for FY 2019 to our estimates of payments per discharge in 
FY 2018.
    The average estimated increase for all IRFs is approximately 0.9 
percent. This estimated net increase includes the effects of the 
proposed IRF market basket increase factor for FY 2019 of 2.9 percent, 
reduced by a productivity adjustment of 0.8 percentage point in 
accordance with section 1886(j)(3)(C)(ii)(I) of the Act, and further 
reduced by 0.75 percentage point in accordance with sections 
1886(j)(3)(C)(ii)(II) and (D)(v) of the Act. It also includes the 
approximate 0.4 percent overall decrease in estimated IRF outlier 
payments from the proposed update to the outlier threshold amount. 
Since we are making the proposed updates to the IRF wage index and the 
CMG relative weights in a budget-neutral manner, they will not be 
expected to affect total estimated IRF payments in the aggregate. 
However, as described in more detail in each section, they will be 
expected to affect the estimated distribution of payments among 
providers.

[[Page 21012]]



                                                         Table 14--IRF Impact Table for FY 2019
                                                           [Columns 4 through 7 in percentage]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           FY 2019 CBSA
                 Facility classification                  Number of IRFs     Number of        Outlier     wage index and    CMG weights    Total percent
                                                                               cases                        labor-share                     change \1\
(1)                                                                  (2)             (3)             (4)             (5)             (6)             (7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total...................................................           1,124         401,760            -0.4             0.0             0.0             0.9
Urban unit..............................................             707         169,671            -0.7             0.0             0.0             0.7
Rural unit..............................................             137          22,160            -0.5            -0.3             0.1             0.6
Urban hospital..........................................             269         205,565            -0.2             0.0             0.0             1.2
Rural hospital..........................................              11           4,364            -0.1             0.2             0.1             1.5
Urban For-Profit........................................             346         202,800            -0.2             0.0             0.0             1.2
Rural For-Profit........................................              40           8,534            -0.3             0.0             0.1             1.2
Urban Non-Profit........................................             534         149,934            -0.6             0.0             0.0             0.8
Rural Non-Profit........................................              87          14,874            -0.6            -0.4             0.1             0.5
Urban Government........................................              96          22,502            -0.8            -0.1             0.0             0.5
Rural Government........................................              21           3,116            -0.5            -0.2             0.1             0.7
Urban...................................................             976         375,236            -0.4             0.0             0.0             1.0
Rural...................................................             148          26,524            -0.5            -0.2             0.1             0.7
Urban by region:
    Urban New England...................................              29          16,647            -0.2             0.0             0.0             1.1
    Urban Middle Atlantic...............................             141          53,238            -0.4             0.0             0.0             0.9
    Urban South Atlantic................................             111          49,452            -0.4            -0.3             0.0             0.6
    Urban East North Central............................             172          48,452            -0.5             0.1             0.1             1.0
    Urban East South Central............................              55          35,750            -0.2             0.0            -0.1             1.1
    Urban West North Central............................             109          37,580            -0.4            -0.1             0.0             0.9
    Urban West South Central............................             183          81,790            -0.3             0.4             0.0             1.4
    Urban Mountain......................................              78          28,685            -0.4            -0.3             0.0             0.7
    Urban Pacific.......................................              98          23,642            -0.9             0.1             0.0             0.5
Rural by region:
    Rural New England...................................               5           1,279            -0.5             2.0             0.0             2.8
    Rural Middle Atlantic...............................              11           1,439            -0.6            -0.5             0.0             0.3
    Rural South Atlantic................................              13           2,703            -0.2            -0.5             0.0             0.6
    Rural East North Central............................              25           4,533            -0.4            -0.6             0.1             0.3
    Rural East South Central............................              15           3,713            -0.2            -0.2             0.1             1.1
    Rural West North Central............................              29           4,665            -0.6             0.0             0.1             0.9
    Rural West South Central............................              40           7,141            -0.4            -0.5             0.1             0.5
    Rural Mountain......................................               6             699            -1.1             0.3             0.2             0.7
    Rural Pacific.......................................               4             352            -1.9            -0.4             0.0            -0.9
Teaching status:
    Non-teaching........................................           1,016         356,200            -0.4             0.0             0.0             1.0
    Resident to ADC less than 10%.......................              65          34,206            -0.5             0.0             0.0             0.8
    Resident to ADC 10%-19%.............................              31           9,372            -0.7             0.0             0.0             0.7
    Resident to ADC greater than 19%....................              12           1,982            -0.5             0.5             0.0             1.4
Disproportionate share patient percentage (DSHPP):
    DSH PP = 0%.........................................              36          10,174            -1.2             0.3             0.0             0.5
    DSH PP <5%..........................................             140          54,050            -0.3             0.0             0.0             1.1
    DSH PP 5%-10%.......................................             294         126,929            -0.3             0.0             0.0             1.1
    DSH PP 10%-20%......................................             371         134,581            -0.4             0.0             0.0             0.9
    DSH PP greater than 20%.............................             283          76,026            -0.5            -0.1             0.0             0.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ This column includes the impact of the updates in columns (4), (5), and (6) above, and of the IRF market basket increase factor for FY 2019 (2.9
  percent), reduced by 0.8 percentage point for the productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act, and reduced by 0.75
  percentage point in accordance with sections 1886(j)(3)(C)(ii)(II) and -(D)(v) of the Act.

