48424 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

DEPARTMENT OF HEALTH AND Catie Cooksey, (410) 786–0179, for determined by the IRF to have HUMAN SERVICES information about the IRF payment specialized training and experience in policies and payment rates. inpatient rehabilitation to conduct 1 of Centers for Medicare & Medicaid Kadie Derby, (410) 786–0468, for the 3 required face-to-face visits with Services information about the IRF coverage the patient per week, provided that such policies. duties are within the non-physician 42 CFR Part 412 SUPPLEMENTARY INFORMATION: practitioner’s scope of practice under [CMS–1729–F] applicable state law. There are no Availability of Certain Information updates in this final rule to the IRF RIN 0938–AU05 Through the Internet on the CMS Quality Reporting Program (QRP). Website Medicare Program; Inpatient The IRF PPS Addenda along with B. Waiver of the 60-Day Delayed Rehabilitation Facility Prospective other supporting documents and tables Effective Date for the Final Rule Payment System for Federal Fiscal referenced in this final rule are available Year 2021 The United States is responding to an through the internet on the CMS website outbreak of respiratory disease caused at https://www.cms.gov/Medicare/ AGENCY: Centers for Medicare & by a novel (new) coronavirus that has Medicare-Fee-for-Service-Payment/ Medicaid Services (CMS), HHS. now been detected in more than 190 ACTION: Final rule. InpatientRehabFacPPS. We note that in previous years, each locations internationally, including in SUMMARY: This final rule updates the rule or notice issued under the IRF PPS all 50 States and the District of prospective payment rates for inpatient has included a detailed reiteration of the Columbia. The virus has been named rehabilitation facilities (IRFs) for various regulatory provisions that have ‘‘SARS-CoV–2’’ and the disease it Federal fiscal year (FY) 2021. As affected the IRF PPS over the years. That causes has been named ‘‘coronavirus required by statute, this final rule discussion, along with detailed disease 2019’’ (abbreviated ‘‘COVID– includes the classification and background information for various 19’’). weighting factors for the IRF prospective other aspects of the IRF PPS, is now Due to CMS prioritizing efforts in payment system’s case-mix groups and available on the CMS website at https:// support of containing and combatting a description of the methodologies and www.cms.gov/Medicare/Medicare-Fee- the COVID–19 PHE, and devoting data used in computing the prospective for-Service-Payment/InpatientRehab significant resources to that end, as payment rates for FY 2021. This final FacPPS. discussed and for the reasons discussed rule adopts more recent Office of I. Executive Summary in section XIII. of this final rule, we are Management and Budget statistical area hereby waiving the 60-day requirement delineations and applies a 5 percent cap A. Purpose and determining that the IRF PPS final on any wage index decreases compared This final rule updates the rule will take effect 55 days after to FY 2020 in a budget neutral manner. prospective payment rates for IRFs for issuance. This final rule also amends the IRF FY 2021 (that is, for discharges C. Summary of Major Provisions coverage requirements to remove the occurring on or after October 1, 2020, post-admission physician evaluation and on or before September 30, 2021) as In this final rule, we use the methods requirement and codifies existing required under section 1886(j)(3)(C) of described in the FY 2020 IRF PPS final documentation instructions and the Social Security Act (the Act). As rule (84 FR 39054) to update the guidance. In addition, this final rule required by section 1886(j)(5) of the Act, prospective payment rates for FY 2021 amends the IRF coverage requirements this final rule includes the classification using updated FY 2019 IRF claims and to allow, beginning with the second and weighting factors for the IRF PPS’s the most recent available IRF cost report week of admission to the IRF, a non- case-mix groups (CMGs) and a data, which is FY 2018 IRF cost report physician practitioner who is description of the methodologies and data. This final rule adopts more recent determined by the IRF to have data used in computing the prospective OMB statistical area delineations and specialized training and experience in payment rates for FY 2021. This final applies a 5 percent cap on any wage inpatient rehabilitation to conduct 1 of rule adopts more recent Office of index decreases compared to FY 2020 in the 3 required face-to-face visits with Management and Budget (OMB) a budget neutral manner. This final rule the patient per week, provided that such statistical area delineations and applies also amends the IRF coverage duties are within the non-physician a 5 percent cap on any wage index requirements to remove the post- practitioner’s scope of practice under decreases compared to FY 2020 in a applicable state law. admission physician evaluation budget neutral manner. This final rule requirement and codifies existing DATES: These regulations are effective also amends the IRF coverage documentation instructions and on October 1, 2020. requirements to remove the post- guidance. In addition, this final rule Applicability dates: The updated IRF admission physician evaluation amends the IRF coverage requirements prospective payment rates are requirement and codifies existing to allow non-physician practitioners to applicable for IRF discharges occurring documentation instructions and perform some of the weekly visits, on or after October 1, 2020, and on or guidance. In addition, this final rule provided that such duties are within the before September 30, 2021 (FY 2021). amends the IRF coverage requirements non-physician practitioner’s scope of FOR FURTHER INFORMATION CONTACT: to allow, beginning with the second practice under applicable state law. Gwendolyn Johnson, (410) 786–6954, week of admission to the IRF, a non- for general information. physician practitioner who is D. Summary of Impact

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48425

TABLE 1—COST AND BENEFIT

Provision description Transfers

FY 2021 IRF PPS payment rate up- The overall economic impact of this final rule is an estimated $260 million in increased payments from date. the Federal Government to IRFs during FY 2021.

II. Background determining the standard payment percentage (LIP), and high-cost outlier conversion factor. adjustments. Beginning with the FY A. Statutory Basis and Scope We applied the relative weighting 2006 IRF PPS final rule (70 FR 47908 Section 1886(j) of the Act provides for factors to the standard payment through 47917), the market basket index the implementation of a per-discharge conversion factor to compute the used to update IRF payments was a PPS for inpatient rehabilitation unadjusted prospective payment rates market basket reflecting the operating hospitals and inpatient rehabilitation under the IRF PPS from FYs 2002 and capital cost structures for units of a hospital (collectively, through 2005. Within the structure of freestanding IRFs, freestanding inpatient hereinafter referred to as IRFs). the payment system, we then made psychiatric facilities (IPFs), and long- Payments under the IRF PPS encompass adjustments to account for interrupted term care hospitals (LTCHs) (hereinafter inpatient operating and capital costs of stays, transfers, short stays, and deaths. referred to as the rehabilitation, furnishing covered rehabilitation Finally, we applied the applicable psychiatric, and long-term care (RPL) services (that is, routine, ancillary, and adjustments to account for geographic market basket). Any reference to the FY capital costs), but not direct graduate variations in wages (wage index), the 2006 IRF PPS final rule in this final rule medical education costs, costs of percentage of low-income patients, also includes the provisions effective in approved nursing and allied health location in a rural area (if applicable), the correcting amendments. For a education activities, bad debts, and and outlier payments (if applicable) to detailed discussion of the final key other services or items outside the scope the IRFs’ unadjusted prospective policy changes for FY 2006, please refer of the IRF PPS. A complete discussion payment rates. to the FY 2006 IRF PPS final rule. of the IRF PPS provisions appears in the For cost reporting periods that began The regulatory history previously original FY 2002 IRF PPS final rule (66 on or after January 1, 2002, and before included in each rule or notice issued FR 41316) and the FY 2006 IRF PPS October 1, 2002, we determined the under the IRF PPS is available on the final rule (70 FR 47880), and we final prospective payment amounts CMS website at https://www.cms.gov/ provided a general description of the using the transition methodology Medicare/Medicare-Fee-for-Service- IRF PPS for FYs 2007 through 2019 in prescribed in section 1886(j)(1) of the Payment/InpatientRehabFacPPS/ the FY 2020 IRF PPS final rule (84 FR Act. Under this provision, IRFs index?redirect=/InpatientRehabFacPPS/ 39055 through 39057). transitioning into the PPS were paid a . Under the IRF PPS from FY 2002 blend of the Federal IRF PPS rate and through FY 2005, the prospective the payment that the IRFs would have B. Provisions of the PPACA Affecting payment rates were computed across received had the IRF PPS not been the IRF PPS in FY 2012 and Beyond 100 distinct CMGs, as described in the implemented. This provision also FY 2002 IRF PPS final rule (66 FR allowed IRFs to elect to bypass this The Patient Protection and Affordable 41316). We constructed 95 CMGs using blended payment and immediately be Care Act (PPACA) (Pub. L. 111–148) rehabilitation impairment categories paid 100 percent of the Federal IRF PPS was enacted on March 23, 2010. The (RICs), functional status (both motor and rate. The transition methodology Health Care and Education cognitive), and age (in some cases, expired as of cost reporting periods Reconciliation Act of 2010 (Pub. L. 111– cognitive status and age may not be a beginning on or after October 1, 2002 152), which amended and revised factor in defining a CMG). In addition, (FY 2003), and payments for all IRFs several provisions of the PPACA, was we constructed five special CMGs to now consist of 100 percent of the enacted on March 30, 2010. In this final account for very short stays and for Federal IRF PPS rate. rule, we refer to the two statutes patients who expire in the IRF. Section 1886(j) of the Act confers collectively as the ‘‘Patient Protection For each of the CMGs, we developed broad statutory authority upon the and Affordable Care Act’’ or ‘‘PPACA’’. relative weighting factors to account for Secretary to propose refinements to the The PPACA included several a patient’s clinical characteristics and IRF PPS. In the FY 2006 IRF PPS final provisions that affect the IRF PPS in FYs expected resource needs. Thus, the rule (70 FR 47880) and in correcting 2012 and beyond. In addition to what weighting factors accounted for the amendments to the FY 2006 IRF PPS was previously discussed, section relative difference in resource use across final rule (70 FR 57166), we finalized a 3401(d) of the PPACA also added all CMGs. Within each CMG, we created number of refinements to the IRF PPS section 1886(j)(3)(C)(ii)(I) of the Act tiers based on the estimated effects that case-mix classification system (the (providing for a ‘‘productivity certain comorbidities would have on CMGs and the corresponding relative adjustment’’ for fiscal year (FY) 2012 resource use. weights) and the case-level and facility- and each subsequent FY). The We established the Federal PPS rates level adjustments. These refinements productivity adjustment for FY 2021 is using a standardized payment included the adoption of the OMB’s discussed in section VI.B. of this final conversion factor (formerly referred to Core-Based Statistical Area (CBSA) rule. Section 1886(j)(3)(C)(ii)(II) of the as the budget-neutral conversion factor). market definitions; modifications to the Act provides that the application of the For a detailed discussion of the budget- CMGs, tier comorbidities; and CMG productivity adjustment to the market neutral conversion factor, please refer to relative weights, implementation of a basket update may result in an update our FY 2004 IRF PPS final rule (68 FR new teaching status adjustment for IRFs; that is less than 0.0 for a FY and in 45684 through 45685). In the FY 2006 rebasing and revising the market basket payment rates for a FY being less than IRF PPS final rule (70 FR 47880), we index used to update IRF payments, and such payment rates for the preceding discussed in detail the methodology for updates to the rural, low-income FY.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48426 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

Sections 3004(b) of the PPACA and The Grouper software produces a five- submitted on paper are available at section 411(b) of the Medicare Access character CMG number. The first http://www.cms.gov/manuals/ and CHIP Reauthorization Act of 2015 character is an alphabetic character that downloads/clm104c25.pdf. (Pub. L. 114–10, enacted on April 16, indicates the comorbidity tier. The last Section 3 of the ASCA operates in the 2015) (MACRA) also addressed the IRF four characters are numeric characters context of the administrative PPS. Section 3004(b) of PPACA that represent the distinct CMG number. simplification provisions of HIPAA, reassigned the previously designated A free download of the Grouper which include, among others, the section 1886(j)(7) of the Act to section software is available on the CMS requirements for transaction standards 1886(j)(8) of the Act and inserted a new website at http://www.cms.gov/ and code sets codified in 45 CFR part section 1886(j)(7) of the Act, which Medicare/Medicare-Fee-for-Service- 160 and part 162, subparts A and I contains requirements for the Secretary Payment/InpatientRehabFacPPS/ through R (generally known as the to establish a quality reporting program Software.html. The Grouper software is Transactions Rule). The Transactions (QRP) for IRFs. Under that program, also embedded in the iQIES User tool Rule requires covered entities, including data must be submitted in a form and available in iQIES at https:// covered health care providers, to manner and at a time specified by the www.cms.gov/medicare/quality-safety- conduct covered electronic transactions Secretary. Beginning in FY 2014, section oversight-general-information/iqies. according to the applicable transaction 1886(j)(7)(A)(i) of the Act requires the Once a Medicare Part A FFS patient standards. (See the CMS program claim application of a 2 percentage point is discharged, the IRF submits a memoranda at http://www.cms.gov/ reduction to the market basket increase Medicare claim as a Health Insurance ElectronicBillingEDITrans/ and listed in factor otherwise applicable to an IRF Portability and Accountability Act of the addenda to the Medicare (after application of paragraphs (C)(iii) 1996 (HIPAA) (Pub. L. 104–191, enacted Intermediary Manual, Part 3, section and (D) of section 1886(j)(3) of the Act) on August 21, 1996)—compliant 3600). for a FY if the IRF does not comply with electronic claim or, if the The MAC processes the claim through the requirements of the IRF QRP for that Administrative Simplification its software system. This software FY. Application of the 2 percentage Compliance Act of 2002 (ASCA) (Pub. L. system includes pricing programming point reduction may result in an update 107–105, enacted on December 27, called the ‘‘Pricer’’ software. The Pricer that is less than 0.0 for a FY and in 2002) permits, a paper claim (a UB–04 software uses the CMG number, along payment rates for a FY being less than or a CMS–1450 as appropriate) using the with other specific claim data elements such payment rates for the preceding five-character CMG number and sends it and provider-specific data, to adjust the FY. Reporting-based reductions to the to the appropriate Medicare IRF’s prospective payment for market basket increase factor are not Administrative Contractor (MAC). In interrupted stays, transfers, short stays, cumulative; they only apply for the FY addition, once a MA patient is and deaths, and then applies the involved. Section 411(b) of the MACRA discharged, in accordance with the applicable adjustments to account for amended section 1886(j)(3)(C) of the Act Medicare Claims Processing Manual, the IRF’s wage index, percentage of low- by adding paragraph (iii), which chapter 3, section 20.3 (Pub. L. 100–04), income patients, rural location, and required us to apply for FY 2018, after hospitals (including IRFs) must submit outlier payments. For discharges the application of section an informational-only bill (type of bill occurring on or after October 1, 2005, 1886(j)(3)(C)(ii) of the Act, an increase (TOB) 111), which includes Condition the IRF PPS payment also reflects the factor of 1.0 percent to update the IRF Code 04 to their MAC. This will ensure teaching status adjustment that became prospective payment rates. that the MA days are included in the effective as of FY 2006, as discussed in hospital’s Supplemental Security the FY 2006 IRF PPS final rule (70 FR C. Operational Overview of the Current Income (SSI) ratio (used in calculating 47880). IRF PPS the IRF LIP adjustment) for FY 2007 and D. Advancing Health Information As described in the FY 2002 IRF PPS beyond. Claims submitted to Medicare Exchange final rule (66 FR 41316), upon the must comply with both ASCA and admission and discharge of a Medicare HIPAA. The Department of Health and Human Part A fee-for-service (FFS) patient, the Section 3 of the ASCA amended Services (HHS) has a number of IRF is required to complete the section 1862(a) of the Act by adding initiatives designed to encourage and appropriate sections of a Patient paragraph (22), which requires the support the adoption of interoperable Assessment Instrument (PAI), Medicare program, subject to section health information technology and to designated as the IRF–PAI. In addition, 1862(h) of the Act, to deny payment promote nationwide health information beginning with IRF discharges occurring under Part A or Part B for any expenses exchange to improve health care and on or after October 1, 2009, the IRF is for items or services for which a claim patient access to their health also required to complete the is submitted other than in an electronic information. The Office of the National appropriate sections of the IRF–PAI form specified by the Secretary. Section Coordinator for Health Information upon the admission and discharge of 1862(h) of the Act, in turn, provides that Technology (ONC) and CMS work each Medicare Advantage (MA) patient, the Secretary shall waive such denial in collaboratively to advance as described in the FY 2010 IRF PPS situations in which there is no method interoperability across settings of care, final rule (74 FR 39762 and 74 FR available for the submission of claims in including post-acute care. 50712). All required data must be an electronic form or the entity To further interoperability in post- electronically encoded into the IRF–PAI submitting the claim is a small provider. acute care settings, CMS continues to software product. Generally, the In addition, the Secretary also has the explore opportunities to advance software product includes patient authority to waive such denial in such electronic exchange of patient classification programming called the unusual cases as the Secretary finds information across payers, providers Grouper software. The Grouper software appropriate. For more information, see and with patients, including developing uses specific IRF–PAI data elements to the ‘‘Medicare Program; Electronic systems that use nationally recognized classify (or group) patients into distinct Submission of Medicare Claims’’ final health IT standards such as the Logical CMGs and account for the existence of rule (70 FR 71008). Our instructions for Observation Identifiers Names and any relevant comorbidities. the limited number of Medicare claims Codes (LOINC), the Systematized