4. Impact of the Proposed Update to the Outlier Threshold Amount
    The estimated effects of the proposed update to the outlier 
threshold adjustment are presented in column 4 of Table 14. In the FY 
2018 IRF PPS final rule (82 FR 36238), we used FY 2016 IRF claims data 
(the best, most complete data available at that time) to set the 
outlier threshold amount for FY 2018 so that estimated outlier payments 
would equal 3 percent of total estimated payments for FY 2018.
    For this proposed rule, we are using preliminary FY 2017 IRF claims 
data, and, based on that preliminary analysis, we estimate that IRF 
outlier payments as a percentage of total estimated IRF payments would 
be 3.4 percent in FY 2018. Thus, we propose to adjust the outlier 
threshold amount in this proposed rule to set total estimated outlier 
payments equal to 3 percent of total estimated payments in FY 2019. The 
estimated change in total IRF payments for FY 2019, therefore, includes 
an approximate 0.4 percent decrease in payments because the estimated 
outlier portion of total payments is estimated to decrease from 
approximately 3.4 percent to 3 percent.
    The impact of this proposed outlier adjustment update (as shown in 
column 4 of Table 14) is to decrease estimated overall payments to IRFs 
by about 0.4 percent. We estimate the largest decrease in payments from 
the update to the outlier threshold amount to be 1.9 percent for rural 
IRFs in the Pacific region.

[[Page 21013]]

5. Impact of the Proposed CBSA Wage Index and Labor-Related Share
    In column 5 of Table 14, we present the effects of the proposed 
budget-neutral update of the wage index and labor-related share. The 
proposed changes to the wage index and the labor-related share are 
discussed together because the wage index is applied to the labor-
related share portion of payments, so the proposed changes in the two 
have a combined effect on payments to providers. As discussed in 
section V.C. of this proposed rule, we are proposing to update the 
labor-related share from 70.7 percent in FY 2018 to 70.6 percent in FY 
2019.
6. Impact of the Proposed Update to the CMG Relative Weights and 
Average Length of Stay Values
    In column 6 of Table 14, we present the effects of the proposed 
budget-neutral update of the CMG relative weights and average length of 
stay values. In the aggregate, we do not estimate that these proposed 
updates will affect overall estimated payments of IRFs. However, we do 
expect these updates to have small distributional effects.
7. Effects of the Proposed Removal of the FIMTM Instrument 
and Associated Function Modifiers From the IRF-PAI Beginning in FY 2020
    As discussed in section VII. of this proposed rule, we are 
proposing to remove the FIMTM Instrument and Associated 
Function Modifiers from the IRF-PAI beginning in FY 2020. We estimate 
that removal of these data items from the IRF-PAI will reduce 
administrative burden on IRF providers and reduce the costs incurred by 
IRFs by $10.2 million for FY 2020.
8. Effects of Proposed Revisions to Certain IRF PPS Requirements
    As discussed in section VIII. of this proposed rule, in response to 
the RFI, we are proposing to remove and amend certain IRF coverage 
criteria requirements that are overly burdensome on IRF providers 
beginning in FY 2019, that is, all IRF discharges on or after October 
1, 2018. We estimate that the removal and updates to these requirements 
will reduce unnecessary regulatory and administrative burden on IRF 
providers and reduce the costs incurred by IRFs by 40.5 million for FY 
2019.
9. Effects of Proposed Requirements for the IRF QRP for FY 2020
    In accordance with section 1886(j)(7) of the Act, we will reduce by 
2 percentage points the market basket increase factor otherwise 
applicable to an IRF for a fiscal year if the IRF does not comply with 
the requirements of the IRF QRP for that fiscal year. In section VII.K 
of this proposed rule, we discuss the proposed method for applying the 
2 percentage point reduction to IRFs that fail to meet the IRF QRP 
requirements.
    As discussed in section IX.4. of this proposed rule, we are 
proposing to remove two measures from the IRF QRP: Percent of Residents 
or Patients Who Were Assessed and Appropriately Given the Seasonal 
Influenza Vaccine (Short Stay) (NQF #0680) and National Healthcare 
Safety Network (NHSN) Facility-wide Inpatient Hospital-onset 
Methicillin-resistant Staphylococcus aureus (MRSA) Bacteremia Outcome 
Measure (NQF #1716).
    We describe the estimated burden and cost reductions for both of 
these measures in section XI.C of this rule. In summary, the proposed 
IRF QRP measure removals will result in a burden reduction of $2,160.66 
per IRF annually, and $2,428,581.84 for all IRFs annually. We intend to 
continue to closely monitor the effects of the quality reporting 
program on IRFs and to help perpetuate successful reporting outcomes 
through ongoing stakeholder education, national trainings, IRF 
announcements, website postings, CMS Open Door Forums, and general and 
technical help desks.