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48427

Nomenclature of Medicine (SNOMED), On May 1 2020, ONC and CMS IRF PPS proposed rule (85 FR 22065, and the Fast Healthcare Interoperability published the final rules, ‘‘21st Century 22069 through 22073). Resources (FHIR). In addition, CMS and Cures Act: Interoperability, Information • Update the IRF PPS payment rates ONC established the Post-Acute Care Blocking, and the ONC Health IT for FY 2021 by the proposed market Interoperability Workgroup (PACIO) to Certification Program,’’ 1 (85 FR 25642) basket increase factor, based upon the facilitate collaboration with industry and ‘‘Patient Access and most current data available, with a stakeholders to develop FHIR standards Interoperability’’ 2 (85 FR 25510) to proposed productivity adjustment that could support the exchange and promote secure and more immediate required by section 1886(j)(3)(C)(ii)(I) of reuse of patient assessment data derived access to health information for patients the Act, as described in section V. of the from the minimum data set (MDS), and healthcare providers through the FY 2021 IRF PPS proposed rule (85 FR inpatient rehabilitation facility patient use of standards-based application 22065, 22073 through 22075). assessment instrument (IRF–PAI), long programming interfaces (APIs) that • Adopt the revised OMB term care hospital continuity enable easier access to electronic health delineations, the proposed IRF wage assessment record and evaluation information. The CMS Interoperability index transition, and the proposed (LCDS), outcome and assessment and Patient Access rule also finalizes a update to the labor-related share for FY information set (OASIS) and other new regulation under the Conditions of 2021 in a budget-neutral manner, as sources. Participation for hospitals (85 FR described in section V. of the FY 2021 The Data Element Library (DEL) 25584), including CAHs and psychiatric IRF PPS proposed rule (85 FR 22065, continues to be updated and serves as hospitals, which will require these 22075 through 22080). • the authoritative resource for PAC providers to send electronic patient Describe the calculation of the IRF assessment data elements and their event notifications of a patient’s standard payment conversion factor for associated mappings to health IT admission, discharge, and/or transfer to FY 2021, as discussed in section V. of standards. The DEL furthers CMS’ goal appropriate recipients, including the FY 2021 IRF PPS proposed rule (85 applicable post-acute care providers and FR 22065, 22080 through 22081). of data standardization and • interoperability. These interoperable suppliers. These notifications can help Update the outlier threshold data elements can reduce provider alert post-acute care providers and amount for FY 2021, as discussed in burden by allowing the use and suppliers when a patient has been seen section VI. of the FY 2021 IRF PPS exchange of healthcare data, support in the ED or admitted to the hospital, proposed rule (85 FR 22065, 22084 provider exchange of electronic health supporting more effective care through 22085). • Update the cost-to-charge ratio information for care coordination, coordination across settings. We invite (CCR) ceiling and urban/rural average person-centered care, and support real- providers to learn more about these CCRs for FY 2021, as discussed in time, data driven, clinical decision important developments and how they section VI. of the FY 2021 IRF PPS making. Standards in the Data Element are likely to affect IRFs. proposed rule (85 FR 22065, 22085 Library (https://del.cms.gov/DELWeb/ III. Summary of Provisions of the through 22086). pubHome) can be referenced on the Proposed Rule • Amend the IRF coverage CMS website and in the ONC requirements to remove the post- Interoperability Standards Advisory In the FY 2021 IRF PPS proposed admission physician evaluation (ISA). The 2020 ISA is available at rule, we proposed to update the IRF requirement as discussed in section VII. https://www.healthit.gov/isa. prospective payment rates for FY 2021. of the FY 2021 IRF PPS proposed rule In the September 30, 2019 Federal We also proposed to adopt more recent (85 FR 22065, 22086 through 22087). Register, CMS published a final rule, Office of Management and Budget • Amend the IRF coverage ‘‘Medicare and Medicaid Programs; statistical area delineations and apply a requirements to codify existing Revisions to Requirements for Discharge 5 percent cap on any wage index documentation instructions and Planning’’ (84 FR 51836) (‘‘Discharge decreases compared to FY 2020 in a guidance as discussed in section VIII. of Planning final rule’’), that revises the budget neutral manner. We also the FY 2021 IRF PPS proposed rule (85 discharge planning requirements that proposed to amend the IRF coverage FR 22065, 22087 through 22088). hospitals (including psychiatric requirements to remove the post- • Amend the IRF coverage hospitals, long-term care hospitals, and admission physician evaluation requirements to allow non-physician inpatient rehabilitation facilities), requirement and codify existing practitioners to perform certain critical access hospitals (CAHs), and documentation instructions and requirements that are currently required home health agencies, must meet to guidance. Additionally, we proposed to to be performed by a rehabilitation participate in Medicare and Medicaid amend the IRF coverage requirements to physician, if permitted under state law, programs. The rule supports CMS’ allow non-physician practitioners to as discussed in section IX. of the FY interoperability efforts by promoting the perform certain requirements that are 2021 IRF PPS proposed rule (85 FR exchange of patient information currently required to be performed by a 22065, 22088 through 22090). between health care settings, and by rehabilitation physician. • Describe the method for applying ensuring that a patient’s necessary The proposed policy changes and the reduction to the FY 2021 IRF medical information is transferred with updates to the IRF prospective payment increase factor for IRFs that fail to meet the patient after discharge from a rates for FY 2021 are as follows: the quality reporting requirements as hospital, CAH, or post-acute care • Update the CMG relative weights discussed in section X. of the FY 2021 services provider. For more information and average length of stay values for FY IRF PPS proposed rule (85 FR 22065, on the Discharge planning requirements, 2021, in a budget neutral manner, as 22090). please visit the final rule at https:// discussed in section IV. of the FY 2021 www.federalregister.gov/documents/ IV. Analysis of and Responses to Public 2019/09/30/2019-20732/medicare-and- Comments 1 https://www.govinfo.gov/content/pkg/FR-2020- medicaid-programs-revisions-to- 05-01/pdf/2020-07419.pdf. We received 2,668 timely responses requirements-for-discharge-planning- 2 https://www.govinfo.gov/content/pkg/FR-2020- from the public, many of which for-hospitals. 05-01/pdf/2020-05050.pdf. contained multiple comments on the FY

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48428 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

2021 IRF PPS proposed rule (85 FR publication of the final rule, we would We note that, as we typically do, we 22065). We received comments from use such data to determine the FY 2021 updated our data between the FY 2021 various trade associations, inpatient CMG relative weights and average IRF PPS proposed and final rules to rehabilitation facilities, individual length of stay values in the final rule. ensure that we use the most recent physicians, therapists, clinicians, health We proposed to apply these data available data in calculating IRF PPS care industry organizations, health care using the same methodologies that we payments. This updated data reflects a consulting firms, individual have used to update the CMG relative more complete set of claims for FY 2019 beneficiaries, and beneficiary groups. weights and average length of stay and additional cost report data for FY The following sections, arranged by values each FY since we implemented 2018. To calculate the appropriate subject area, include a summary of the an update to the methodology to use the budget neutrality factor for use in public comments that we received, and more detailed CCR data from the cost updating the FY 2021 CMG relative our responses. reports of IRF provider units of primary weights, we use the following steps: acute care hospitals, instead of CCR data Step 1. Calculate the estimated total V. Update to the Case-Mix Group from the associated primary care amount of IRF PPS payments for FY (CMG) Relative Weights and Average hospitals, to calculate IRFs’ average 2021 (with no changes to the CMG Length of Stay Values for FY 2021 costs per case, as discussed in the FY relative weights). As specified in § 412.620(b)(1), we 2009 IRF PPS final rule (73 FR 46372). Step 2. Calculate the estimated total calculate a relative weight for each CMG In calculating the CMG relative weights, amount of IRF PPS payments for FY that is proportional to the resources we use a hospital-specific relative value 2021 by applying the changes to the needed by an average inpatient method to estimate operating (routine CMG relative weights (as discussed in rehabilitation case in that CMG. For and ancillary services) and capital costs this final rule). example, cases in a CMG with a relative of IRFs. The process used to calculate Step 3. Divide the amount calculated weight of 2, on average, will cost twice the CMG relative weights for this final in step 1 by the amount calculated in as much as cases in a CMG with a rule is as follows: step 2 to determine the budget relative weight of 1. Relative weights Step 1. We estimate the effects that neutrality factor of 0.9970 that would account for the variance in cost per comorbidities have on costs. maintain the same total estimated discharge due to the variance in Step 2. We adjust the cost of each aggregate payments in FY 2021 with and resource utilization among the payment Medicare discharge (case) to reflect the without the changes to the CMG relative groups, and their use helps to ensure effects found in the first step. weights. that IRF PPS payments support Step 3. We use the adjusted costs from Step 4. Apply the budget neutrality beneficiary access to care, as well as the second step to calculate CMG factor from step 3 to the FY 2021 IRF provider efficiency. relative weights, using the hospital- PPS standard payment amount after the We proposed to update the CMG specific relative value method. application of the budget-neutral wage relative weights and average length of Step 4. We normalize the FY 2021 adjustment factor. stay values for FY 2021. As required by CMG relative weights to the same In section VI.D. of this final rule, we statute, we always use the most recent average CMG relative weight from the discuss the use of the existing available data to update the CMG CMG relative weights implemented in methodology to calculate the standard relative weights and average lengths of the FY 2020 IRF PPS final rule (84 FR payment conversion factor for FY 2021. stay. For FY 2021, we proposed to use 39054). In Table 2, ‘‘Relative Weights and the FY 2019 IRF claims and FY 2018 Consistent with the methodology that Average Length of Stay Values for IRF cost report data. These data are the we have used to update the IRF Revised Case-Mix Groups,’’ we present most current and complete data classification system in each instance in the CMGs, the comorbidity tiers, the available at this time. Currently, only a the past, we proposed to update the corresponding relative weights, and the small portion of the FY 2019 IRF cost CMG relative weights for FY 2021 in average length of stay values for each report data are available for analysis, but such a way that total estimated CMG and tier for FY 2021. The average the majority of the FY 2019 IRF claims aggregate payments to IRFs for FY 2021 length of stay for each CMG is used to data are available for analysis. We also are the same with or without the determine when an IRF discharge meets proposed that if more recent data changes (that is, in a budget-neutral the definition of a short-stay transfer, become available after the publication of manner) by applying a budget neutrality which results in a per diem case level the proposed rule and before the factor to the standard payment amount. adjustment. TABLE 2—RELATIVE WEIGHTS AND AVERAGE LENGTH OF STAY VALUES FOR THE REVISED CASE-MIX GROUPS

Relative weight Average length of stay CMG CMG description No No (M = motor, A = age) Tier 1 Tier 2 Tier 3 comorbidity Tier 1 Tier 2 Tier 3 comorbidity tier tier

0101 ... Stroke M >=72.50 ...... 1.0314 0.8818 0.8182 0.7830 10 10 10 9 0102 ... Stroke M >=63.50 and M <72.50 ...... 1.3174 1.1262 1.0451 1.0001 13 13 12 11 0103 ... Stroke M >=50.50 and M <63.50 ...... 1.6846 1.4401 1.3363 1.2789 15 16 15 14 0104 ... Stroke M >=41.50 and M <50.50 ...... 2.1886 1.8710 1.7361 1.6615 19 19 18 18 0105 ... Stroke M <41.50 and A >=84.50 ...... 2.4829 2.1226 1.9696 1.8850 23 23 21 20 0106 ... Stroke M <41.50 and A <84.50 ...... 2.8525 2.4385 2.2628 2.1655 26 24 23 23 0201 ... Traumatic brain injury M >=73.50 ...... 1.1495 0.9399 0.8443 0.7891 10 11 10 10 0202 ... Traumatic brain injury M >=61.50 and M <73.50 ..... 1.4440 1.1807 1.0606 0.9913 12 14 12 12 0203 ... Traumatic brain injury M >=49.50 and M <61.50 ..... 1.7411 1.4235 1.2787 1.1952 15 15 14 14 0204 ... Traumatic brain injury M >=35.50 and M <49.50 ..... 2.1669 1.7718 1.5915 1.4876 20 19 17 16 0205 ... Traumatic brain injury M <35.50 ...... 2.7369 2.2377 2.0101 1.8788 32 24 21 18 0301 ... Non-traumatic brain injury M >=65.50 ...... 1.2263 0.9941 0.9185 0.8514 11 11 10 10 0302 ... Non-traumatic brain injury M >=52.50 and M 1.5711 1.2737 1.1768 1.0908 14 14 13 12 <65.50.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48429

TABLE 2—RELATIVE WEIGHTS AND AVERAGE LENGTH OF STAY VALUES FOR THE REVISED CASE-MIX GROUPS— Continued

Relative weight Average length of stay CMG CMG description No No (M = motor, A = age) Tier 1 Tier 2 Tier 3 comorbidity Tier 1 Tier 2 Tier 3 comorbidity tier tier

0303 ... Non-traumatic brain injury M >=42.50 and M 1.8808 1.5247 1.4087 1.3058 16 16 15 14 <52.50. 0304 ... Non-traumatic brain injury M <42.50 and A >=78.50 2.1101 1.7105 1.5805 1.4650 19 18 16 16 0305 ... Non-traumatic brain injury M <42.50 and A <78.50 2.3049 1.8685 1.7264 1.6002 21 20 17 17 0401 ... Traumatic spinal cord injury M >=56.50 ...... 1.3684 1.1612 1.0460 0.9718 12 12 12 11 0402 ... Traumatic spinal cord injury M >=47.50 and M 1.7807 1.5110 1.3611 1.2646 16 16 14 15 <56.50. 0403 ... Traumatic spinal cord injury M >=41.50 and M 2.1371 1.8135 1.6336 1.5177 20 20 18 17 <47.50. 0404 ... Traumatic spinal cord injury M <31.50 and A 3.6185 3.0706 2.7660 2.5698 29 35 32 26 <61.50. 0405 ... Traumatic spinal cord injury M >=31.50 and M 2.7444 2.3288 2.0978 1.9490 25 26 22 21 <41.50. 0406 ... Traumatic spinal cord injury M >=24.50 and M 3.5969 3.0522 2.7494 2.5544 34 31 28 28 <31.50 and A >=61.50. 0407 ... Traumatic spinal cord injury M <24.50 and A 4.1070 3.4850 3.1394 2.9166 46 36 32 32 >=61.50. 0501 ... Non-traumatic spinal cord injury M >=60.50 ...... 1.3097 1.0178 0.9609 0.8875 13 12 11 10 0502 ... Non-traumatic spinal cord injury M >=53.50 and M 1.6273 1.2646 1.1939 1.1028 14 14 13 12 <60.50. 0503 ... Non-traumatic spinal cord injury M >=48.50 and M 1.8899 1.4687 1.3866 1.2807 16 16 15 14 <53.50. 0504 ... Non-traumatic spinal cord injury M >=39.50 and M 2.2506 1.7491 1.6513 1.5252 21 19 18 17 <48.50. 0505 ... Non-traumatic spinal cord injury M <39.50 ...... 2.9362 2.2819 2.1543 1.9899 28 24 22 21 0601 ... Neurological M >=64.50 ...... 1.3673 1.0293 0.9649 0.8770 12 11 10 10 0602 ... Neurological M >=52.50 and M <64.50 ...... 1.7016 1.2809 1.2008 1.0915 14 13 12 12 0603 ... Neurological M >=43.50 and M <52.50 ...... 2.0214 1.5216 1.4264 1.2965 16 15 15 14 0604 ... Neurological M <43.50 ...... 2.3456 1.7657 1.6552 1.5045 20 18 17 16 0701 ... Fracture of lower extremity M >=61.50 ...... 1.2473 1.0115 0.9585 0.8811 11 12 11 10 0702 ... Fracture of lower extremity M >=52.50 and M 1.5595 1.2647 1.1985 1.1016 14 14 13 12 <61.50. 0703 ... Fracture of lower extremity M >=41.50 and M 1.8956 1.5373 1.4568 1.3390 17 16 15 15 <52.50. 0704 ... Fracture of lower extremity M <41.50 ...... 2.1660 1.7566 1.6646 1.5300 19 18 17 17 0801 ... Replacement of lower-extremity joint M >=63.50 .... 1.1268 0.9068 0.8121 0.7564 10 10 9 9 0802 ... Replacement of lower-extremity joint M >=57.50 1.3248 1.0661 0.9548 0.8893 12 11 11 10 and M <63.50. 0803 ... Replacement of lower-extremity joint M >=51.50 1.4799 1.1909 1.0666 0.9934 12 13 12 11 and M <57.50. 0804 ... Replacement of lower-extremity joint M >=42.50 1.7056 1.3726 1.2293 1.1449 14 15 13 13 and M <51.50. 0805 ... Replacement of lower-extremity joint M <42.50 ...... 1.9874 1.5994 1.4324 1.3341 17 17 15 14 0901 ... Other orthopedic M >=63.50 ...... 1.2111 0.9651 0.9133 0.8273 11 11 10 10 0902 ... Other orthopedic M >=51.50 and M <63.50 ...... 1.5078 1.2015 1.1371 1.0301 13 13 12 12 0903 ... Other orthopedic M >=44.50 and M <51.50 ...... 1.7744 1.4139 1.3382 1.2122 15 15 14 14 0904 ... Other orthopedic M <44.5 ...... 2.0373 1.6235 1.5365 1.3918 17 17 16 15 1001 ... Amputation lower extremity M >=64.50 ...... 1.2960 1.0863 0.9748 0.9004 12 13 11 11 1002 ... Amputation lower extremity M >=55.50 and M 1.6010 1.3419 1.2042 1.1123 14 15 13 13 <64.50. 1003 ... Amputation lower extremity M >=47.50 and M 1.8708 1.5681 1.4072 1.2997 16 17 15 14 <55.50. 1004 ... Amputation lower extremity M <47.50 ...... 2.2049 1.8481 1.6585 1.5318 18 19 17 16 1101 ... Amputation non-lower extremity M >=58.50 ...... 1.2999 1.1583 1.0117 0.9810 12 11 11 13 1102 ... Amputation non-lower extremity M >=52.50 and M 1.7367 1.5476 1.3517 1.3107 14 13 14 14 <58.50. 1103 ... Amputation non-lower extremity M <52.50 ...... 1.9515 1.7390 1.5188 1.4728 17 13 15 14 1201 ... Osteoarthritis M >=61.50 ...... 1.4251 0.9495 0.9495 0.8718 11 10 10 10 1202 ... Osteoarthritis M >=49.50 and M <61.50 ...... 1.7907 1.1930 1.1930 1.0954 13 14 13 12 1203 ... Osteoarthritis M <49.50 and A >=74.50 ...... 2.0815 1.3867 1.3867 1.2734 15 14 16 14 1204 ... Osteoarthritis M <49.50 and A <74.50 ...... 2.1877 1.4575 1.4575 1.3383 15 15 15 15 1301 ... Rheumatoid other arthritis M >=62.50 ...... 1.1277 0.9311 0.8839 0.7847 9 11 10 9 1302 ... Rheumatoid other arthritis M >=51.50 and M 1.5429 1.2740 1.2094 1.0737 12 13 13 12 <62.50. 1303 ... Rheumatoid other arthritis M >=44.50 and M 1.7786 1.4686 1.3941 1.2377 14 15 14 14 <51.50 and A >=64.50. 1304 ... Rheumatoid other arthritis M <44.50 and A >=64.50 2.0617 1.7024 1.6161 1.4347 14 17 16 16 1305 ... Rheumatoid other arthritis M <51.50 and A <64.50 2.0876 1.7237 1.6363 1.4527 15 16 16 16 1401 ... Cardiac M >=68.50 ...... 1.1456 0.9392 0.8477 0.7585 10 10 10 9 1402 ... Cardiac M >=55.50 and M <68.50 ...... 1.4391 1.1799 1.0650 0.9529 13 13 11 11 1403 ... Cardiac M >=45.50 and M <55.50 ...... 1.7474 1.4326 1.2931 1.1570 15 15 13 13 1404 ... Cardiac M <45.50 ...... 2.0524 1.6827 1.5188 1.3590 18 17 16 14 1501 ... Pulmonary M >=68.50 ...... 1.2905 1.0335 0.9655 0.9262 11 11 10 10 1502 ... Pulmonary M >=56.50 and M <68.50 ...... 1.5913 1.2744 1.1906 1.1421 13 13 12 12 1503 ... Pulmonary M >=45.50 and M <56.50 ...... 1.8476 1.4796 1.3823 1.3261 16 14 13 13 1504 ... Pulmonary M <45.50 ...... 2.1421 1.7154 1.6027 1.5375 22 16 15 14

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48430 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

TABLE 2—RELATIVE WEIGHTS AND AVERAGE LENGTH OF STAY VALUES FOR THE REVISED CASE-MIX GROUPS— Continued

Relative weight Average length of stay CMG CMG description No No (M = motor, A = age) Tier 1 Tier 2 Tier 3 comorbidity Tier 1 Tier 2 Tier 3 comorbidity tier tier

1601 ... Pain syndrome M >=65.50 ...... 0.9889 0.9889 0.8919 0.8028 9 10 11 9 1602 ... Pain syndrome M >=58.50 and M <65.50 ...... 1.1078 1.1078 0.9991 0.8992 10 11 11 11 1603 ... Pain syndrome M >=43.50 and M <58.50 ...... 1.3538 1.3538 1.2209 1.0989 12 14 13 13 1604 ... Pain syndrome M <43.50 ...... 1.7201 1.7201 1.5513 1.3963 13 15 17 15 1701 ... Major multiple trauma without brain or spinal cord 1.3910 1.0912 0.9919 0.9032 12 13 11 11 injury M >=57.50. 1702 ... Major multiple trauma without brain or spinal cord 1.6988 1.3328 1.2115 1.1031 15 14 13 13 injury M >=50.50 and M <57.50. 1703 ... Major multiple trauma without brain or spinal cord 2.0140 1.5799 1.4362 1.3077 18 16 15 15 injury M >=41.50 and M <50.50. 1704 ... Major multiple trauma without brain or spinal cord 2.2279 1.7478 1.5888 1.4466 17 19 17 16 injury M >=36.50 and M <41.50. 1705 ... Major multiple trauma without brain or spinal cord 2.4447 1.9179 1.7434 1.5873 23 20 18 17 injury M <36.50. 1801 ... Major multiple trauma with brain or spinal cord in- 1.2381 0.9821 0.8820 0.8180 14 13 10 10 jury M >=67.50. 1802 ... Major multiple trauma with brain or spinal cord in- 1.5767 1.2506 1.1232 1.0418 13 15 12 12 jury M >=55.50 and M <67.50. 1803 ... Major multiple trauma with brain or spinal cord in- 1.9345 1.5344 1.3781 1.2782 17 17 15 14 jury M >=45.50 and M <55.50. 1804 ... Major multiple trauma with brain or spinal cord in- 2.2183 1.7596 1.5803 1.4657 22 19 17 16 jury M >=40.50 and M <45.50. 1805 ... Major multiple trauma with brain or spinal cord in- 2.6487 2.1010 1.8869 1.7501 28 23 20 19 jury M >=30.50 and M <40.50. 1806 ... Major multiple trauma with brain or spinal cord in- 3.4119 2.7063 2.4305 2.2543 37 29 22 25 jury M <30.50. 1901 ... Guillain-Barre´ M >=66.50 ...... 1.2031 0.9356 0.9226 0.8738 14 12 13 10 1902 ... Guillain-Barre´ M >=51.50 and M <66.50 ...... 1.6292 1.2670 1.2493 1.1832 18 14 14 14 1903 ... Guillain-Barre´ M >=38.50 and M <51.50 ...... 2.5939 2.0172 1.9890 1.8838 25 21 21 21 1904 ... Guillain-Barre´ M <38.50...... 3.8189 2.9699 2.9284 2.7735 44 31 29 29 2001 ... Miscellaneous M >=66.50 ...... 1.2118 0.9833 0.9005 0.8282 11 11 10 9 2002 ... Miscellaneous M >=55.50 and M <66.50 ...... 1.4899 1.2090 1.1072 1.0182 13 13 12 11 2003 ... Miscellaneous M >=46.50 and M <55.50 ...... 1.7634 1.4309 1.3105 1.2052 15 15 14 13 2004 ... Miscellaneous M <46.50 and A >=77.50 ...... 1.9847 1.6104 1.4749 1.3564 18 17 15 15 2005 ... Miscellaneous M <46.50 and A <77.50 ...... 2.1338 1.7315 1.5858 1.4583 19 18 16 15 2101 ... Burns M >=52.50 ...... 1.8033 1.3711 1.1272 1.1272 17 13 13 14 2102 ... Burns M <52.50 ...... 2.4055 1.8289 1.5036 1.5036 20 21 15 15 5001 ... Short-stay cases, length of stay is 3 days or fewer ...... 0.1643 ...... 2 5101 ... Expired, orthopedic, length of stay is 13 days or ...... 0.7262 ...... 8 fewer. 5102 ... Expired, orthopedic, length of stay is 14 days or ...... 1.8015 ...... 19 more. 5103 ... Expired, not orthopedic, length of stay is 15 days or ...... 0.8454 ...... 8 fewer. 5104 ... Expired, not orthopedic, length of stay is 16 days or ...... 2.0896 ...... 20 more.