D. Alternatives Considered

    The following is a discussion of the alternatives considered for 
the IRF PPS updates contained in this proposed rule.
    Section 1886(j)(3)(C) of the Act requires the Secretary to update 
the IRF PPS payment rates by an increase factor that reflects changes 
over time in the prices of an appropriate mix of goods and services 
included in the covered IRF services. Thus, we did not consider 
alternatives to updating payments using the estimated IRF market basket 
increase factor for FY 2019. However, as noted previously in this 
proposed rule, section 1886(j)(3)(C)(ii)(I) of the Act requires the 
Secretary to apply a productivity adjustment to the market basket 
increase factor for FY 2019, and sections 1886(j)(3)(C)(ii)(II) and 
1886(j)(3)(D)(v) of the Act require the Secretary to apply a 0.75 
percentage point reduction to the market basket increase factor for FY 
2019. Thus, in accordance with section 1886(j)(3)(C) of the Act, we 
propose to update the IRF federal prospective payments in this proposed 
rule by 1.35 percent (which equals the 2.9 percent estimated IRF market 
basket increase factor for FY 2019 reduced by a 0.8 percentage point 
productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of 
the Act and further reduced by 0.75 percentage point).
    We considered maintaining the existing CMG relative weights and 
average length of stay values for FY 2019. However, in light of 
recently available data and our desire to ensure that the CMG relative 
weights and average length of stay values are as reflective as possible 
of recent changes in IRF utilization and case-mix, we believe that it 
is appropriate to propose to update the CMG relative weights and 
average length of stay values at this time to ensure that IRF PPS 
payments continue to reflect as accurately as possible the current 
costs of care in IRFs.
    We considered updating facility-level adjustment factors for FY 
2019. However, as discussed in more detail in the FY 2015 final rule 
(79 FR 45872), we believe that freezing the facility-level adjustments 
at FY 2014 levels for FY 2015 and all subsequent years (unless and 
until the data indicate that they need to be further updated) will 
allow us an opportunity to monitor the effects of the substantial 
changes to the adjustment factors for FY 2014, and will allow IRFs time 
to adjust to the previous changes.
    We considered maintaining the existing outlier threshold amount for 
FY 2019. However, analysis of updated FY 2019 data indicates that 
estimated outlier payments would be higher than 3 percent of total 
estimated payments for FY 2019, by approximately 0.4 percent, unless we 
updated the outlier threshold amount. Consequently, we propose 
adjusting the outlier threshold amount in this proposed rule to reflect 
a 0.4 percent decrease thereby setting the total outlier payments equal 
to 3 percent, instead of 3.4 percent, of aggregate estimated payments 
in FY 2019.
    We considered not proposing to remove the FIMTM 
instrument and associated Function Modifiers from the IRF-PAI in this 
proposed rule. However, in light of recently available data located in 
the Quality Indicators section of the IRF-PAI, we believe that removal 
of the FIMTM instrument and associated Function Modifiers is 
appropriate at this time. As the data items located in the Quality 
Indicators section of the IRF-PAI are now collected for all IRFs, we 
believe the collection of the FIM data is no longer necessary and 
creates undue burden on providers. Consequently, we propose removing 
these data items from the IRF-PAI beginning with FY 2020. Additionally, 
the proposed removal of

[[Page 21014]]

the FIMTM Instrument and associated Function Modifiers would 
necessitate the incorporation of the data items from the Quality 
Indicators section of the IRF-PAI into the CMG classification system. 
To ensure that the CMGs, relative weights, and average length of stay 
values are as reflective as possible of recent changes in IRF 
utilization and case-mix, we believe that it is appropriate to 
incorporate the data items from the Quality Indicators section of the 
IRF-PAI into the development of the CMGs beginning with FY 2020.
    We considered not proposing revisions to certain IRF PPS 
requirements in order to reduce burden in this proposed rule. However, 
after the response that we received from providers regarding the RFI 
solicitation, we believed that there were areas in which we could 
reduce unnecessary regulatory and administrative burden on IRF 
providers, while ensuring that IRF patients would continue to receive 
adequate care.

E. Regulatory Review Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on FY 2018 IRF PPS proposed rule will be the number of 
reviewers of this proposed rule. We acknowledge that this assumption 
may understate or overstate the costs of reviewing this proposed rule. 
It is possible that not all commenters reviewed the FY 2018 IRF PPS 
proposed rule in detail, and it is also possible that some reviewers 
chose not to comment on the proposed rule. For these reasons we thought 
that the number of past commenters would be a fair estimate of the 
number of reviewers of this rule. We welcome any comments on the 
approach in estimating the number of entities which will review this 
proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that each 
reviewer reads approximately 50 percent of the rule. We seek comments 
on this assumption.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $105.16 per hour, including overhead and fringe benefits 
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average 
reading speed, we estimate that it would take approximately 2 hours for 
the staff to review half of this proposed rule. For each IRF that 
reviews the rule, the estimated cost is $210.32 (2 hours x $105.16). 
Therefore, we estimate that the total cost of reviewing this regulation 
is $15,984.32 ($210.32 x 76 reviewers).

F. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), in Table 15, we have prepared an accounting statement showing 
the classification of the expenditures associated with the provisions 
of this proposed rule. Table 15 provides our best estimate of the 
increase in Medicare payments under the IRF PPS as a result of the 
proposed updates presented in this proposed rule based on the data for 
1,124 IRFs in our database. In addition, Table 15 presents the costs 
associated with the proposed new IRF quality reporting program 
requirements for FY 2019.