Generally, updates to the CMG particular CMG relative weight values, previously described), total estimated relative weights result in some increases which would affect the overall aggregate payments to IRFs for FY 2021 and some decreases to the CMG relative distribution of payments within CMGs are not affected as a result of the CMG weight values. Table 3 shows how we and tiers. We note that, because we relative weight revisions. However, the estimate that the application of the implement the CMG relative weight revisions affect the distribution of revisions for FY 2021 would affect revisions in a budget-neutral manner (as payments within CMGs and tiers.

TABLE 3—DISTRIBUTIONAL EFFECTS OF THE CHANGES TO THE CMG RELATIVE WEIGHTS

Number Percentage Percentage change in CMG relative weights of cases of cases affected affected

Increased by 15% or more ...... 64 0.0 Increased by between 5% and 15% ...... 1,830 0.4 Changed by less than 5% ...... 404,940 99.3 Decreased by between 5% and 15% ...... 1,029 0.3 Decreased by 15% or more ...... 11 0.0

As shown in Table 3, 99.3 percent of would experience less than a 5 percent the CMG relative weight value as a all IRF cases are in CMGs and tiers that change (either increase or decrease) in result of the revisions for FY 2021. The

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48431

changes in the average length of stay 2021 IRF PPS proposed rule, the FY rarely make changes to this values for FY 2021, compared with the 2019 data is the most current and methodology, so we believe that FY 2020 average length of stay values, complete data available for updating stakeholders have had ample are small and do not show any payments. opportunity to comment on this particular trends in IRF length of stay We are confident that the data is valid methodology over the years, and we do patterns. and reliable for use in setting IRF PPS not believe that there would be added The comments we received on our payment rates. CMS’s contractor value to convening a TEP to discuss this proposal to update the CMG relative (Research Triangle Institute (RTI)) well-established methodology. weights and average length of stay analyzed 2 year’s worth of these data With regard to the comment regarding values for FY 2021 are summarized (FYs 2017 and 2018) to determine the Table 3, we do not agree with the below. extent to which the data could predict commenter’s suggestion that utilizing Comment: One commenter expressed resource use in the IRF setting. RTI changes in payment would more concern about the decreases in some of produced two reports containing their adequately project changes in the CMG the CMG relative weights and average analyses and findings, ‘‘Analyses to relative weight values than examining length of stay values from the proposed Inform the Potential use of Standardized changes in the relative weight values updates, and questioned whether the FY Patient Assessment Data Elements in the themselves. We would also like to note 2019 data used to update these values Inpatient Rehabilitation Facility that the data files published in for FY 2021 are reliable and valid. This Prospective Payment System (PDF)’’ conjunction with each proposed and commenter suggested that CMS freeze (April 2018) and ‘‘Analyses to Inform final rule contain estimated facility level the CMG relative weights and average the Use of Standardized Patient payment impacts for each IRF in our length of stay values at FY 2020 levels. Assessment Data Elements in the analysis file to support transparency This commenter also requested that Inpatient Rehabilitation Facility and assist providers in determining the CMS provide patient level data to allow Prospective Payment System (PDF)’’ payment implications of the policy stakeholders to analyze and model IRF (March 2019). These reports are both updates contained in each rule. payments and requested that CMS available for download from the IRF However, we appreciate the convene regularly scheduled TEPs to PPS website at https://www.cms.gov/ commenter’s suggested revisions to discuss and review payment model Medicare/Medicare-Fee-for-Service- Table 3 and will take this comment analyses. Additionally, this commenter Payment/InpatientRehabFacPPS/ under advisement for future also suggested that CMS should modify Research. consideration. Table 3 to reflect the payment impacts As most recently discussed in detail After consideration of the comments of updating the CMG relative weights in the FY 2020 IRF PPS final rule (84 we received, we are finalizing our and requested that CMS provide actual FR 39054), we believe that these data proposal to update the CMG relative changes in payment instead of changes accurately reflect the severity of the IRF weights and average length of stay in percentages, as this would provide patient population and the associated values for FY 2021, as shown in Table more transparency related to the actual costs of caring for these patients in the 2 of this final rule. These updates are changes that IRFs may experience. IRF setting. Therefore, we believe it is effective for FY 2021, that is, for Response: The annual updates to the appropriate to use the FY 2019 data to discharges occurring on or after October CMG relative weights, which include update the CMG relative weights and 1, 2020 and on or before September 30, both increases and decreases to the average length of stay values for FY 2021. CMG relative weights, are intended to 2021 to ensure the case mix system is ensure that IRF payments are aligned as as reflective as possible of recent VI. FY 2021 IRF PPS Payment Update closely as possible with the current changes in IRF utilization and case mix. A. Background costs of care. The relative weights for With regard to the request for patient- each of the CMGs and tiers represent the level data, we are unable to make Section 1886(j)(3)(C) of the Act relative costliness of patients in those patient assessment and claims data requires the Secretary to establish an CMGs and tiers compared with patients publicly available on the CMS website increase factor that reflects changes over in other CMGs and tiers. Additionally, because these data contain information time in the prices of an appropriate mix the average length of stay values are that can be used to identify individual of goods and services for which only used to determine which cases Medicare beneficiaries. However, payment is made under the IRF PPS. qualify for the short-stay transfer policy stakeholders may obtain these data According to section 1886(j)(3)(A)(i) of and are not used to determine payments through the standard CMS data the Act, the increase factor shall be used for the non-short-stay transfer cases. acquisition and Data Use Agreement to update the IRF prospective payment We do not agree that it would be (DUA) processes. More information on rates for each FY. Section appropriate to freeze the CMG relative CMS data acquisition process can be 1886(j)(3)(C)(ii)(I) of the Act requires the weights and average length of stay found on the CMS website at https:// application of the productivity values at FY 2020 levels because this www.cms.gov/Research-Statistics-Data- adjustment described in section would require us to base them on older and-Systems/Files-for-Order/ 1886(b)(3)(B)(xi)(II) of the Act. Thus, in data. Updating these values based on FilesForOrderGenInfo/index. the FY 2021 IRF PPS proposed rule (85 the most recent available data ensures In addition, with regard to the request FR 22073 through 22074), we proposed that the IRF case mix system is as for the regularly scheduled TEPs to to update the IRF PPS payments for FY reflective as possible of recent changes obtain stakeholder input on the routine 2021 by a market basket increase factor in IRF utilization and case mix, thereby annual updates to the CMG relative as required by section 1886(j)(3)(C) of ensuring that IRF payments weights and average length of stay the Act based upon the most current appropriately reflect the relative costs of values, we provide the methodology for data available, with a productivity caring for IRF patients. Freezing these these updates in the IRF PPS proposed adjustment as required by section values at FY 2020 levels does not allow rules each year to enable stakeholders to 1886(j)(3)(C)(ii)(I) of the Act. us to reflect any changes in IRF comment on the methodology and We have utilized various market utilization and case mix that might have provide any suggestions for updating baskets through the years in the IRF occurred over time. As stated in the FY this methodology. Furthermore, we PPS. For a discussion of these market

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48432 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

baskets, we refer readers to the FY 2016 Section 1886(b)(3)(B)(xi)(II) of the Act primarily driven by slower anticipated IRF PPS final rule (80 FR 47046). sets forth the definition of this compensation growth for both health- In FY 2016, we finalized the use of a productivity adjustment. The statute related and other occupations as labor 2012-based IRF market basket, using defines the productivity adjustment to markets are expected to be significantly Medicare cost report (MCR) data for be equal to the 10-year moving average impacted during the recession that both freestanding and hospital-based of changes in annual economy-wide, started in February 2020 and throughout IRFs (80 FR 47049 through 47068). private nonfarm business MFP (as the anticipated recovery. Beginning with FY 2020, we finalized a projected by the Secretary for the 10- Based on the more recent data rebased and revised IRF market basket year period ending with the applicable available for this FY 2021 IRF final rule, to reflect a 2016 base year. The FY 2020 FY, year, cost reporting period, or other the current estimate of the 10-year IRF PPS final rule (84 FR 39071 through annual period) (the ‘‘MFP adjustment’’). moving average growth of MFP for FY 39086) contains a complete discussion The U.S. Department of Labor’s Bureau 2021 is –0.1 percentage point. This MFP of the development of the 2016-based of Labor Statistics (BLS) publishes the is based on the most recent IRF market basket. official measure of private nonfarm macroeconomic outlook from IGI at the time of rulemaking (released June 2020) B. FY 2021 Market Basket Update and business MFP. Please see http:// in order to reflect more current Productivity Adjustment www.bls.gov/mfp for the BLS historical published MFP data. A complete historical economic data. IGI produces For FY 2021 (that is, beginning description of the MFP projection monthly macroeconomic forecasts, October 1, 2020 and ending September methodology is available on the CMS which include projections of all of the 30, 2021), we proposed to update the website at https://www.cms.gov/ economic series used to derive MFP. In IRF PPS payments by a market basket Research-Statistics-Dataand-Systems/ contrast, IGI only produces forecasts of increase factor as required by section Statistics-Trends-andReports/ the more detailed price proxies used in 1886(j)(3)(C) of the Act, with a MedicareProgramRatesStats/ the 2016-based IRF market basket on a productivity adjustment as required by MarketBasketResearch.html. quarterly basis. Therefore, IGI’s second section 1886(j)(3)(C)(ii)(I) of the Act. For Using IGI’s fourth quarter 2019 quarter 2020 forecast is the most recent FY 2021, we proposed to use the same forecast, the 10-year moving average forecast of the 2016-based IRF market methodology described in the FY 2020 growth of MFP for FY 2021 was basket update. IRF PPS final rule (84 FR 39085) to projected to be 0.4 percentage point. We note that it has typically been our compute the FY 2021 market basket Thus, in accordance with section practice to base the projection of the increase factor to update the IRF PPS 1886(j)(3)(C) of the Act, we proposed to market basket price proxies and MFP in base payment rate. base the FY 2021 market basket update, the final rule on the second quarter IGI Consistent with historical practice, we which is used to determine the forecast. For this FY 2021 IRF PPS final proposed to estimate the market basket applicable percentage increase for the rule, we are using the IGI June update for the IRF PPS based on IHS IRF payments, on IGI’s fourth quarter macroeconomic forecast for MFP Global Inc.’s (IGI’s) forecast using the 2019 forecast of the 2016-based IRF because it is a more recent forecast, and most recent available data. IGI is a market basket. We proposed to then it is important to use more recent data nationally-recognized economic and reduce this percentage increase by the during this period when economic financial forecasting firm with which estimated MFP adjustment for FY 2021 trends, particularly employment and we contract to forecast the components of 0.4 percentage point (the 10-year labor productivity, are notably uncertain of the market baskets and multifactor moving average growth of MFP for the because of the COVID–19 pandemic. productivity (MFP). Based on IGI’s period ending FY 2021 based on IGI’s Historically, the MFP adjustment based fourth quarter 2019 forecast with fourth quarter 2019 forecast). Therefore, on the second quarter IGI forecast has historical data through the third quarter the proposed FY 2021 IRF update was been very similar to the MFP adjustment of 2019, the 2016-based IRF market equal to 2.5 percent (2.9 percent market derived with IGI’s June macroeconomic basket increase factor for FY 2021 was basket update less 0.4 percentage point forecast. Substantial changes in the projected to be 2.9 percent. Therefore, MFP adjustment). Furthermore, we macroeconomic indicators in between we proposed that the 2016-based IRF proposed that if more recent data monthly forecasts are atypical. market basket increase factor for FY became available after the publication of Given the unprecedented economic 2021 would be 2.9 percent. We the proposed rule and before the uncertainty as a result of the COVID–19 proposed that if more recent data publication of this final rule (for pandemic, the change in the IGI became available after the publication of example, a more recent estimate of the macroeconomic series used to derive the proposed rule and before the market basket and/or MFP), we would MFP between the IGI second quarter publication of this final rule (for use such data to determine the FY 2021 2020 IGI forecast and the IGI June 2020 example, a more recent estimate of the market basket update and MFP macroeconomic forecast is significant. market basket update), we would use adjustment in this final rule. Therefore, we believe it is technically such data to determine the FY 2021 Based on the more recent data appropriate to use IGI’s more recent market basket update in this final rule. available for this FY 2021 IRF final rule June 2020 macroeconomic forecast to According to section 1886(j)(3)(C)(i) of (that is, IGI’s second quarter 2020 determine the MFP adjustment for the the Act, the Secretary shall establish an forecast of the 2016-based IRF market final rule as it reflects more current increase factor based on an appropriate basket rate-of-increase with historical historical data. For comparison percentage increase in a market basket data through the first quarter of 2020), purposes, the 10-year moving average of goods and services. Section we estimate that the FY 2021 market growth of MFP for FY 2021 is projected 1886(j)(3)(C)(ii) of the Act then requires basket update is 2.4 percent. We note to be –0.1 percentage point based on that, after establishing the increase that the fourth quarter 2019 forecast was IGI’s June 2020 macroeconomic forecast factor for a FY, the Secretary shall developed prior to the economic compared to a FY 2021 projected 10- reduce such increase factor for FY 2012 impacts of the Coronavirus disease 2019 year moving average growth of MFP of and each subsequent FY, by the (COVID–19) pandemic. This lower 0.7 percentage point based on IGI’s productivity adjustment described in update (2.4 percent) for FY 2021 relative second quarter 2020 forecast. section 1886(b)(3)(B)(xi)(II) of the Act. to the proposed rule (2.9 percent) is Mechanically subtracting the negative

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48433

10-year moving average growth of MFP the proposed rule, the final update would allow this analysis. We have from the IRF market basket increase would be based on a more recent estimated hospital-sector multi-factor factor using the data from the IGI June forecast of the market basket and MFP productivity and have published the 2020 macroeconomic forecast would adjustment if available. Therefore, findings on the CMS website at https:// have resulted in a 0.1 percentage point incorporating an updated estimate of the www.cms.gov/Research-Statistics-Data- increase in the FY 2021 IRF increase market basket update and productivity and-Systems/Statistics-Trends-and- factor. However, under sections adjustment in the final rule is consistent Reports/ReportsTrustFunds/Downloads/ 1886(b)(3)(B)(xi)(II) and 1886(j)(3)(C) of with what we have done historically for ProductivityMemo2016.pdf. the Act, the Secretary is required to the IRF PPS as well as other Medicare Comment: One commenter stated that reduce (not increase) the IRF market PPSs as it reflects more current while they appreciate this modest basket increase factor by changes in historical data as well as a revised increase to the payment rate, it is economy-wide productivity. outlook on the forecasted price insufficient to offset the impact of cost Accordingly, we will be applying a 0.0 pressures faced by providers for FY inflation, sequestration, and the percentage point MFP adjustment to the 2021 and inclusive of economic financial impact IRFs are facing due to IRF market basket increase factor. assumptions regarding the expected COVID–19. The commenter encouraged Therefore, the current estimate of the FY impacts from the COVID–19 pandemic. CMS to consider these additional 2021 IRF increase factor is equal to 2.4 Comment: Several commenters impacts in the final rule. percent. expressed concern about the continued Response: Since the publication of the For FY 2021, the Medicare Payment application of the productivity FY 2021 IRF PPS proposed rule, we Advisory Commission (MedPAC) adjustment to IRFs. One commenter have incorporated more current recommends that we reduce IRF PPS stated that while they understand that historical data and revised forecasts payment rates by 5 percent. As CMS is bound by statute to reduce the provided by IGI that factor in expected discussed, and in accordance with market basket update by a productivity impacts on price and wage pressures sections 1886(j)(3)(C) and 1886(j)(3)(D) adjustment factor in accordance with from the COVID–19 pandemic. By of the Act, the Secretary is required to the PPACA, they continue to be incorporating the most recent estimates update the IRF PPS payment rates for concerned that IRFs will not have the available of the market basket update FY 2021 by an adjusted market basket ability to generate additional and productivity adjustment, we believe increase factor which, based on the most productivity gains at a pace matching these data reflect the best available recently available data, is 2.4 percent. the productivity of the economy at large projection of input price inflation faced Section 1886(j)(3)(C) of the Act does not on an ongoing, consistent basis as by IRFs for FY 2021, adjusted for provide the Secretary with the authority contemplated by the PPACA. In economy-wide productivity, which is to apply a different update factor to IRF addition, the commenter stated that the required by statute. PPS payment rates for FY 2021. recent developments related to the After consideration of the comments The comments we received on the public health emergency due to COVID– we received, we are finalizing a FY 2021 proposed market basket update and 19 have resulted in further productivity IRF update equal to 2.4 percent based productivity adjustment are challenges for IRFs. The commenter on the most recent data available. summarized below. respectfully requested that CMS C. Labor-Related Share for FY 2021 Comment: One commenter (MedPAC) carefully monitor the impact that these stated that Medicare’s current payment productivity adjustments will have on Section 1886(j)(6) of the Act specifies rates for IRFs appear to be more than the rehabilitation hospital sector, that the Secretary is to adjust the adequate and therefore recommended provide feedback to Congress as proportion (as estimated by the that the Congress reduce the IRF appropriate, and reduce the Secretary from time to time) of IRFs’ payment rate by 5 percent for FY 2021. productivity adjustment. A few costs which are attributable to wages The commenter appreciated that CMS commenters recommended that CMS and wage-related costs, of the cited MedPAC’s recommendation, even continue to research productivity factors prospective payment rates computed while noting that the Secretary does not for health care providers and hospitals, under section 1886(j)(3) of the Act for have the authority to deviate from and partner with Congress to implement area differences in wage levels by a statutorily mandated updates. a more appropriate, health care specific factor (established by the Secretary) Response: We appreciate MedPAC’s productivity adjustment. reflecting the relative hospital wage interest in the IRF increase factor. Response: We acknowledge the level in the geographic area of the However, we are required to update IRF commenters’ concerns regarding rehabilitation facility compared to the PPS payments by the market basket productivity growth at the economy- national average wage level for such update adjusted for productivity, as wide level and its application to IRFs. facilities. The labor-related share is directed by section 1886(j)(3)(C) of the As the commenter acknowledges, determined by identifying the national Act. section 1886(j)(3)(C)(ii)(I) of the Act average proportion of total costs that are Comment: A few commenters requires the application of a related to, influenced by, or vary with supported the proposal to update the productivity adjustment to the IRF PPS the local labor market. We proposed to market basket and productivity amounts market basket increase factor. We will continue to classify a cost category as using the latest available data, and continue to monitor the impact of the labor-related if the costs are labor- encouraged CMS to update these factors payment updates on IRF Medicare intensive and vary with the local labor using the latest available data as part of payment adequacy as well as market. the release of the IRF PPS Final Rule. beneficiary access to care. Based on our definition of the labor- One commenter stated that they were As stated in the FY 2020 IRF PPS final related share and the cost categories in pleased to see an increase in payments rule (84 FR 39087), we would be very the 2016-based IRF market basket, we to IRFs and further increases to rural interested in better understanding IRF- proposed to calculate the labor-related providers. specific productivity; however, the data share for FY 2021 as the sum of the FY Response: We appreciate the elements required to estimate IRF 2021 relative importance of Wages and commenters’ support for the proposed specific multi-factor productivity are Salaries, Employee Benefits, IRF annual payment update. As noted in not produced at the level of detail that Professional Fees: Labor-related,