                     TABLE 15--Accounting Statement: Classification of Estimated Expenditure
----------------------------------------------------------------------------------------------------------------
                      Change in estimated transfers from FY 2018 IRF PPS to FY 2019 IRF PPS
-----------------------------------------------------------------------------------------------------------------
                Category                                                 Transfers
----------------------------------------------------------------------------------------------------------------
Annualized Monetized Transfers..........  $75 million.
From Whom to Whom?......................  Federal Government to IRF Medicare Providers.
----------------------------------------------------------------------------------------------------------------
Change in Estimated Costs.......................................................................................
----------------------------------------------------------------------------------------------------------------
                Category                                                   Costs
----------------------------------------------------------------------------------------------------------------
Annualized monetized cost in FY 2019 for  Reduction of $40.5 million.
 IRFs due to the removal of certain IRF
 coverage requirements.
Annualized monetized cost in FY 2020 for  Reduction of $10.2 million.
 IRFs due to the removal of FIM\TM\
 instrument and associated Function
 Modifiers from the IRF-PAI.
Annualized monetized cost in FY 2019 for  Reduction of $2.4 million.
 IRFs due to new quality reporting
 program requirements.
----------------------------------------------------------------------------------------------------------------

G. Conclusion

    Overall, the estimated payments per discharge for IRFs in FY 2019 
are projected to increase by 0.9 percent, compared with the estimated 
payments in FY 2018, as reflected in column 7 of Table 15.
    IRF payments per discharge are estimated to increase by 1.0 percent 
in urban areas and 0.7 percent in rural areas, compared with estimated 
FY 2018 payments. Payments per discharge to rehabilitation units are 
estimated to increase 0.7 percent in urban areas and 0.6 percent in 
rural areas. Payments per discharge to freestanding rehabilitation 
hospitals are estimated to increase 1.2 percent in urban areas and 
increase 1.5 percent in rural areas.
    Overall, IRFs are estimated to experience a net increase in 
payments as a result of the proposed policies in this proposed rule. 
The largest payment increase is estimated to be a 2.8 percent increase 
for rural IRFs located in the New England region. The analysis above, 
together with the remainder of this preamble, provides a Regulatory 
Impact Analysis.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 412

    Administrative practice and procedure, Health facilities, Medicare, 
Puerto Rico, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Department of Health 
and

[[Page 21015]]

Human Services proposes to amend 42 CFR chapter IV as set forth below:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL 
SERVICES

0
1. The authority citation for part 412 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh); sec. 124 of Pub. L. 106-113 (113 Stat. 
1501A-332); sec. 1206 of Pub. L. 113-67; sec. 112 of Pub. L. 113-93; 
sec. 231 of Pub. L. 114-113; and secs. 15004, 15006, 15007, 15008, 
15009, and 15010 of Pub. L. 114-255.


Sec.  412.606   [Amended]

0
2. Section 412.606 is amended by--
0
a. Removing paragraph (a); and
0
b. Redesignating paragraphs (b) and (c) as paragraphs (a) and (b).
0
3. Section 412.622 is amended by--
0
a. Revising paragraph (a)(3)(iv);
0
b. Redesignating paragraphs (a)(5)(A) through (C) as paragraphs 
(a)(5)(i) through (iii); and
0
c. Revising newly redesignated paragraph (a)(5)(i).
    The revisions read as follows:


Sec.  412.622  Basis of payment.

    (a) * * *
    (3) * * *
    (iv) Requires physician supervision by a rehabilitation physician, 
defined as a licensed physician with specialized training and 
experience in inpatient rehabilitation. The requirement for medical 
supervision means that the rehabilitation physician must conduct face-
to-face visits with the patient at least 3 days per week throughout the 
patient's stay in the IRF to assess the patient both medically and 
functionally, as well as to modify the course of treatment as needed to 
maximize the patient's capacity to benefit from the rehabilitation 
process. The post-admission physician evaluation described in paragraph 
(a)(4)(ii) of this section may count as one of the face-to-face visits.
* * * * *
    (5) * * *
    (i) The team meetings are led by a rehabilitation physician as 
defined in paragraph (a)(3)(iv) of this section, and further consist of 
a registered nurse with specialized training or experience in 
rehabilitation; a social worker or case manager (or both); and a 
licensed or certified therapist from each therapy discipline involved 
in treating the patient. All team members must have current knowledge 
of the patient's medical and functional status. The rehabilitation 
physician may lead the interdisciplinary team meeting remotely via a 
mode of communication such as video or telephone conferencing.
* * * * *
0
4. Section 412.624 is amended by revising paragraph (c)(4)(i) and 
adding paragraph (c)(4)(iii) to read as follows:


Sec.  412.624   Methodology for calculating the Federal prospective 
payment rates.

* * * * *
    (c) * * *
    (4) * * *
    (i) In the case of an IRF that is paid under the prospective 
payment system specified in Sec.  412.1(a)(3) of this part that does 
not submit quality data to CMS in accordance with Sec.  412.634, the 
applicable increase factor specified in paragraph (a)(3) of this 
section, after application of paragraphs (C)(iii) and (D) of section 
1886(j)(3) of the Act, is reduced by 2 percentage points.
* * * * *
    (iii) The 2 percentage point reduction described in paragraph 
(c)(4)(i) of this section may result in the applicable increase factor 
specified in paragraph (a)(3) of this section being less than 0.0 for a 
fiscal year, and may result in payment rates under the prospective 
payment system specified in Sec.  412.1(a)(3) of this part for a fiscal 
year being less than such payment rates for the preceding fiscal year.
* * * * *
0
5. Section 412.634 is amended by revising the paragraph (b) subject 
heading and paragraphs (b)(1) and (2) and (d)(1) and (5) to read as 
follows:


Sec.  412.634   Requirements under the Inpatient Rehabilitation 
Facility (IRF) Quality Reporting Program (QRP).

* * * * *
    (b) Submission requirements. (1) IRFs must submit to CMS data on 
measures specified under sections 1886(j)(7)(D), 1899B(c)(1), 
1899B(d)(1) of the Act, and standardized patient assessment data 
required under section 1899B(b)(1) of the Act, as applicable. Such data 
must be submitted in the form and manner, and at a time, specified by 
CMS.
    (2) CMS may remove a quality measure from the IRF QRP based on one 
or more of the following factors:
    (i) Measure performance among IRFs is so high and unvarying that 
meaningful distinctions in improvements in performance can no longer be 
made;
    (ii) Performance or improvement on a measure does not result in 
better patient outcomes;
    (iii) The measure does not align with current clinical guidelines 
or practice;
    (iv) A more broadly applicable measure (across settings, 
populations, or conditions) for the particular topic is available;
    (v) A measure that is more proximal in time to desired patient 
outcomes for the particular topic is available;
    (vi) A measure that is more strongly associated with desired 
patient outcomes for the particular topic is available;
    (vii) The collection or public reporting of the measure leads to 
negative unintended consequences other than patient harm;
    (viii) The costs associated with the measure outweigh the benefit 
of its continued use in the IRF QRP.
* * * * *
    (d) * * *
    (1) IRFs that do not meet the requirement in paragraph (b) of this 
section for a program year will receive a written notification of non-
compliance through at least one of the following methods: Quality 
Improvement and Evaluation System Assessment Submission and Processing 
(QIES ASAP) system, the United States Postal Service, or via an email 
from the Medicare Administrative Contractor (MAC).
* * * * *
    (5) CMS will notify IRFs, in writing, of its final decision 
regarding any reconsideration request through at least one of the 
following methods: QIES ASAP system, the United States Postal Service, 
or via an email from the Medicare Administrative Contractor (MAC).
* * * * *

    Dated: April 18, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: April 20, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2018-08961 Filed 4-27-18; 4:15 pm]
 BILLING CODE 4120-01-P