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48434 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

Administrative and Facilities Support local labor market is 46 percent. Since Labor-related, Administrative and Services, Installation, Maintenance, and the relative importance for Capital- Facilities Support Services, Installation Repair Services, All Other: Labor-related Related costs was 8.5 percent of the Maintenance & Repair Services, and All Services, and a portion of the Capital- 2016-based IRF market basket for FY Other: Labor-related Services is 69.1 Related relative importance from the 2021, we proposed to take 46 percent of percent. We proposed that the portion of 2016-based IRF market basket. For more 8.5 percent to determine the labor- Capital-Related costs that are influenced details regarding the methodology for related share of Capital-Related costs for by the local labor market is 46 percent. determining specific cost categories for FY 2021 of 3.9 percent. Therefore, we Since the relative importance for inclusion in the 2016-based IRF labor- proposed a total labor-related share for Capital-Related costs is 8.5 percent of related share, see the FY 2020 IRF PPS FY 2021 of 72.9 percent (the sum of 69.0 the 2016-based IRF market basket for FY final rule (84 FR 39087 through 39089). percent for the labor-related share of 2021, we take 46 percent of 8.5 percent The relative importance reflects the operating costs and 3.9 percent for the different rates of price change for these labor-related share of Capital-Related to determine the labor-related share of cost categories between the base year costs). We proposed that if more recent Capital-Related costs for FY 2021 of 3.9 (2016) and FY 2021. Based on IGI’s data became available after publication percent. Therefore, the current estimate fourth quarter 2019 forecast of the 2016- of the proposed rule and before the of the total labor-related share for FY based IRF market basket, the sum of the publication of this final rule (for 2021 is equal to 73.0 percent (the sum FY 2021 relative importance for Wages example, a more recent estimate of the of 69.1 percent for the labor-related and Salaries, Employee Benefits, labor-related share), we would use such share of operating costs and 3.9 percent Professional Fees: Labor-related, data to determine the FY 2021 IRF for the labor-related share of Capital- Administrative and Facilities Support labor-related share in this final rule. Related costs). Table 4 shows the Services, Installation Maintenance & Based on IGI’s second quarter 2020 current estimate of the FY 2021 labor- Repair Services, and All Other: Labor- forecast of the 2016-based IRF market related share and the FY 2020 final related Services was 69.0 percent. We basket, the sum of the FY 2021 relative labor-related share using the 2016-based proposed that the portion of Capital- importance for Wages and Salaries, IRF market basket relative importance. Related costs that are influenced by the Employee Benefits, Professional Fees:

TABLE 4—FY 2021 IRF LABOR-RELATED SHARE AND FY 2020 IRF LABOR-RELATED SHARE

FY 2021 FY 2020 labor-related final labor share 1 related share 2

Wages and Salaries ...... 48.6 48.1 Employee Benefits ...... 11.4 11.4 Professional Fees: Labor-Related 3 ...... 5.0 5.0 Administrative and Facilities Support Services ...... 0.7 0.8 Installation, Maintenance, and Repair Services ...... 1.6 1.6 All Other: Labor-Related Services ...... 1.8 1.8 Subtotal ...... 69.1 68.7 Labor-related portion of Capital-Related (46%) ...... 3.9 4.0

Total Labor-Related Share ...... 73.0 72.7 1 Based on the 2016-based IRF market basket relative importance, IGI 2nd quarter 2020 forecast. 2 Based on the 2016-based IRF market basket relative importance as published in the Federal Register (84 FR 39089). 3 Includes all contract advertising and marketing costs and a portion of accounting, architectural, engineering, legal, management consulting, and home office contract labor costs.

The comment we received on the believe it is technically appropriate to forecast) of the 2016-based IRF market proposed labor related share for FY use the 2016-based IRF market basket basket labor-related share cost weights 2021 is summarized below. relative importance to determine the as proposed. Comment: One commenter opposed labor-related share for FY 2021 as it is the proposed increase in the labor based on more recent data regarding D. Wage Adjustment for FY 2021 related share because it penalizes any price pressures and cost structure of 1. Background facility that has a wage index less than IRFs. Our policy to use the most recent 1.0. The commenter stated that across market basket to determine the labor- Section 1886(j)(6) of the Act requires the country, there is a growing disparity related share is a policy we have the Secretary to adjust the proportion of between high-wage and low-wage states regularly adopted for the IRF PPS, (such rehabilitation facilities’ costs and stated that this proposal will as for the FY 2020 IRF PPS final rule (84 attributable to wages and wage-related continue to exacerbate that disparity FR 39089)), as well as for other PPSs costs (as estimated by the Secretary from and further harm hospitals in many including but not limited to the time to time) by a factor (established by rural and underserved communities. Inpatient Psychiatric Facility PPS (84 the Secretary) reflecting the relative Unless there is sufficient data to support FR 38446) and the Long-term care hospital wage level in the geographic the labor related share increase, the hospital PPS (84 FR 42642). area of the rehabilitation facility commenter requested that the After consideration of the comment compared to the national average wage percentage from 2020 should carry we received, we are finalizing the use of level for those facilities. The Secretary forward into 2021. the sum of the FY 2021 relative is required to update the IRF PPS wage Response: We appreciate the importance for the labor-related cost index on the basis of information commenter’s concern over the increase categories based on the most recent available to the Secretary on the wages in the labor-related share; however, we forecast (IGI’s second quarter 2020 and wage-related costs to furnish

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48435

rehabilitation services. Any adjustment discrepancies in wage index policies geographically located. IRF labor market or updates made under section between the IRF PPS and IPPS settings areas are delineated based on the CBSAs 1886(j)(6) of the Act for a FY are made may impact access to care and established by the OMB. The current in a budget-neutral manner. competition for labor and requested that CBSA delineations (which were For FY 2021, we proposed to maintain CMS ensure parity between wage index implemented for the IRF PPS beginning the policies and methodologies policies for all hospitals. with FY 2016) are based on revised described in the FY 2020 IRF PPS final Response: We appreciate the OMB delineations issued on February rule (84 FR 39090) related to the labor commenters’ support for the continued 28, 2013, in OMB Bulletin No. 13–01. market area definitions and the wage use of the concurrent year’s IPPS wage OMB Bulletin No. 13–01 established index methodology for areas with wage data. However, we note that the IRF PPS revised delineations for Metropolitan data. Thus, we proposed to use the does not account for geographic Statistical Areas, Micropolitan CBSA labor market area definitions and reclassification under sections Statistical Areas, and Combined the FY 2021 pre-reclassification and 1886(d)(8) and (d)(10) of the Act, and Statistical Areas in the United States pre-floor hospital wage index data. In does not apply the ‘‘rural floor’’ under and Puerto Rico based on the 2010 accordance with section 1886(d)(3)(E) of section 4410 of the Balanced Budget Act Census, and provided guidance on the the Act, the FY 2021 pre-reclassification of 1997 (BBA) (Pub. L. 105–33, enacted use of the delineations of these and pre-floor hospital wage index is on August 5, 1997). Furthermore, as we statistical areas using standards based on data submitted for hospital do not have an IRF-specific wage index, published in the June 28, 2010 Federal cost reporting periods beginning on or we are unable to determine the degree, Register (75 FR 37246 through 37252). after October 1, 2016, and before if any, to which a geographic We refer readers to the FY 2016 IRF PPS October 1, 2017 (that is, FY 2017 cost reclassification adjustment or a rural final rule (80 FR 47068 through 47076) report data). floor policy under the IRF PPS would be for a full discussion of our The labor market designations made appropriate. The rationale for our implementation of the OMB labor by the OMB include some geographic current wage index policies is fully market area delineations beginning with areas where there are no hospitals and, described in the FY 2006 IRF PPS final the FY 2016 wage index. thus, no hospital wage index data on rule (70 FR 47880, 47926 through Generally, OMB issues major which to base the calculation of the IRF 47928). revisions to statistical areas every 10 PPS wage index. We proposed to With regard to the comments years, based on the results of the continue to use the same methodology requesting that we adopt similar decennial census. However, OMB discussed in the FY 2008 IRF PPS final adjustments to address wage disparities occasionally issues updates and rule (72 FR 44299) to address those between high and low wage index IPPS revisions to the statistical areas to reflect geographic areas where there are no hospitals under the IRF PPS, we would the recognition of new areas or the hospitals and, thus, no hospital wage like to note that the IRF wage index is addition of counties to existing areas. In index data on which to base the derived from IPPS wage data. As such, some instances, these updates merge calculation for the FY 2021 IRF PPS any effects of this policy on the wage formerly separate areas, transfer wage index. data of IPPS hospitals will be extended components of an area from one area to The comments we received on these to the IRF setting, as this data will be another, or drop components from an proposals are summarized below. used to establish the wage index for area. On July 15, 2015, OMB issued Comment: One commenter OMB Bulletin No. 15–01, which recommended that CMS repeal the IRFs in the future. We appreciate the commenters’ provides minor updates to and existing hospital wage index and supersedes OMB Bulletin No. 13–01 recommended a number of changes to concerns regarding beneficiary access to care and competition for labor resulting that was issued on February 28, 2013. existing wage index policies, but The attachment to OMB Bulletin No. acknowledged that legislative action from different applicable wage index policies across different settings of care. 15–01 provides detailed information on may be necessary to accomplish some or the update to statistical areas since all of the recommended changes. While CMS and other stakeholders have explored potential alternatives to the February 28, 2013. The updates Response: We appreciate the provided in OMB Bulletin No. 15–01 are current wage index system in the past, commenter’s recommendations on based on the application of the 2010 no consensus has been achieved implementing wage index reform and Standards for Delineating Metropolitan regarding how best to implement a the recommended modifications to the and Micropolitan Statistical Areas to replacement system. These concerns IRF PPS wage index polices. We believe Census Bureau population estimates for will be taken into consideration while that such recommendations should be July 1, 2012 and July 1, 2013. part of a broader discussion on wage we continue to explore potential wage In the FY 2018 IRF PPS final rule (82 index reform across Medicare payment index reforms and monitor IRF wage FR 36250 through 36251), we adopted systems. These recommendations will index policies. After consideration of the updates set forth in OMB Bulletin be taken into consideration while we the comments we received, we are No. 15–01 effective October 1, 2017, continue to explore potential wage finalizing our proposed policies as beginning with the FY 2018 IRF wage index alternatives in the future. discussed above relating to the wage index. For a complete discussion of the Comment: Some commenters who index. adoption of the updates set forth in were supportive of using the concurrent 2. Core-Based Statistical Areas (CBSAs) OMB Bulletin No. 15–01, we refer year’s IPPS wage data requested that for the FY 2021 IRF Wage Index readers to the FY 2018 IRF PPS final CMS adopt IPPS wage index polices rule. In the FY 2019 IRF PPS final rule under the IRF PPS, including a. Background (83 FR 38527), we continued to use the geographic reclassification, the The wage index used for the IRF PPS OMB delineations that were adopted imposition of a rural floor, and is calculated using the pre- beginning with FY 2016 to calculate the adjustments that address wage reclassification and pre-floor inpatient area wage indexes, with updates set disparities between high and low wage PPS (IPPS) wage index data and is forth in OMB Bulletin No. 15–01 that index hospitals. Additionally, some assigned to the IRF on the basis of the we adopted beginning with the FY 2018 commenters suggested that labor market area in which the IRF is wage index.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48436 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

On August 15, 2017, OMB issued OMB delineations, there would be new geographic areas, we also proposed to OMB Bulletin No. 17–01, which CBSAs, urban counties that would apply a 5 percent cap on any decrease provided updates to and superseded become rural, rural counties that would in an IRF’s wage index from the IRF’s OMB Bulletin No. 15–01 that was issued become urban, and existing CBSAs that wage index from the prior FY. This on July 15, 2015. The attachments to would be split apart. We discuss these transition is discussed in more detail in OMB Bulletin No. 17–01 provide changes in more detail in section section VI.D.3. of this final rule. detailed information on the update to VI.D.2.b. of this final rule. We proposed (1) Micropolitan Statistical Areas statistical areas since July 15, 2015, and to adopt the updates to the OMB are based on the application of the 2010 delineations announced in OMB OMB defines a ‘‘Micropolitan Standards for Delineating Metropolitan Bulletin No. 18–04 effective beginning Statistical Area’’ as a CBSA associated and Micropolitan Statistical Areas to with FY 2021 under the IRF PPS. As with at least one urban cluster that has Census Bureau population estimates for noted previously, the March 6, 2020 a population of at least 10,000, but less July 1, 2014 and July 1, 2015. In the FY OMB Bulletin 20–01 was not issued in than 50,000 (75 FR 37252). We refer to 2020 IRF PPS final rule (84 FR 39090 time for development of this rule. While these areas as Micropolitan Areas. Since through 39091), we adopted the updates we do not believe that the minor FY 2006, we have treated Micropolitan set forth in OMB Bulletin No. 17–01 updates included in OMB Bulletin 20– Areas as rural and include hospitals effective October 1, 2019, beginning 01 will impact the updates to the CBSA- located in Micropolitan Areas in each with the FY 2020 IRF wage index. based labor market area delineations, if State’s rural wage index. We refer the On April 10, 2018, OMB issued OMB appropriate, we will propose any reader to the FY 2006 IRF PPS final rule Bulletin No. 18–03, which superseded updates from this bulletin in the FY for a complete discussion regarding the August 15, 2017 OMB Bulletin No. 2022 IRF PPS proposed rule. treating Micropolitan Areas as rural. 17–01, and on September 14, 2018, b. Implementation of New Labor Market Therefore, in conjunction with our OMB issued OMB Bulletin No. 18–04, Area Delineations proposal to implement the new OMB which superseded the April 10, 2018 We believe it is important for the IRF labor market delineations beginning in OMB Bulletin No. 18–03. These PPS to use the latest labor market area FY 2021 and consistent with the bulletins established revised delineations available as soon as is treatment of Micropolitan Areas under delineations for Metropolitan Statistical reasonably possible to maintain a more the IPPS, we proposed to continue to Areas, Micropolitan Statistical Areas, accurate and up-to-date payment system treat Micropolitan Areas as ‘‘rural’’ and and Combined Statistical Areas, and that reflects the reality of population to include Micropolitan Areas in the provided guidance on the use of the shifts and labor market conditions. We calculation of the state’s rural wage delineations of these statistical areas. A further believe that using the most index. copy of this bulletin may be obtained at current delineations possible will (2) Urban Counties That Would Become https://www.whitehouse.gov/wp- increase the integrity of the IRF PPS Rural Under the New OMB Delineations content/uploads/2018/09/Bulletin-18- wage index system by creating a more 04.pdf. We note that on March 6, 2020 accurate representation of geographic As previously discussed, we proposed OMB issued OMB Bulletin 20–01 variations in wage levels. Therefore, we to implement the new OMB labor (available on the web at https:// proposed to adopt the new OMB market area delineations (based upon www.whitehouse.gov/wp-content/ delineations as described in the the 2010 Decennial Census data) uploads/2020/03/Bulletin-20-01.pdf), September 14, 2018 OMB Bulletin No. beginning in FY 2021. Our analysis but it was not issued in time for 18–04, effective beginning with the FY shows that a total of 34 counties (and development of this rule. 2021 IRF PPS wage index. We proposed county equivalents) that are currently While OMB Bulletin No. 18–04 is not to use these new delineations to considered part of an urban CBSA based on new census data, there were calculate area wage indexes in a manner would be considered located in a rural some material changes based on the that is generally consistent with the area, beginning in FY 2021, under these revised OMB delineations. The CBSA-based methodologies. As the new OMB delineations. Table 5 lists the revisions OMB published on September adoption of the new OMB delineations 34 urban counties that will be rural with 14, 2018 contain a number of significant may have significant negative impacts the implementation of the new OMB changes. For example, under the new on the wage index values for certain delineations.

TABLE 5—COUNTIES THAT WILL TRANSITION FROM URBAN TO RURAL STATUS

FIPS county code County/county equivalent State Current CBSA Current CBSA name

01127 ...... Walker ...... AL 13820 Birmingham-Hoover, AL. 12045 ...... Gulf ...... FL 37460 Panama City, FL. 13007 ...... Baker ...... GA 10500 Albany, GA. 13235 ...... Pulaski ...... GA 47580 Warner Robins, GA. 15005 ...... Kalawao ...... HI 27980 Kahului-Wailuku-Lahaina, HI. 17039 ...... De Witt ...... IL 14010 Bloomington, IL. 17053 ...... Ford ...... IL 16580 Champaign-Urbana, IL. 18143 ...... Scott ...... IN 31140 Louisville/Jefferson County, KY–IN. 18179 ...... Wells ...... IN 23060 Fort Wayne, IN. 19149 ...... Plymouth ...... IA 43580 Sioux City, IA–NE–SD. 20095 ...... Kingman ...... KS 48620 Wichita, KS. 21223 ...... Trimble ...... KY 31140 Louisville/Jefferson County, KY–IN. 22119 ...... Webster ...... LA 43340 Shreveport-Bossier City, LA. 26015 ...... Barry ...... MI 24340 Grand Rapids-Wyoming, MI. 26159 ...... Van Buren ...... MI 28020 Kalamazoo-Portage, MI. 27143 ...... Sibley ...... MN 33460 Minneapolis-St. Paul-Bloomington, MN–WI.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48437

TABLE 5—COUNTIES THAT WILL TRANSITION FROM URBAN TO RURAL STATUS—Continued

FIPS county code County/county equivalent State Current CBSA Current CBSA name

28009 ...... Benton ...... MS 32820 Memphis, TN–MS–AR. 29119 ...... Mc Donald ...... MO 22220 Fayetteville-Springdale-Rogers, AR–MO. 30037 ...... Golden Valley ...... MT 13740 Billings, MT. 31081 ...... Hamilton ...... NE 24260 Grand Island, NE. 38085 ...... Sioux ...... ND 13900 Bismarck, ND. 40079 ...... Le Flore ...... OK 22900 Fort Smith, AR–OK. 45087 ...... Union ...... SC 43900 Spartanburg, SC. 46033 ...... Custer ...... SD 39660 Rapid City, SD. 47081 ...... Hickman ...... TN 34980 Nashville-Davidson-Murfreesboro-Franklin, TN. 48007 ...... Aransas ...... TX 18580 Corpus Christi, TX. 48221 ...... Hood ...... TX 23104 Fort Worth-Arlington, TX. 48351 ...... Newton ...... TX 13140 Beaumont-Port Arthur, TX. 48425 ...... Somervell ...... TX 23104 Fort Worth-Arlington, TX. 51029 ...... Buckingham ...... VA 16820 Charlottesville, VA. 51033 ...... Caroline ...... VA 40060 Richmond, VA. 51063 ...... Floyd ...... VA 13980 Blacksburg-Christiansburg-Radford, VA. 53013 ...... Columbia ...... WA 47460 Walla Walla, WA. 53051 ...... Pend Oreille ...... WA 44060 Spokane-Spokane Valley, WA.

We proposed that the wage data for all (3) Rural Counties That Will Become shows that a total of 47 counties (and hospitals located in the counties listed Urban Under the New OMB county equivalents) that are currently above would now be considered rural, Delineations considered located in rural areas will beginning in FY 2021, when calculating now be considered located in urban their respective State’s rural wage index. As previously discussed, we are areas under the new OMB delineations. This rural wage index value would also implementing the new OMB labor Table 6 lists the 47 rural counties that be used under the IRF PPS. We refer market area delineations (based upon will be urban with the implementation readers to section VI.D.3. of this final the 2010 Decennial Census data) of the new OMB delineations. rule for a discussion of the wage index beginning in FY 2021. Analysis of these transition policy due to these changes. OMB labor market area delineations

TABLE 6—COUNTIES THAT WILL TRANSITION FROM RURAL TO URBAN STATUS

FIPS county Proposed code County/county equivalent State CBSA code Proposed CBSA name

01063 ...... Greene ...... AL 46220 Tuscaloosa, AL. 01129 ...... Washington ...... AL 33660 Mobile, AL. 05047 ...... Franklin ...... AR 22900 Fort Smith, AR–OK. 12075 ...... Levy ...... FL 23540 Gainesville, FL. 13259 ...... Stewart ...... GA 17980 Columbus, GA–AL. 13263 ...... Talbot ...... GA 17980 Columbus, GA–AL. 16077 ...... Power ...... ID 38540 Pocatello, ID. 17057 ...... Fulton ...... IL 37900 Peoria, IL. 17087 ...... Johnson ...... IL 16060 Carbondale-Marion, IL. 18047 ...... Franklin ...... IN 17140 Cincinnati, OH–KY–IN. 18121 ...... Parke ...... IN 45460 Terre Haute, IN. 18171 ...... Warren ...... IN 29200 Lafayette-West Lafayette, IN. 19015 ...... Boone ...... IA 11180 Ames, IA. 19099 ...... Jasper ...... IA 19780 Des Moines-West Des Moines, IA. 20061 ...... Geary ...... KS 31740 Manhattan, KS. 21043 ...... Carter ...... KY 26580 Huntington-Ashland, WV–KY–OH. 22007 ...... Assumption ...... LA 12940 Baton Rouge, LA. 22067 ...... Morehouse ...... LA 33740 Monroe, LA. 25011 ...... Franklin ...... MA 44140 Springfield, MA. 26067 ...... Ionia ...... MI 24340 Grand Rapids-Kentwood, MI. 26155 ...... Shiawassee ...... MI 29620 Lansing-East Lansing, MI. 27075 ...... Lake ...... MN 20260 Duluth, MN–WI. 28031 ...... Covington ...... MS 25620 Hattiesburg, MS. 28051 ...... Holmes ...... MS 27140 Jackson, MS. 28131 ...... Stone ...... MS 25060 Gulfport-Biloxi, MS. 29053 ...... Cooper ...... MO 17860 Columbia, MO. 29089 ...... Howard ...... MO 17860 Columbia, MO. 30095 ...... Stillwater ...... MT 13740 Billings, MT. 37007 ...... Anson ...... NC 16740 Charlotte-Concord-Gastonia, NC–SC. 37029 ...... Camden ...... NC 47260 Virginia Beach-Norfolk-Newport News, VA–NC. 37077 ...... Granville ...... NC 20500 Durham-Chapel Hill, NC. 37085 ...... Harnett ...... NC 22180 Fayetteville, NC. 39123 ...... Ottawa ...... OH 45780 Toledo, OH.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48438 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

TABLE 6—COUNTIES THAT WILL TRANSITION FROM RURAL TO URBAN STATUS—Continued

FIPS county Proposed code County/county equivalent State CBSA code Proposed CBSA name

45027 ...... Clarendon ...... SC 44940 Sumter, SC. 47053 ...... Gibson ...... TN 27180 Jackson, TN. 47161 ...... Stewart ...... TN 17300 Clarksville, TN–KY. 48203 ...... Harrison ...... TX 30980 Longview, TX. 48431 ...... Sterling ...... TX 41660 San Angelo, TX. 51097 ...... King And Queen ...... VA 40060 Richmond, VA. 51113 ...... Madison ...... VA 47894 Washington-Arlington-Alexandria, DC–VA–MD–WV. 51175 ...... Southampton ...... VA 47260 Virginia Beach-Norfolk-Newport News, VA–NC. 51620 ...... Franklin City ...... VA 47260 Virginia Beach-Norfolk-Newport News, VA–NC. 54035 ...... Jackson ...... WV 16620 Charleston, WV. 54065 ...... Morgan ...... WV 25180 Hagerstown-Martinsburg, MD–WV. 55069 ...... Lincoln ...... WI 48140 Wausau-Weston, WI. 72001 ...... Adjuntas ...... PR 38660 Ponce, PR. 72083 ...... Las Marias ...... PR 32420 Mayagu¨ez, PR.

We proposed that when calculating (4) Urban Counties That Will Move to a three constituent counties will remain the area wage index, beginning with FY Different Urban CBSA Under the New the same. In other cases, only the name 2021, the wage data for hospitals located OMB Delineations of the CBSA will be modified, and none in these counties would be included in of the currently assigned counties will their new respective urban CBSAs. In certain cases, adopting the new be reassigned to a different urban CBSA. Typically, providers located in an urban OMB delineations involves a change Table 7 shows the current CBSA code area receive a higher wage index value only in CBSA name and/or number, and our proposed CBSA code where we than or equal to providers located in while the CBSA continues to encompass proposed to change either the name or their State’s rural area. We refer readers the same constituent counties. For CBSA number only. We are not to section VI.D.3. of this final rule for a example, CBSA 19380 (Dayton, OH) will discussing further in this section these discussion of the wage index transition experience both a change to its number changes because they are and its name, and become CBSA 19430 policy. inconsequential changes with respect to (Dayton-Kettering, OH), while all of its the IRF PPS wage index.

TABLE 7—CURRENT CBSAS THAT WILL CHANGE CBSA CODE OR TITLE

Proposed Current CBSA CBSA code Proposed CBSA title code Current CBSA title

10540 ...... Albany-Lebanon, OR ...... 10540 Albany, OR. 11500 ...... Anniston-Oxford, AL ...... 11500 Anniston-Oxford-Jacksonville, AL. 12060 ...... Atlanta-Sandy Springs-Alpharetta, GA ...... 12060 Atlanta-Sandy Springs-Roswell, GA. 12420 ...... Austin-Round Rock-Georgetown, TX ...... 12420 Austin-Round Rock, TX. 13460 ...... Bend, OR ...... 13460 Bend-Redmond, OR. 13980 ...... Blacksburg-Christiansburg, VA ...... 13980 Blacksburg-Christiansburg-Radford, VA. 14740 ...... Bremerton-Silverdale-Port Orchard, WA ...... 14740 Bremerton-Silverdale, WA. 15380 ...... Buffalo-Cheektowaga, NY ...... 15380 Buffalo-Cheektowaga-Niagara Falls, NY. 19430 ...... Dayton-Kettering, OH ...... 19380 Dayton, OH. 24340 ...... Grand Rapids-Kentwood, MI ...... 24340 Grand Rapids-Wyoming, MI. 24860 ...... Greenville-Anderson, SC ...... 24860 Greenville-Anderson-Mauldin, SC. 25060 ...... Gulfport-Biloxi, MS ...... 25060 Gulfport-Biloxi-Pascagoula, MS. 25540 ...... Hartford-East Hartford-Middletown, CT ...... 25540 Hartford-West Hartford-East Hartford, CT. 25940 ...... Hilton Head Island-Bluffton, SC ...... 25940 Hilton Head Island-Bluffton-Beaufort, SC. 28700 ...... Kingsport-Bristol, TN–VA ...... 28700 Kingsport-Bristol-Bristol, TN–VA. 31860 ...... Mankato, MN ...... 31860 Mankato-North Mankato, MN. 33340 ...... Milwaukee-Waukesha, WI ...... 33340 Milwaukee-Waukesha-West Allis, WI. 34940 ...... Naples-Marco Island, FL ...... 34940 Naples-Immokalee-Marco Island, FL. 35660 ...... Niles, MI ...... 35660 Niles-Benton Harbor, MI. 36084 ...... Oakland-Berkeley-Livermore, CA ...... 36084 Oakland-Hayward-Berkeley, CA. 36500 ...... Olympia-Lacey-Tumwater, WA ...... 36500 Olympia-Tumwater, WA. 38060 ...... Phoenix-Mesa-Chandler, AZ ...... 38060 Phoenix-Mesa-Scottsdale, AZ. 39150 ...... Prescott Valley-Prescott, AZ ...... 39140 Prescott, AZ. 23224 ...... Frederick-Gaithersburg-Rockville, MD ...... 43524 Silver Spring-Frederick-Rockville, MD. 44420 ...... Staunton, VA ...... 44420 Staunton-Waynesboro, VA. 44700 ...... Stockton, CA ...... 44700 Stockton-Lodi, CA. 45940 ...... Trenton-Princeton, NJ ...... 45940 Trenton, NJ. 46700 ...... Vallejo, CA ...... 46700 Vallejo-Fairfield, CA. 47300 ...... Visalia, CA ...... 47300 Visalia-Porterville, CA. 48140 ...... Wausau-Weston, WI ...... 48140 Wausau, WI. 48424 ...... West Palm Beach-Boca Raton-Boynton Beach, FL ... 48424 West Palm Beach-Boca Raton-Delray Beach, FL.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48439

In some cases, counties will shift new CBSAs, or a CBSA loses one or another or to a newly proposed or between existing and new CBSAs, more counties to another urban CBSA, modified CBSA due to the changing the constituent makeup of the to be significant modifications. implementation of the new OMB CBSAs. We consider this type of change, Table 8 lists the urban counties that delineations. where CBSAs are split into multiple will move from one urban CBSA to

TABLE 8—URBAN COUNTIES THAT WILL MOVE TO A NEWLY PROPOSED OR MODIFIED CBSA

FIPS county Proposed code County name State Current CBSA Current CBSA name CBSA code Proposed CBSA name

17031 ...... Cook ...... IL 16974 Chicago-Naperville-Arlington 16984 Chicago-Naperville-Evanston, Heights, IL. IL. 17043 ...... Du Page ...... IL 16974 Chicago-Naperville-Arlington 16984 Chicago-Naperville-Evanston, Heights, IL. IL. 17063 ...... Grundy ...... IL 16974 Chicago-Naperville-Arlington 16984 Chicago-Naperville-Evanston, Heights, IL. IL. 17093 ...... Kendall ...... IL 16974 Chicago-Naperville-Arlington 20994 Elgin, IL. Heights, IL. 17111 ...... Mc Henry ...... IL 16974 Chicago-Naperville-Arlington 16984 Chicago-Naperville-Evanston, Heights, IL. IL. 17197 ...... Will ...... IL 16974 Chicago-Naperville-Arlington 16984 Chicago-Naperville-Evanston, Heights, IL. IL. 34023 ...... Middlesex ...... NJ 35614 New York-Jersey City-White 35154 New Brunswick-Lakewood, Plains, NY–NJ. NJ. 34025 ...... Monmouth ...... NJ 35614 New York-Jersey City-White 35154 New Brunswick-Lakewood, Plains, NY–NJ. NJ. 34029 ...... Ocean ...... NJ 35614 New York-Jersey City-White 35154 New Brunswick-Lakewood, Plains, NY–NJ. NJ. 34035 ...... Somerset ...... NJ 35084 Newark, NJ–PA...... 35154 New Brunswick-Lakewood, NJ. 36027 ...... Dutchess ...... NY 20524 Dutchess County-Putnam 39100 Poughkeepsie-Newburgh-Mid- County, NY. dletown, NY. 36071 ...... Orange ...... NY 35614 New York-Jersey City-White 39100 Poughkeepsie-Newburgh-Mid- Plains, NY–NJ. dletown, NY. 36079 ...... Putnam ...... NY 20524 Dutchess County-Putnam 35614 New York-Jersey City-White County, NY. Plains, NY–NJ. 47057 ...... Grainger ...... TN 28940 Knoxville, TN...... 34100 Morristown, TN. 54043 ...... Lincoln ...... WV 26580 Huntington-Ashland, WV–KY– 16620 Charleston, WV. OH. 72055 ...... Guanica ...... PR 38660 Ponce, PR...... 49500 Yauco, PR. 72059 ...... Guayanilla ...... PR 38660 Ponce, PR...... 49500 Yauco, PR. 72111 ...... Penuelas ...... PR 38660 Ponce, PR...... 49500 Yauco, PR. 72153 ...... Yauco ...... PR 38660 Ponce, PR...... 49500 Yauco, PR.

If providers located in these counties Rules-and-Related-Files.html) reflect the the CBSAs until after the 2020 move from one CBSA to another under proposed revisions to the CBSA-based decennial census data is available. the new OMB delineations, there may labor market area delineations. Response: We appreciate the be impacts, both negative and positive, Furthermore, consistent with the commenters’ concerns regarding the upon their specific wage index values. requirement at § 412.624(e)(1) that impact of implementing the New We refer readers to section VI.D.3. of changes to area wage level adjustment Brunswick-Lakewood, NJ CBSA this final rule for a discussion of the are made in a budget neutral manner, designation on their specific counties. wage index transition policy due to we proposed to adopt these revisions to While we understand the commenters’ these changes. the CSBA based labor market area concern regarding the potential We believe the revisions to the CBSA- delineations in a budget neutral manner. financial impact, we believe that based labor market area delineations as The methodology for calculating the implementing the revised OMB established in OMB Bulletin 18–04 budget neutrality factor is discussed in delineations will create more accurate would ensure that the IRF PPS area section VI.D.4. of this final rule. representations of labor market areas wage level adjustment most and result in IRF wage index values appropriately accounts for and reflects The comments we received on the being more representative of the actual the relative wage levels in the proposal to adopt the new OMB costs of labor in a given area. Moreover, geographic area of the IRF. Therefore, delineations, effective beginning with to the extent that providers exist in a we proposed to adopt the revisions to the FY 2021 IRF PPS wage index are labor market area experiencing a decline the CSBA based labor market area summarized below. in relation to the revised OMB delineations under the IRF PPS, Comment: Commenters were delineations, this would mean that these effective October 1, 2020. Accordingly, generally supportive of the adoption of providers were previously being paid in the proposed FY 2021 IRF PPS wage the new delineations; however, two excess of what their reported wage and index values (which are available on the commenters disagreed with the creation labor data would suggest is appropriate. CMS website at https://www.cms.gov/ of the new ‘‘New Brunswick-Lakewood, We believe that the OMB standards for Medicare/Medicare-Fee-for-Service- NJ’’ CBSA and requested that CMS delineating Metropolitan and Payment/InpatientRehabFacPPS/IRF- delay implementing these revisions to Micropolitan Statistical Areas are

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48440 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

appropriate for determining wage area Lakewood, NJ) under the proposed as we discussed in the proposed rule, differences and that the values changes to the CBSA-based labor market the purpose of the proposed transition computed under the revised area delineations would experience a policy, as well as those we have delineations will result in more nearly 17 percent decrease in the wage implemented in the past, is to help appropriate payments to providers by index as a result of the proposed mitigate the significant negative impacts more accurately accounting for and change. Therefore, consistent with past of certain wage index changes, not to reflecting the differences in area wage practice we proposed a transition policy curtail the positive impacts of such levels. Therefore, we believe that it is to help mitigate any significant negative changes, and thus we do not believe it appropriate to implement the new OMB impacts that IRFs may experience due to would be appropriate to apply the 5 delineations without delay. our proposal to adopt the revised OMB percent cap on wage index increases as After consideration of the comments delineations under the IRF PPS. well. Additionally, we believe that we received, we are finalizing our Specifically, for FY 2021 as a transition, implementing a cap on wage index proposal to adopt the revised OMB we proposed to apply a 5 percent cap values each year would undermine the delineations contained in OMB Bulletin on any decrease in an IRF’s wage index goal of the wage index, which is to 18–04. from the IRF’s wage index from the improve the accuracy of IRF payments, 3. Transition Policy prior FY. This transition would allow and would only serve to further delay the effects of our proposed adoption of improving the accuracy of IRF Overall, we believe that our proposal the revised OMB delineations to be payments. Therefore, while we believe to adopt the revised OMB delineations phased in over 2 years, where the that a transition is necessary to help for FY 2021 would result in wage index estimated reduction in an IRF’s wage mitigate some of the negative impact values being more representative of the index would be capped at 5 percent in from the revised OMB delineations, we actual costs of labor in a given area. FY 2021 (that is, no cap would be also believe this mitigation must be However, we also recognize that applied to any reductions in the wage balanced against the importance of approximately 5 percent of IRFs would index for the second year (FY 2022)). ensuring accurate payments. experience decreases in their area wage We believe a 5 percent cap on the index values as a result of our proposal Additionally, the use of a 50/50 overall decrease in an IRF’s wage index blended wage index transition would to adopt the revised OMB delineations. value would be an appropriate We also realize that many IRFs would affect all IRF providers. We believe it transition as it would effectively would be more appropriate to allow have higher area wage index values mitigate any significant decreases in an under our proposal. IRFs that would experience an increase IRF’s wage index for FY 2021. in their wage index value to receive the To mitigate the potential impacts of Furthermore, consistent with the revisions to the OMB delineations on full benefit of their increased wage requirement at § 412.624(e)(1) that index value, which is intended to reflect IRFs, we have in the past provided for changes to area wage level adjustment accurately the higher labor costs in that transition periods when adopting are made in a budget neutral manner, area. The utilization of a cap on negative changes that have significant payment we proposed that this transitional wage impacts restricts the transition to only implications, particularly large negative index would not result in any change in those with negative impacts and allows impacts. For example, we proposed and estimated aggregate IRF PPS payments providers who would experience finalized budget neutral transition by applying a budget neutrality factor to positive impacts to receive the full policies to help mitigate negative the standard payment conversion factor. amount of their wage index increase. As impacts on IRFs following the adoption Our proposed methodology for such, we believe a 5 percent cap on the of the new CBSA delineations based on calculating this budget neutrality factor overall decrease in an IRF’s wage index the 2010 decennial census data in the is discussed in section VI.D.4. of this FY 2016 IRF PPS final rule (80 FR final rule. value would be an appropriate 47035). Specifically, we implemented a The comments we received on our transition as it would effectively 1-year blended wage index for all IRFs proposed transition methodology to mitigate any significant decreases in an due to our adoption of the revised utilize a 5 percent cap on wage index IRF’s wage index for FY 2021. delineations. This required calculating decreases for FY 2021 are summarized Comment: One commenter requested and comparing two wage indexes for below. that CMS provide the data used to each IRF since that blended wage index Comment: Commenters were calculate the new wage indices. was computed as the sum of 50 percent generally supportive of the proposed 5 Response: The hospital wage data of the FY 2016 IRF PPS wage index percent cap transition policy to mitigate used to derive the IRF PPS wage index values under the FY 2015 CBSA the impact of changes to the wage index are available from the CMS IPPS wage delineations and 50 percent of the FY values. A few commenters suggested the index websites for each respective FY, 2016 IRF PPS wage index values under limit should apply to both increases and which can be accessed from https:// the FY 2016 new OMB delineations. decreases in the wage index. www.cms.gov/Medicare/Medicare-Fee- While we believe that using the new Commenters also suggested a cap for-Service-Payment/ OMB delineations would create a more should be applied every year. One AcuteInpatientPPS/index. After accurate payment adjustment for commenter requested that CMS consideration of the comments we differences in area wage levels, we also incorporate a blended wage index into received, we are finalizing the proposed recognize that adopting such changes the transition, consisting of 50 percent transition methodology, which applies a may cause some short-term instability in of the FY 2020 delineations and 50 5 percent cap on any decrease in an IRF PPS payments, in particular for IRFs percent of the FY 2021 delineations. IRF’s wage index for FY 2021 from the that would be negatively impacted by Response: We appreciate the IRF’s wage index in FY 2020. This the proposed adoption of the updates to comments supporting this transition transitional wage index will not result the OMB delineations. For example, methodology. Further, we appreciate the in any change in estimated aggregate IRF’s currently located in CBSA 35614 commenters’ suggestion that the cap on IRF PPS payments by applying a budget (New York-Jersey City-White Plains, wage index movements of more than 5 neutrality factor to the standard NY–NJ) that would be located in new percent should also be applied to payment conversion factor. The CBSA 35154 (New Brunswick- increases in the wage index. However, methodology for calculating this budget

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48441

neutrality factor is discussed in section the FY 2017 hospital cost report data adjustment factor for FY 2021. VI.D.4. of this final rule. and taking into account the revisions to Therefore, we are finalizing a budget- the OMB delineations and the transition neutral wage adjustment factor of 1.0013 4. Wage Adjustment policy) and the update to the labor- for FY 2021. To calculate the wage-adjusted facility related share, in a budget-neutral E. Description of the IRF Standard payment for the payment rates set forth manner: Payment Conversion Factor and in this final rule, we multiply the Step 1. Calculate the total amount of Payment Rates for FY 2021 unadjusted Federal payment rate for estimated IRF PPS payments using the IRFs by the FY 2021 labor-related share labor-related share and the wage To calculate the standard payment based on the 2016-based IRF market indexes from FY 2020 (as published in conversion factor for FY 2021, as basket relative importance (73.0 the FY 2020 IRF PPS final rule (84 FR illustrated in Table 5, we begin by percent) to determine the labor-related 39054)). applying the increase factor for FY 2021, portion of the standard payment Step 2. Calculate the total amount of as adjusted in accordance with sections amount. A full discussion of the estimated IRF PPS payments using the 1886(j)(3)(C) of the Act, to the standard calculation of the labor-related share is FY 2021 wage index values (based on payment conversion factor for FY 2020 located in section VI.C. of this final rule. updated hospital wage data and taking ($16,489). Applying the 2.4 percent We then multiply the labor-related into account the changes to geographic increase factor for FY 2021 to the portion by the applicable IRF wage labor market area delineations and the standard payment conversion factor for index. The wage index tables are transition policy) and the FY 2021 FY 2020 of $16,489 yields a standard available on the CMS website at https:// labor-related share of 73.0 percent. payment amount of $16,885. Then, we www.cms.gov/Medicare/Medicare-Fee- Step 3. Divide the amount calculated apply the budget neutrality factor for the for-Service-Payment/ in step 1 by the amount calculated in FY 2021 wage index (taking into InpatientRehabFacPPS/IRF-Rules-and- step 2. The resulting quotient is the FY account the revisions to the CBSA Related-Files.html. 2021 budget-neutral wage adjustment delineations and the transition policy), Adjustments or updates to the IRF factor of 1.0013. and labor-related share of 1.0013, which wage index made under section Step 4. Apply the budget neutrality results in a standard payment amount of 1886(j)(6) of the Act must be made in a factor from step 3 to the FY 2021 IRF $16,907. We next apply the budget budget-neutral manner. We proposed to PPS standard payment amount after the neutrality factor for the CMG relative calculate a budget-neutral wage application of the increase factor to weights of 0.9970, which results in the adjustment factor as established in the determine the FY 2021 standard standard payment conversion factor of FY 2004 IRF PPS final rule (68 FR payment conversion factor. $16,856 for FY 2021. 45689), codified at § 412.624(e)(1), as We discuss the calculation of the We did not receive any comments on described in the steps below. We standard payment conversion factor for the proposed calculation of the standard proposed to use the listed steps to FY 2021 in section VI.E. of this final payment conversion factor for FY 2021. ensure that the FY 2021 IRF standard rule. Therefore, we are finalizing the IRF payment conversion factor reflects the We did not receive any comments on standard payment conversion factor of update to the wage indexes (based on the proposed budget-neutral wage $16,856 for FY 2021.

TABLE 9—CALCULATIONS TO DETERMINE THE FY 2021 STANDARD PAYMENT CONVERSION FACTOR

Explanation for adjustment Calculations

Standard Payment Conversion Factor for FY 2020 ...... $16,489 Market Basket Increase Factor for FY 2021 (2.4 percent), reduced by 0.0 percentage point for the productivity adjustment as re- quired by section 1886(j)(3)(C)(ii)(I) of the Act ...... × 1.024 Budget Neutrality Factor for the Updates to the Wage Index and Labor-Related Share ...... × 1.0013 Budget Neutrality Factor for the Revisions to the CMG Relative Weights ...... × 0.9970 FY 2020 Standard Payment Conversion Factor ...... = 16,856

After the application of the CMG payment conversion factor ($16,856), payment rates for FY 2021 are shown in relative weights described in section V. the resulting unadjusted IRF prospective Table 10. of this final rule to the FY 2021 standard

TABLE 10—FY 2021 PAYMENT RATES

Payment Payment Payment Payment rate CMG rate tier 1 rate tier 2 rate tier 3 no comorbidity

0101 ...... $ 17,385.28 $ 14,863.62 $ 13,791.58 $ 13,198.25 0102 ...... 22,206.09 18,983.23 17,616.21 16,857.69 0103 ...... 28,395.62 24,274.33 22,524.67 21,557.14 0104 ...... 36,891.04 31,537.58 29,263.70 28,006.24 0105 ...... 41,851.76 35,778.55 33,199.58 31,773.56 0106 ...... 48,081.74 41,103.36 38,141.76 36,501.67 0201 ...... 19,375.97 15,842.95 14,231.52 13,301.07 0202 ...... 24,340.06 19,901.88 17,877.47 16,709.35 0203 ...... 29,347.98 23,994.52 21,553.77 20,146.29 0204 ...... 36,525.27 29,865.46 26,826.32 25,074.99 0205 ...... 46,133.19 37,718.67 33,882.25 31,669.05 0301 ...... 20,670.51 16,756.55 15,482.24 14,351.20

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48442 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

TABLE 10—FY 2021 PAYMENT RATES—Continued

Payment Payment Payment Payment rate CMG rate tier 1 rate tier 2 rate tier 3 no comorbidity

0302 ...... 26,482.46 21,469.49 19,836.14 18,386.52 0303 ...... 31,702.76 25,700.34 23,745.05 22,010.56 0304 ...... 35,567.85 28,832.19 26,640.91 24,694.04 0305 ...... 38,851.39 31,495.44 29,100.20 26,972.97 0401 ...... 23,065.75 19,573.19 17,631.38 16,380.66 0402 ...... 30,015.48 25,469.42 22,942.70 21,316.10 0403 ...... 36,022.96 30,568.36 27,535.96 25,582.35 0404 ...... 60,993.44 51,758.03 46,623.70 43,316.55 0405 ...... 46,259.61 39,254.25 35,360.52 32,852.34 0406 ...... 60,629.35 51,447.88 46,343.89 43,056.97 0407 ...... 69,227.59 58,743.16 52,917.73 49,162.21 0501 ...... 22,076.30 17,156.04 16,196.93 14,959.70 0502 ...... 27,429.77 21,316.10 20,124.38 18,588.80 0503 ...... 31,856.15 24,756.41 23,372.53 21,587.48 0504 ...... 37,936.11 29,482.83 27,834.31 25,708.77 0505 ...... 49,492.59 38,463.71 36,312.88 33,541.75 0601 ...... 23,047.21 17,349.88 16,264.35 14,782.71 0602 ...... 28,682.17 21,590.85 20,240.68 18,398.32 0603 ...... 34,072.72 25,648.09 24,043.40 21,853.80 0604 ...... 39,537.43 29,762.64 27,900.05 25,359.85 0701 ...... 21,024.49 17,049.84 16,156.48 14,851.82 0702 ...... 26,286.93 21,317.78 20,201.92 18,568.57 0703 ...... 31,952.23 25,912.73 24,555.82 22,570.18 0704 ...... 36,510.10 29,609.25 28,058.50 25,789.68 0801 ...... 18,993.34 15,285.02 13,688.76 12,749.88 0802 ...... 22,330.83 17,970.18 16,094.11 14,990.04 0803 ...... 24,945.19 20,073.81 17,978.61 16,744.75 0804 ...... 28,749.59 23,136.55 20,721.08 19,298.43 0805 ...... 33,499.61 26,959.49 24,144.53 22,487.59 0901 ...... 20,414.30 16,267.73 15,394.58 13,944.97 0902 ...... 25,415.48 20,252.48 19,166.96 17,363.37 0903 ...... 29,909.29 23,832.70 22,556.70 20,432.84 0904 ...... 34,340.73 27,365.72 25,899.24 23,460.18 1001 ...... 21,845.38 18,310.67 16,431.23 15,177.14 1002 ...... 26,986.46 22,619.07 20,298.00 18,748.93 1003 ...... 31,534.20 26,431.89 23,719.76 21,907.74 1004 ...... 37,165.79 31,151.57 27,955.68 25,820.02 1101 ...... 21,911.11 19,524.30 17,053.22 16,535.74 1102 ...... 29,273.82 26,086.35 22,784.26 22,093.16 1103 ...... 32,894.48 29,312.58 25,600.89 24,825.52 1201 ...... 24,021.49 16,004.77 16,004.77 14,695.06 1202 ...... 30,184.04 20,109.21 20,109.21 18,464.06 1203 ...... 35,085.76 23,374.22 23,374.22 21,464.43 1204 ...... 36,875.87 24,567.62 24,567.62 22,558.38 1301 ...... 19,008.51 15,694.62 14,899.02 13,226.90 1302 ...... 26,007.12 21,474.54 20,385.65 18,098.29 1303 ...... 29,980.08 24,754.72 23,498.95 20,862.67 1304 ...... 34,752.02 28,695.65 27,240.98 24,183.30 1305 ...... 35,188.59 29,054.69 27,581.47 24,486.71 1401 ...... 19,310.23 15,831.16 14,288.83 12,785.28 1402 ...... 24,257.47 19,888.39 17,951.64 16,062.08 1403 ...... 29,454.17 24,147.91 21,796.49 19,502.39 1404 ...... 34,595.25 28,363.59 25,600.89 22,907.30 1501 ...... 21,752.67 17,420.68 16,274.47 15,612.03 1502 ...... 26,822.95 21,481.29 20,068.75 19,251.24 1503 ...... 31,143.15 24,940.14 23,300.05 22,352.74 1504 ...... 36,107.24 28,914.78 27,015.11 25,916.10 1601 ...... 16,668.90 16,668.90 15,033.87 13,532.00 1602 ...... 18,673.08 18,673.08 16,840.83 15,156.92 1603 ...... 22,819.65 22,819.65 20,579.49 18,523.06 1604 ...... 28,994.01 28,994.01 26,148.71 23,536.03 1701 ...... 23,446.70 18,393.27 16,719.47 15,224.34 1702 ...... 28,634.97 22,465.68 20,421.04 18,593.85 1703 ...... 33,947.98 26,630.79 24,208.59 22,042.59 1704 ...... 37,553.48 29,460.92 26,780.81 24,383.89 1705 ...... 41,207.86 32,328.12 29,386.75 26,755.53 1801 ...... 20,869.41 16,554.28 14,866.99 13,788.21 1802 ...... 26,576.86 21,080.11 18,932.66 17,560.58 1803 ...... 32,607.93 25,863.85 23,229.25 21,545.34 1804 ...... 37,391.66 29,659.82 26,637.54 24,705.84 1805 ...... 44,646.49 35,414.46 31,805.59 29,499.69

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48443

TABLE 10—FY 2021 PAYMENT RATES—Continued

Payment Payment Payment Payment rate CMG rate tier 1 rate tier 2 rate tier 3 no comorbidity

1806 ...... 57,510.99 45,617.39 40,968.51 37,998.48 1901 ...... 20,279.45 15,770.47 15,551.35 14,728.77 1902 ...... 27,461.80 21,356.55 21,058.20 19,944.02 1903 ...... 43,722.78 34,001.92 33,526.58 31,753.33 1904 ...... 64,371.38 50,060.63 49,361.11 46,750.12 2001 ...... 20,426.10 16,574.50 15,178.83 13,960.14 2002 ...... 25,113.75 20,378.90 18,662.96 17,162.78 2003 ...... 29,723.87 24,119.25 22,089.79 20,314.85 2004 ...... 33,454.10 27,144.90 24,860.91 22,863.48 2005 ...... 35,967.33 29,186.16 26,730.24 24,581.10 2101 ...... 30,396.42 23,111.26 19,000.08 19,000.08 2102 ...... 40,547.11 30,827.94 25,344.68 25,344.68 5001 ...... - - - 2,769.44 5101 ...... - - - 12,240.83 5102 ...... - - - 30,366.08 5103 ...... - - - 14,250.06 5104 ...... - - - 35,222.30

F. Example of the Methodology for of 1.0454 percent), a wage index of The resulting figure is the wage- Adjusting the Prospective Payment 0.8697, and a teaching status adjustment adjusted labor amount. Next, we Rates of 0.0784. compute the wage-adjusted Federal Table 11 illustrates the methodology To calculate each IRF’s labor and non- payment by adding the wage-adjusted for adjusting the prospective payments labor portion of the prospective labor amount to the non-labor portion of (as described in section VI. of this final payment, we begin by taking the the Federal payment. unadjusted prospective payment rate for rule). The following examples are based Adjusting the wage-adjusted Federal CMG 0104 (without comorbidities) from on two hypothetical Medicare payment by the facility-level beneficiaries, both classified into CMG Table 10. Then, we multiply the labor- related share for FY 2021 (73.0 percent) adjustments involves several steps. 0104 (without comorbidities). The First, we take the wage-adjusted unadjusted prospective payment rate for described in section VI.C. of this final prospective payment and multiply it by CMG 0104 (without comorbidities) rule by the unadjusted prospective the appropriate rural and LIP appears in Table 10. payment rate. To determine the non- Example: One beneficiary is in labor portion of the prospective adjustments (if applicable). Second, to Facility A, an IRF located in rural payment rate, we subtract the labor determine the appropriate amount of Spencer County, Indiana, and another portion of the Federal payment from the additional payment for the teaching beneficiary is in Facility B, an IRF unadjusted prospective payment. status adjustment (if applicable), we located in urban Harrison County, To compute the wage-adjusted multiply the teaching status adjustment Indiana. Facility A, a rural non-teaching prospective payment, we multiply the (0.0784, in this example) by the wage- hospital has a Disproportionate Share labor portion of the Federal payment by adjusted and rural-adjusted amount (if Hospital (DSH) percentage of 5 percent the appropriate wage index located in applicable). Finally, we add the (which would result in a LIP adjustment the applicable wage index table. This additional teaching status payments (if of 1.0156), a wage index of 0.8354, and table is available on the CMS website at applicable) to the wage, rural, and LIP- a rural adjustment of 14.9 percent. https://www.cms.gov/Medicare/ adjusted prospective payment rates. Facility B, an urban teaching hospital, Medicare-Fee-for-Service-Payment/ Table 11 illustrates the components of has a DSH percentage of 15 percent InpatientRehabFacPPS/IRF-Rules-and- the adjusted payment calculation. (which would result in a LIP adjustment Related-Files.html.

TABLE 11—EXAMPLE OF COMPUTING THE FY 2021 IRF PROSPECTIVE PAYMENT

Steps Rural facility A (Spencer Urban facility B (Harrison Co., IN) Co., IN) 1 ...... Unadjusted Payment ...... $28,006.24 $28,006.24 2 ...... Labor Share ...... × 0.730 × 0.730 3 ...... Labor Portion of Payment ...... = $20,444.56 = $20,444.56 4 ...... CBSA-Based Wage Index\ ...... × 0.8354 × 0.8697 5 ...... Wage-Adjusted Amount ...... = $17,079.38 = $17,780.63 6 ...... Non-Labor Amount ...... + $7,561.68 + $7,561.68 7 ...... Wage-Adjusted Payment ...... = $24,641.06 = $25,342.31 8 ...... Rural Adjustment ...... × 1.149 × 1.000 9 ...... Wage- and Rural-Adjusted Payment ...... = $28,312.58 = $25,342.31 10 ...... LIP Adjustment ...... × 1.0156 × 1.0454 11 ...... Wage-, Rural- and LIP-Adjusted Payment ...... = $28,754.25 = $26,492.85 12 ...... Wage- and Rural-Adjusted Payment ...... $28,312.59 $25,342.31 13 ...... Teaching Status Adjustment ...... × 0 × 0.0784 14 ...... Teaching Status Adjustment Amount ...... = $0.00 = $1,986.84 15 ...... Wage-, Rural-, and LIP-Adjusted Payment ...... + $28,754.25 + $26,492.85 16 ...... Total Adjusted Payment ...... = $28,754.25 = $28,479.69

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48444 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

Thus, the adjusted payment for as appropriate to maintain the 3 percent total estimated IRF payments are Facility A would be $28,754.25, and the target. summarized below. adjusted payment for Facility B would To update the IRF outlier threshold Comment: Commenters were be $28,479.69. amount for FY 2021, we proposed to use generally supportive of the update to the FY 2019 claims data and the same outlier threshold. One commenter noted VII. Update to Payments for High-Cost methodology that we used to set the support for expanding the outlier pool Outliers Under the IRF PPS for FY 2021 initial outlier threshold amount in the from 3 percent to 5 percent of aggregate A. Update to the Outlier Threshold FY 2002 IRF PPS final rule (66 FR 41316 IRF payments, while other commenters Amount for FY 2021 and 41362 through 41363), which is also stated that we should reduce the outlier the same methodology that we used to pool below 3 percent and still others Section 1886(j)(4) of the Act provides update the outlier threshold amounts for supported us maintaining the pool at 3 the Secretary with the authority to make FYs 2006 through 2020. The outlier percent. payments in addition to the basic IRF threshold is calculated by simulating Response: We thank the commenters prospective payments for cases aggregate payments and using an for their support of the update to the incurring extraordinarily high costs. A iterative process to determine a outlier threshold. We continue to case qualifies for an outlier payment if threshold that results in outlier believe that maintaining the outlier pool the estimated cost of the case exceeds payments being equal to 3 percent of at 3 percent of aggregate IRF payments the adjusted outlier threshold. We total payments under the simulation. To optimizes the extent to which we can calculate the adjusted outlier threshold determine the outlier threshold for FY reduce financial risk to IRFs of caring by adding the IRF PPS payment for the 2021, we estimate the amount of FY for high-cost patients, while still case (that is, the CMG payment adjusted 2021 IRF PPS aggregate and outlier providing for adequate payments for all by all of the relevant facility-level payments using the most recent claims other non-high cost outlier cases. We adjustments) and the adjusted threshold available (FY 2019) and the proposed refer readers to the FY 2002 IRF PPS amount (also adjusted by all of the FY 2021 standard payment conversion final rule (66 FR 41316, 41362 through relevant facility-level adjustments). factor, labor-related share, and wage 41363) for more information regarding Then, we calculate the estimated cost of indexes, incorporating any applicable the rationale for setting the outlier a case by multiplying the IRF’s overall budget-neutrality adjustment factors. threshold amount for the IRF PPS so CCR by the Medicare allowable covered The outlier threshold is adjusted either that estimated outlier payments would charge. If the estimated cost of the case up or down in this simulation until the equal 3 percent of total estimated is higher than the adjusted outlier estimated outlier payments equal 3 payments. threshold, we make an outlier payment percent of the estimated aggregate Comment: Commenters suggested that for the case equal to 80 percent of the payments. Based on an analysis of the CMS pay the full 3 percent outlier pool difference between the estimated cost of preliminary data used for the proposed each year and recommended that CMS the case and the outlier threshold. rule, we estimated that IRF outlier include historical outlier reconciliation In the FY 2002 IRF PPS final rule (66 payments as a percentage of total dollars in the calculation of the fixed FR 41362 through 41363), we discussed estimated payments would be loss threshold under the IRF PPS. our rationale for setting the outlier approximately 2.6 percent in FY 2020. Additionally, a commenter requested threshold amount for the IRF PPS so Therefore, we proposed to update the that CMS establish a new outlier that estimated outlier payments would outlier threshold amount from $9,300 threshold baseline to be updated by the equal 3 percent of total estimated for FY 2020 to $8,102 for FY 2021 to market basket while other commenters payments. For the FY 2002 IRF PPS maintain estimated outlier payments at suggested that CMS should cap the final rule, we analyzed various outlier approximately 3 percent of total overall outlier payments an IRF can policies using 3, 4, and 5 percent of the estimated aggregate IRF payments for receive. total estimated payments, and we FY 2021. Response: We appreciate the concluded that an outlier policy set at We note that, as we typically do, we commenters’ suggestions regarding 3 percent of total estimated payments updated our data between the FY 2021 changes to the methodology used to would optimize the extent to which we IRF PPS proposed and final rules to establish an outlier threshold for IRF could reduce the financial risk to IRFs ensure that we use the most recent PPS payments. However, as we did not of caring for high-cost patients, while available data in calculating IRF PPS propose changes to this methodology, still providing for adequate payments payments. This updated data includes a these comments are outside the scope of for all other (non-high cost outlier) more complete set of claims for FY this final rule. We will continue to cases. 2019. Based on our analysis using this monitor our IRF outlier policies to Subsequently, we updated the IRF updated data, we continue to estimate ensure that they continue to compensate outlier threshold amount in the FYs that IRF outlier payments as a IRFs appropriately. 2006 through 2020 IRF PPS final rules percentage of total estimated payments After consideration of the comments and the FY 2011 and FY 2013 notices are approximately 2.6 percent in FY received and also taking into account (70 FR 47880, 71 FR 48354, 72 FR 2020. Therefore, we will update the the most recent available data, we are 44284, 73 FR 46370, 74 FR 39762, 75 FR outlier threshold amount from $9,300 finalizing the outlier threshold amount 42836, 76 FR 47836, 76 FR 59256, 77 FR for FY 2020 to $7,906 for FY 2021 to of $7,906 to maintain estimated outlier 44618, 78 FR 47860, 79 FR 45872, 80 FR account for the increases in IRF PPS payments at approximately 3 percent of 47036, 81 FR 52056, 82 FR 36238, 83 FR payments and estimated costs and to total estimated aggregate IRF payments 38514, and 84 FR 39054, respectively) to maintain estimated outlier payments at for FY 2021. maintain estimated outlier payments at approximately 3 percent of total 3 percent of total estimated payments. estimated aggregate IRF payments for B. Update to the IRF Cost-to-Charge We also stated in the FY 2009 final rule FY 2021. Ratio Ceiling and Urban/Rural Averages (73 FR 46370 at 46385) that we would The comments we received on the for FY 2021 continue to analyze the estimated update to the FY 2021 outlier threshold Cost-to-charge ratios (CCRs) are used outlier payments for subsequent years amount to maintain estimated outlier to adjust charges from Medicare claims and adjust the outlier threshold amount payments at approximately 3 percent of to costs and are computed annually

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48445

from facility-specific data obtained from 2021. This means that, if an individual which we could reduce burden for MCRs. IRF specific CCRs are used in the IRF’s CCR were to exceed this ceiling of hospitals and clinicians, improve development of the CMG relative 1.33 for FY 2021, we will replace the quality of care, decrease costs and weights and the calculation of outlier IRF’s CCR with the appropriate ensure that patients receive the best payments under the IRF PPS. In proposed national average CCR (either care. We received comments from IRF accordance with the methodology stated rural or urban, depending on the industry associations, state and national in the FY 2004 IRF PPS final rule (68 geographic location of the IRF). We hospital associations, industry groups FR 45674, 45692 through 45694), we calculated the proposed national CCR representing hospitals, and individual propose to apply a ceiling to IRFs’ CCRs. ceiling by: IRF providers in response to the Using the methodology described in that Step 1. Taking the national average solicitation. In the FY 2019 IRF PPS final rule, we proposed to update the CCR (weighted by each IRF’s total costs, final rule (83 FR 38549 through 38553), national urban and rural CCRs for IRFs, as previously discussed) of all IRFs for we finalized several changes to the as well as the national CCR ceiling for which we have sufficient cost report regulatory requirements that we FY 2021, based on analysis of the most data (both rural and urban IRFs believed were responsive to stakeholder recent data that is available. We apply combined). feedback and helpful to providers in the national urban and rural CCRs in the Step 2. Estimating the standard reducing administrative burden. following situations: deviation of the national average CCR Patients over Paperwork has • New IRFs that have not yet computed in step 1. continued to be a priority for the submitted their first MCR. Step 3. Multiplying the standard agency, as we target ways in which we • IRFs whose overall CCR is in excess deviation of the national average CCR can reduce paperwork burden for of the national CCR ceiling for FY 2021, computed in step 2 by a factor of 3 to hospitals and clinicians while as discussed below in this section. compute a statistically significant improving quality of care for patients. • Other IRFs for which accurate data reliable ceiling. Therefore, we are proposing to revise to calculate an overall CCR are not Step 4. Adding the result from step 3 the current IRF coverage criteria. available. to the national average CCR of all IRFs Specifically, we are focused on reducing Specifically, for FY 2021, we for which we have sufficient cost report medical record documentation proposed to estimate a national average data, from step 1. requirements that we believe are no CCR of 0.490 for rural IRFs, which we Using the updated FY 2018 cost longer necessary. calculated by taking an average of the report data for this final rule, we IRF care is only considered by CCRs for all rural IRFs using their most estimate a national average CCR ceiling Medicare to be reasonable and necessary recently submitted cost report data. of 1.34, using the same methodology. under section 1862(a)(1) of the Act if the Similarly, we proposed to estimate a We did not receive any comments on patient meets all of the IRF coverage national average CCR of 0.400 for urban the proposed update to the IRF CCR requirements outlined in IRFs, which we calculated by taking an ceiling and urban/rural averages for FY § 412.622(a)(3), (4), and (5). Failure to average of the CCRs for all urban IRFs 2021. Therefore, we are finalizing the meet the IRF coverage criteria in a using their most recently submitted cost national average urban CCR at 0.398, the particular case will result in denial of report data. We apply weights to both of national average rural CCR at 0.493, and the IRF claim. Under § 412.622(a)(4)(ii), these averages using the IRFs’ estimated the national average CCR ceiling at 1.34 to document that each patient for whom costs, meaning that the CCRs of IRFs for FY 2021. the IRF seeks payment is reasonably with higher total costs factor more VIII. Removal of the Post-Admission expected to meet all of the requirements heavily into the averages than the CCRs in § 412.622(a)(3) at the time of of IRFs with lower total costs. For this Physician Evaluation Requirement From the IRF Coverage Requirements admission, the patient’s medical record final rule, we have used the most recent at the IRF must contain a post- available cost report data (FY 2018). We are committed to transforming the admission physician evaluation that This includes all IRFs whose cost health care delivery system, and the meets ALL of the following reporting periods begin on or after Medicare program, by putting an requirements: October 1, 2017, and before October 1, additional focus on patient-centered • It is completed by the rehabilitation 2018. If, for any IRF, the FY 2018 cost care and working with providers and physician within 24 hours of the report was missing or had an ‘‘as clinicians to improve patient outcomes. patient’s admission to the IRF. submitted’’ status, we used data from a We refer to this transformation as • It documents the patient’s status on previous FY’s (that is, FY 2004 through ‘‘Patients Over Paperwork.’’ That is, admission to the IRF, includes a FY 2017) settled cost report for that IRF. CMS recognizes it is imperative that we comparison with the information noted We do not use cost report data from develop and implement policies that in the preadmission screening before FY 2004 for any IRF because allow providers and clinicians to focus documentation, and serves as the basis changes in IRF utilization since FY 2004 the majority of their time treating for the development of the overall resulting from the 60 percent rule and patients rather than completing individualized plan of care. IRF medical review activities suggest paperwork. Moreover, we believe it is • It is retained in the patient’s that these older data do not adequately essential for us to reexamine current medical record at the IRF. reflect the current cost of care. Using regulations and administrative Before the current IRF coverage updated FY 2018 cost report data for requirements to ensure that we are not criteria were implemented in January 1, this final rule, we estimate a national placing unnecessary burden on 2010, Medicare permitted ‘‘trial’’ IRF average CCR of 0.493 for rural IRFs, and providers. admissions (HCFAR 85–2–4 through a national average CCR of 0.398 for In the FY 2018 IRF PPS proposed rule 85–2–5). A ‘‘trial’’ IRF admission meant urban IRFs. (82 FR 20743), we included a request for that patients were sometimes admitted In accordance with past practice, we information (RFI) to solicit comments to IRFs for 3 to 10 days to assess proposed to set the national CCR ceiling from stakeholders requesting whether the patients would benefit at 3 standard deviations above the mean information on CMS flexibilities and significantly from treatment in the IRF CCR. Using this method, we proposed a efficiencies. The purpose of the RFI was or other settings. Therefore, if it was national CCR ceiling of 1.33 for FY to receive feedback regarding ways in determined during a ‘‘trial’’ admission

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48446 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

that a patient was not appropriate for admission screening as required in IRF discharges beginning on or after IRF level services, their claims for items § 412.622(a)(4)(i) by making sure each October 1, 2020; our proposed and services provided during the trial prospective IRF patient meets all of the conforming amendments to period could not be denied for failure to requirements to be admitted to the IRF, § 412.622(a)(3)(iv) to remove the meet IRF coverage criteria. Over time, then the post-admission physician reference to § 412.622(a)(4)(ii); and on we concluded that IRFs had developed evaluation is unnecessary. rescinding the above-mentioned policy a better ability and were more capable Finally, we have removed the post- described in chapter 1, sections 110.1.2, of recognizing if a patient was admission physician evaluation of the Medicare Benefit Policy Manual appropriate for IRF services prior to requirement during the public health are summarized below. being admitted. Therefore, the concept emergency for the COVID–19 pandemic Comment: The commenters of a ‘‘trial’’ IRF admission was in the interim final rule with comment unanimously supported CMS’ proposal. eliminated when we rescinded HCFA entitled, ‘‘Medicare and Medicaid Many commenters agreed that the Ruling 85–2 through a Federal Register Programs; Policy and Regulatory information contained in the post- notice titled ‘‘Medicare Program; Revisions in Response to the COVID–19 admission physician evaluation is Criteria for Medicare Coverage of Public Health Emergency’’, published redundant, since the majority of the Inpatient Hospital Rehabilitation on April 6, 2020 (85 FR 19230) information required in the post- Services’’ (74 FR 54835), effective (hereinafter referred to as the April 6, admission physician evaluation is January 1, 2010. We discussed our 2020 IFC). We believe that this will already being captured in the IRF intent to rescind HCFA Ruling 85–2 in provide us with experience to determine patient’s history and physical. Many detail in the FY 2010 IRF PPS final rule whether this requirement can be commenters stated that not only would (74 FR 39797 through 39798). removed permanently to reduce the proposal to remove the post- In addition, the Medicare Benefit paperwork burden for hospitals and admission physician evaluation remove Policy Manual, chapter 1, section clinicians while continuing to provide redundant documentation requirements, 110.1.2 (Pub. L. 100–02), which can be adequate quality of care for patients. but it would also remove the added downloaded from the CMS website at Therefore, we proposed to remove the burden of it being a time sensitive https://www.cms.gov/Regulations-and- post-admission physician evaluation requirement. Guidance/Guidance/Manuals/internet- documentation requirement at Response: We appreciate the Only-Manuals-IOMs.html), states, ‘‘In § 412.622(a)(4)(ii) beginning with FY commenters’ support for the proposal. most cases, the clinical picture of the 2021, that is, for all IRF discharges We agree that finalizing this proposal patient that emerges from the post- beginning on or after October 1, 2020. will ease administrative and admission physician evaluation will Accordingly, we proposed to amend documentation burden in the IRF closely resemble the information § 412.622(a)(3)(iv) to remove the setting. documented in the preadmission reference to § 412.622(a)(4)(ii). We After consideration of the comments screening. However, for a variety of would also rescind the above-mentioned we received, we are finalizing our reasons, the patient’s condition at the policy described in chapter 1, section proposal to remove the post-admission time of admission may occasionally not 110.1.2, of the Medicare Benefit Policy physician evaluation documentation match the description of the patient’s Manual. requirement at § 412.622(a)(4)(ii) We note that removal of the post- condition on the preadmission beginning with FY 2021, that is, for all admission physician evaluation does screening. If this occurs, the IRF must IRF discharges beginning on or after not preclude an IRF patient from being immediately begin the discharge October 1, 2020; our proposed evaluated within the first 24 hours of process. It may take a day or more for conforming amendments to admission if the IRF believes that the the IRF to find placement for the patient § 412.622(a)(3)(iv) to remove the patient’s condition warrants such an in another setting of care. MACs will reference to § 412.622(a)(4)(ii); and on evaluation. We merely proposed that a therefore allow the patient to continue rescinding the above-mentioned policy post-admission physician evaluation receiving treatment in the IRF until described in chapter 1, sections 110.1.2, would no longer be an IRF placement in another setting can be of the Medicare Benefit Policy Manual. found.’’ It further states that in these documentation requirement for IRF particular cases, ‘‘Medicare authorizes discharges occurring on and after IX. Revisions to Certain IRF Coverage its MACs to permit the IRF claim to be October 1, 2020. Moreover, removal of Documentation Requirements the post-admission physician evaluation paid at the appropriate CMG for IRF A. Codification of Existing Preadmission does not remove one of the required patient stays of 3 days or less.’’ Screening Documentation Instructions At this time, we believe that IRFs are rehabilitation physician visits in the and Guidance more knowledgeable in determining first week of the patient’s stay in the IRF prior to admission, whether a patient as specified in § 412.622(a)(3)(iv). IRFs Another way in which CMS has meets the coverage criteria for IRF will need to continue to meet the continued to explore burden reduction services than they were when the IRF requirements at § 412.622(a)(3)(iv) as for providers and clinicians, while coverage requirements were initially they always have. keeping patient centered care a priority, implemented. Over time, we have While removal of the post-admission is by reviewing subregulatory guidance analyzed the data regarding the number physician evaluation does not attribute to identify any longstanding policies, of above-mentioned cases described in to any direct savings for Medicare Part- instructions, or guidance that would be chapter 1, section 110.1.2, of the A or Part-B, we do believe that removing appropriate to codify through notice and Medicare Benefit Policy Manual, and it it will reduce administrative and comment rulemaking. has trended downward since the IRF paperwork burden for both IRF Specifically, in regards to the IRF PPS coverage requirements were initially providers and MACs. payment requirements, we conducted a implemented. In FY 2019, the payment The comments we received on our detailed review of the Medicare Benefit was utilized 4 times across all 1,117 proposal to remove the post-admission Policy Manual, chapter 1, section Medicare certified IRFs. Additionally, physician evaluation documentation 110.1.2 (Pub. L. 100–02), as well as the we believe that if IRFs are doing their requirement at § 412.622(a)(4)(ii) IRF PPS website (https://www.cms.gov/ due diligence while completing the pre- beginning with FY 2021, that is, for all Medicare/Medicare-Fee-for-Service-

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48447

Payment/InpatientRehabFacPPS/index), anticipated post-discharge treatments, and (D) to codify our longstanding to identify any such policies. and other information relevant to the documentation instructions and Currently, § 412.622(a)(4)(i) requires care needs of the patient.’’ Additionally, guidance of the preadmission screening that a comprehensive preadmission we state, ‘‘All findings of the in regulation text, are summarized screening must meet ALL of the preadmission screening must be below. following requirements: conveyed to a rehabilitation physician Comment: The majority of • It is conducted by a licensed or prior to the IRF admission. In addition, commenters supported codifying the certified clinician(s) designated by a the rehabilitation physician must existing preadmission screening rehabilitation physician described in document that he or she has reviewed documentation requirements to the § 412.622(a)(3)(iv) within the 48 hours and concurs with the findings and extent that it makes no substantive immediately preceding the IRF results of the preadmission screening policy changes from the requirements admission. prior to the IRF admission.’’ These have described in the MDPM, chapter 1, • It includes a detailed and been our documentation instructions section 110.1.1. Commenters stated that comprehensive review of each patient’s and guidance since the implementation CMS’ decision to codify these condition and medical history. of the IRF coverage requirements on longstanding instructions and guidance • It serves as the basis for the initial January 1, 2010. would improve clarity and reduce determination of whether or not the We believe that codifying these administrative burden on both IRF patient meets the requirements for an longstanding instructions and guidance providers and MACs. With patient- IRF admission to be considered would improve clarity and reduce centered care being such a high priority reasonable and necessary in administrative burden on both IRF in today’s health care climate, § 412.622(a)(3). providers and MACs. With patient commenters stated that they appreciated • It is used to inform a rehabilitation centered care being such a high priority CMS’ efforts to reduce tasks that take who reviews and comments his or her in today’s healthcare climate, we want away from time spend directly with the concurrence with the findings and to mitigate, as much as possible, tasks patient. Commenters also stated that results of the preadmission screening. they agree with CMS that IRF providers • that take away from time spent directly It is retained in the patient’s with the patient. Lastly, we believe IRF and MACs will benefit from all medical record at the IRF. providers and MACs will appreciate all documentation requirements being When the pre-admission screening preadmission screening documentation located in the same place in the documentation requirements were requirements being located in the same regulations for ease of reference. finalized (74 FR 39790 through 39792), place for ease of reference. Response: We appreciate the we did not specify any individual Thus, in the interest of reducing commenters’ support for the proposal. elements as being required for the pre- administrative burden and being able to We agree that finalizing this proposal admission screening documentation to locate all preadmission screening will reduce administrative burden on be considered detailed and documentation requirements in the both IRF providers and MACs and allow comprehensive in accordance with same place for ease of reference, we more time to be spent in direct patient § 412.622(a)(4)(i)(B). In addition, we did proposed to make the following care. not specify at § 412.622(a)(4)(i)(D) that regulatory amendments: Comment: Some commenters did not the rehabilitation physician must review • At § 412.622(a)(4)(i)(B), to provide support codifying the existing and concur with the preadmission that the comprehensive preadmission preadmission screening documentation screening prior to the IRF admission. screening must include a detailed and requirements, stating that the proposal The Medicare Benefit Policy Manual, comprehensive review of each patient’s did not align with CMS’ Patients over chapter 1, section 110.1.1 (Pub. L. 100– condition and medical history, Paperwork initiative. These commenters 02) provides a more detailed description including the patient’s level of function suggested that instead of codifying the of what elements the preadmission prior to the event or condition that led existing requirements, we should allow screening should include and clarifies to the patient’s need for intensive IRF rehabilitation physicians to rely on that the rehabilitation physician should rehabilitation therapy, expected level of their training and experience to review and concur with the improvement, and the expected length determine which information best preadmission screening prior to the of time necessary to achieve that level supports the appropriateness of the IRF patient being admitted to the IRF. of improvement; an evaluation of the admission. These commenters stated In chapter 1, section 110.1.1 of the patient’s risk for clinical complications; that such an approach would reduce Medicare Benefit Policy Manual the conditions that caused the need for documentation burden, and facilitate currently, we state, ‘‘The preadmission rehabilitation; the treatments needed timely patient admissions to IRFs. screening documentation must indicate (that is, physical therapy, occupational Response: We appreciate the the patient’s prior level of function therapy, speech-language pathology, or commenters’ concerns. However, we (prior to the event or condition that led prosthetics/orthotics); expected respectfully disagree that it would be to the patient’s need for intensive frequency and duration of treatment in better not to specify basic elements to rehabilitation therapy), expected level of the IRF; anticipated discharge include in the pre-admission screening improvement, and the expected length destination; and anticipated post- documentation, as we believe that this of time necessary to achieve that level discharge treatments; and would lead to excessive ambiguity in of improvement. It must also include an • At § 412.622(a)(4)(i)(D), to provide the regulations and create unnecessary evaluation of the patient’s risk for that the comprehensive preadmission confusion. Codifying the current clinical complications, the conditions screening must be used to inform a preadmission screening requirements that caused the need for rehabilitation, rehabilitation physician who must then into regulation text does not change the the treatments needed (that is, physical review and document his or her amount of documentation that is therapy, occupational therapy, speech- concurrence with the findings and required. We did not propose any new language pathology, or prosthetics/ results of the preadmission screening required elements to be completed on orthotics), expected frequency and prior to the IRF admission. the pre-admission screening. Therefore, duration of treatment in the IRF, The comments we received on our the information being collected and the anticipated discharge destination, any proposal to amend § 412.622(a)(4)(i)(B) time it takes to collect the information

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48448 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

remain the same. Additionally, we agree requirements in regulation will increase removal of the following elements from with the commenters that IRF technical denials. We expect that IRFs the pre-admission screening: rehabilitation physicians should have will continue to complete the • Expected frequency and duration of the freedom to document the preadmission screening documentation treatment in the IRF information that best supports their as they always have. • Any anticipated post-discharge decision to admit the patient in the Comment: Some commenters treatments preadmission screening documentation. suggested that codifying the required • Other information relevant to the For this reason, we require a detailed elements of the pre-admission screening patient’s care needs and comprehensive preadmission that are duplicative with other portions We believe that the elements noted screening in which we allow of the patient medical record does not above are duplicative requirements that rehabilitation physicians to include any alleviate documentation burden. These will be captured in other medical additional information they deem commenters suggested that CMS should documentation, such as the history and necessary to the preadmission consider removing some of the physical or the individualized overall screening, in addition to the required preadmission screening elements that plan of care, and require the elements. However, we believe that it is duplicate data already included in other rehabilitation physician to predict what necessary to specify the basic minimum parts of the patient’s IRF medical record will happen during and after the IRF elements that we expect to see in a (such as the history and physical and admission, which often changes during detailed and comprehensive pre- the individualized overall plan of care). the IRF stay. We believe that by admission screening to eliminate A few commenters suggested that CMS removing the above mentioned confusion and ambiguity in the should consider removing the elements, we are not only reducing requirement. preadmission screening documentation provider burden, but we are continuing Comment: Several commenters requirements altogether. to align with the agency’s Patients over suggested that if CMS finalizes the Response: We do not agree with the Paperwork initiative without proposal to codify the pre-admission commenters who suggested that we diminishing the quality of care patients screening requirements into regulation remove the pre-admission screening receive. text, CMS should also consider requirement altogether, as we continue We are, therefore, keeping the amending the timing of this requirement to believe that the pre-admission following key elements of the pre- (which is currently required to be screening is an integral part of admission screening documentation: completed within the 48 hours determining if a patient can tolerate and • immediately preceding the IRF Prior level of function benefit from IRF level services. • admission). Additionally, several Expected level of improvement However, we do agree with commenters • commenters suggested that CMS should Expected length of time to achieve who suggested that we should not allow rehabilitation physicians to give a that level of improvement codify all of the current required • verbal approval of the preadmission Risk for clinical complications elements of the pre-admission • Conditions that caused the need for screening instead of requiring them to screening, as some of the elements rehabilitation review and concur with the findings duplicate data that is already included • Combinations of treatments needed and results of the pre-admission in other parts of the patients IRF • Anticipated discharge destination screening prior to admission to the IRF. Response: We appreciate the medical record (such as the history and We believe that the elements above commenters’ suggestions regarding physical and the individualized overall demonstrate not only the anticipated other ways to reduce burden associated plan of care). We are addressing the functional progress of the patient and with the pre-admission screening. concerns of the current required the therapeutic disciplines that will be However, since we only solicited elements of the preadmission screening utilized to reach those goals, but also comments regarding the elements of the in section IX. of this final rule. the need for medical supervision by a preadmission screening documentation Comment: Many commenters stated physician and supports the need for an in the proposed rule (85 FR 22065, that removing some of the pre- intensive inpatient rehabilitation 22088), any additional changes to the admission screening elements that were program instead of a lower level of care. preadmission screening requirements duplicative of data collected in various Since IRF patients are more medically are beyond the scope of this final rule. other documents in the patient’s IRF complex than ever before, often Therefore, we will take these medical record (such as the history and suffering from chronic illnesses or suggestions into consideration for future physical and the individualized overall disabilities, and/or recovering from rulemaking. plan of care) would reduce burden. devastating physical trauma, we believe Comment: A few commenters were Several commenters suggested removing that these elements are essential in concerned that codifying the the pre-admission screening elements determining if the patient can tolerate preadmission screening requirements that require IRF clinicians to predict and benefit from IRF level care. They into regulation text might increase the what will happen during the IRF stay, require a higher level of care and more amount of technical denials of IRF as this information frequently changes intense therapy and physician claims whenever one or more of the during the IRF stay and thereby supervision than patients in other post- elements is missing from the becomes inaccurate and unnecessary. acute care settings. Therefore, properly preadmission screening documentation. Response: We appreciate the managing a patient’s medical Response: We respectfully disagree suggestions that commenters submitted complexities while developing an with the commenters suggesting that in response to our solicitation of informative and, to the extent possible, codifying the requirements into comments regarding what elements of an all-inclusive pre-admission screening regulation text will increase the amount the pre-admission screening should be is of utmost importance. We continue to of technical denials of IRF claims. We removed in order to reduce burden on believe that having as much pertinent did not propose to add any new rehabilitation physicians. With the information about the patient as requirements to the pre-admission assistance of CMS medical officers, as possible prior to the IRF admission screening. Therefore, we do not believe well as the responses we received from improves the quality of care the patient that merely codifying these existing the IRF industry, we are finalizing receives in the IRF. Additionally,

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48449

discharge planning in IRFs should begin These elements will be removed from Response: We appreciate the on the day of admission, so while it may chapter 1, section 110.1.1 of the commenter’s concern, but the proposed appear that some pre-admission Medicare Benefit Policy Manual. definition was always the definition that screening elements are better discussed we used for the IRF requirements in B. Definition of a ‘‘Week’’ after the patient is admitted, we want to § 412.622. We simply proposed to add continue to encourage IRFs to begin In § 412.622(a)(3)(ii) we state that in the word ‘‘calendar’’ to help clarify the planning for the patient’s discharge certain well-documented cases, this definition and eliminate any possible upon admission. Discharge coordination intensive rehabilitation therapy program confusion. often involves not only the patient, but might instead consist of at least 15 Comment: One commenter suggested family members, caregivers, etc. and it hours of intensive rehabilitation therapy that CMS should instead define a can sometimes take weeks for all of the within a 7 consecutive day period, ‘‘week’’ as a 7 consecutive calendar day discharge details to be sorted out. We beginning with the date of admission to period starting on the day after want to ensure that upon discharge, the IRF. This language is also used admission rather than on the day of patients are set up for continued success many times throughout the IRF Services admission. The commenter suggested in their recovery. section of the Medicare Benefit Policy that because some IRF patients are Comment: One commenter suggested Manual. For more information, we refer admitted late in the day, IRF therapists that we should specify the requirements readers to the Medicare Benefit Policy are unable to provide therapy services for a ‘‘detailed and comprehensive Manual, chapter 1, section 110.1.2 (Pub. on the day of admission. Therefore, review’’ of the patient’s condition and L. 100–02), which can be downloaded according to this commenter, therapists medical history in the pre-admission from the CMS website at https:// often only have 6 days to meet the screening. www.cms.gov/Regulations-and- minimum of 15 hours of intensive Response: As noted above, we believe Guidance/Guidance/Manuals/internet- therapy requirement during the patient’s that it is appropriate for the Only-Manuals-IOMs.html. first week of admission. However, we understand there is rehabilitation physician to use his or her Response: We respectfully disagree training and experience when some question as to whether the term ‘‘Week’’ may be construed as a different with the commenter’s suggested determining what information best modification to the definition of supports his or her decision to admit the period (for example, Monday through Sunday). To provide clarity and reduce ‘‘week.’’ We believe that an IRF patient’s patient to the IRF to include in the pre- stay should be tracked beginning with admission screening. For this reason, we administrative burden for stakeholders regarding several of the IRF coverage the day of admission as it always has. require a detailed and comprehensive We believe that the suggested pre-admission screening in which we requirements, we proposed to amend our regulation text to clarify that we modification would create unnecessary allow rehabilitation physicians to confusion as to what the actual day of include any additional information, define a ‘‘Week’’ as ‘‘a 7 consecutive calendar day period’’ for purposes of the admission is for other documentation outside of the required elements, they purposes in the IRF medical record. deem necessary to the pre-admission IRF coverage requirements. Therefore, we proposed to amend Additionally, IRFs have shown that they screening. are able to meet the minimum of 15 After consideration of the comments § 412.622(c) to clarify our definition of a ‘‘Week’’ as a period of ‘‘7 consecutive hours of intensive therapy requirement, we received, we are finalizing our even if the patient is admitted late in the proposal to amend § 412.622(a)(4)(i)(B) calendar days beginning with the date of admission to the IRF.’’ We also day. and (D) to codify certain elements of our After consideration of the comments longstanding documentation proposed to make conforming amendments to § 412.622(a)(3)(ii) by we received, we are finalizing our instructions and guidance of the proposal to amend § 412.622(c) to preadmission screening in regulation replacing ‘‘7 consecutive day period, beginning with the date of admission to clarify the definition of a ‘‘Week’’ as a text. Specifically, we are finalizing the ‘‘7 consecutive calendar days beginning following elements of the pre-admission the IRF’’ with ‘‘Week’’. The comments we received on our with the date of admission to the IRF.’’ screening requirements prior to proposals to §§ 412.622(c) and We are also finalizing our proposal to codifying the pre-admission screening 412.622(a)(3)(ii) are summarized below. make conforming amendments to elements at § 412.622(a)(4)(i): Comment: The majority of § 412.622(a)(3)(ii) by replacing ‘‘7 • Prior level of function commenters support CMS’ proposal to consecutive day period, beginning with • Expected level of improvement the date of admission to the IRF’’ with • clarify the definition of ‘‘Week.’’ Expected length of time to achieve Commenters stated that CMS’ efforts to ‘‘Week’’. that level of improvement clarify this period of time and utilize • Risk for clinical complications C. Solicitation of Comments Regarding • consistent language throughout the Further Changes to the Preadmission Conditions that caused the need for regulatory text will improve clarity and rehabilitation Screening Documentation Requirements • reduce administrative burden on both Combinations of treatments needed As noted in section VIII. of this final • IRF providers and MACs. Anticipated discharge destination Response: We appreciate the rule, we are considering ways in which These changes will become effective commenters’ support for the proposal. we can continue to help reduce for all IRF discharges on or after Oct. 1, We agree that finalizing this proposal administrative burden on IRF providers. 2020. We are not finalizing the will reduce administrative burden on Specifically, we have been reviewing following elements of the pre-admission both IRF providers and MACs. the pre-admission screening screening documentation: Comment: One commenter expressed documentation requirements under • Expected frequency and duration of concern that codifying the definition of § 412.622(a)(4)(i) and are considering treatment in the IRF a ‘‘Week’’ would cause greater provider whether we could remove some of the • Any anticipated post-discharge burden, as IRF providers would need to requirements, but still maintain an IRF treatments independently track each patient’s patient’s clinical history, as well as • Other information relevant to the admission date to ensure that other documentation of their medical and patient’s care needs requirements were being met timely. functional needs in sufficient detail to

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48450 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

adequately describe and support the the IRF that the patient requires that they need to have to appropriately patient’s need for IRF services. physician supervision by a assess IRF patients both medically and To assist us in balancing the needs of rehabilitation physician. The functionally? the patient with the desire to reduce the requirement for medical supervision • How would the non-physician regulatory burden on rehabilitation means that the rehabilitation physician practitioner’s credentials be physicians, we solicited feedback from must conduct face-to-face visits with the documented and monitored to ensure stakeholders in the proposed rule about patient at least 3 days per week that IRF patients are receiving high potentially removing some of the throughout the patient’s stay in the IRF quality care? preadmission screening documentation to assess the patient both medically and • Do stakeholders believe that requirements. Specifically, we requested functionally, as well as to modify the utilizing non-physician practitioners to feedback regarding: course of treatment as needed to fulfill some of the requirements that are • What aspects of the preadmission maximize the patient’s capacity to currently required to be completed by a screening do stakeholders believe are benefit from the rehabilitation process. rehabilitation physician would have an most or least critical and useful for For more information, please refer to the impact of the quality of care for IRF supporting the appropriateness of an Medicare Benefit Policy Manual, patients? IRF admission, and why? chapter 1, section 110.2.4 (Pub. L. 100– We received significant feedback in We appreciate the commenters’ 02), which can be downloaded from the response to our solicitation of comments responses to this solicitation. We have CMS website at https://www.cms.gov/ on allowing non-physician practitioners summarized and responded to those Regulations-and-Guidance/Guidance/ to fulfill the requirements at comments in section IX.A. of this final Manuals/internet-Only-Manuals- § 412.622(a)(3), (4) and (5). However, the rule. IOMs.html. comments from stakeholders were conflicting. Some commenters X. Amendment To Allow Non- In addition, under § 412.622(a)(4)(ii), expressed concern with allowing non- physician Practitioners To Perform to document that each patient for whom physician practitioners to fulfill some or Some of the Weekly Visits That Are the IRF seeks payment is reasonably all of the requirements that Currently Required To Be Performed by expected to meet all of the requirements rehabilitation physicians are currently a Rehabilitation Physician in § 412.622(a)(3) at the time of admission, the patient’s medical record required to meet. These commenters In October 2019, Executive Order at the IRF must contain a post- generally raised the following specific 13890, entitled ‘‘Protecting and admission physician evaluation that concerns: Improving Medicare for Our Nation’s must, among other requirements, be • The first concern was that IRF Seniors,’’ available at https:// completed by a rehabilitation physician patients would not continue receiving www.whitehouse.gov/presidential- within 24 hours of the patient’s the hospital level and quality of care actions/executive-order-protecting- admission to the IRF. For more that is necessary to treat such complex improving-medicare-nations-seniors/, information, we refer readers to the conditions in an IRF if being treated was issued by the President of the Medicare Benefit Policy Manual, only by a non-physician practitioner. • United States instructing the Secretary chapter 1, section 110.1.2 (Pub. L. 100– The second concern was that non- to, among other things, propose a 02), which can be downloaded from the physician practitioners have no regulation under the Medicare program CMS website at https://www.cms.gov/ specialized training in inpatient that would eliminate regulatory billing Regulations-and-Guidance/Guidance/ rehabilitation that would enable them to and other such requirements that are Manuals/internet-Only-Manuals- adequately assess the interaction more stringent than applicable Federal IOMs.html. between patients’ medical and or State laws and that limit In response to the RFI in the FY 2018 functional care needs in an IRF. professionals from practicing within IRF PPS proposed rule (82 FR 20742 Conversely, we also received their full scope of practice. through 20743), we received comments comments from industry stakeholders In responding to this Executive Order, suggesting that we consider amending stating that non-physician practitioners CMS has begun to review any IRF the requirements in § 412.622(a)(3)(iv) do have the necessary education and are coverage requirements at § 412.622(a) and (a)(4)(ii) to allow non-physician qualified to provide the same level of where we explicitly state the practitioners to fulfill some of the care currently being provided to IRF requirement must be completed by a requirements that rehabilitation patients by rehabilitation physicians. rehabilitation physician to see if, when physicians are currently required to These commenters stated that non- appropriate, some of these requirements complete. The commenters suggested physician practitioners are capable of could be fulfilled by non-physician that expanding the use of non-physician performing the same tasks that the practitioners (physician assistants, practitioners in meeting some of the IRF rehabilitation physicians currently must nurse practitioners, and licensed coverage requirements would ease the perform in IRFs. These commenters practical nurses). documentation burden on rehabilitation stated that non-physician practitioners Several of the IRF coverage physicians. have a history of treating complex requirements at § 412.622(a)(3), (4), and We solicited additional comments in patients across all settings, and are (5) explicitly state that a requirement the FY 2019 proposed rule (83 FR 20998 already doing so in IRFs. They also must be completed by a rehabilitation through 20999) on potentially allowing stated that the types of patient physician, defined at § 412.622(c) as a non-physician practitioners to fulfill assessments that they would be required licensed physician who is determined some of the requirements in to do in the IRFs are the same types of by the IRF to have specialized training § 412.622(a)(3), (4), and (5) that assessments they are currently and experience in inpatient rehabilitation physicians are currently authorized to provide in other settings, rehabilitation. For example, under required to complete. Specifically, we such as inpatient hospitals, skilled § 412.622(a)(3)(iv), for an IRF claim to sought feedback from the industry and nursing facilities, hospice, and be considered reasonable and necessary asked: outpatient rehabilitation centers. under section 1862(a)(1) of the Act, • Does the IRF industry believe non- Additionally, commenters stated that there must be a reasonable expectation physician practitioners have the because non-physician practitioners at the time of the patient’s admission to specialized training in rehabilitation practice in conjunction with

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48451

rehabilitation physicians in IRFs care to complex IRF patients. Lastly, we impact on the quality of care for IRF already, time spent practicing with stated that we believed that it continues patients. We also requested information rehabilitation physicians has provided to be the IRF’s responsibility to exercise from IRFs regarding whether or not their many non-physician practitioners with their best judgment regarding who has facilities would allow non-physician direct rehabilitation experience to appropriate specialized training and practitioners to complete all of the provide quality of care and services to experience, provided that these duties requirements at § 412.622(a)(3), (4), and IRF patients. Lastly, several commenters are within the practitioner’s scope of (5), some of these requirements at stated that non-physician practitioner practice under applicable state law. § 412.622(a)(3), (4), and (5), or none of educational programs include didactic We proposed to mirror our current the requirements at § 412.622(a)(3), (4), and clinical experiences to prepare definition of a rehabilitation physician and (5). We stated that this information graduates for advanced clinical practice. with the proposed definition of a non- would assist us in refining our estimates These commenters stated that current physician practitioner in that we expect of the changes in Medicare payment that accreditation requirements and the IRF to determine whether the non- may result from the proposal. competency-based standards ensure that physician practitioner has specialized The comments we received on our non-physician practitioners are training and experience in inpatient proposal to allow non-physician equipped to provide safe, high level rehabilitation and thus may perform any practitioners to perform the IRF quality care. of the duties that are required to be coverage requirements at Additionally, several commenters performed by a rehabilitation physician, § 412.622(a)(3), (4), and (5) that are stated that allowing non-physician provided that the duties are within the currently required to be performed by a practitioners to practice to the full non-physician practitioner’s scope of rehabilitation physician, provided that extent of their education, training, and practice under applicable state law. these duties are within the practitioner’s scope of practice will increase the Therefore, we proposed to add new scope of practice under applicable state number of available health care § 412.622(d) providing that for purposes law, are summarized below. providers able to work in the post-acute of § 412.622, a non-physician Comment: Some commenters care setting resulting in lower costs and practitioner who is determined by the expressed support for the proposal to improved quality of care. Allowing the IRF to have specialized training and allow non-physician practitioners to use of non-physician practitioners, experience in inpatient rehabilitation perform the IRF coverage requirements. authorized to provide care to the full may perform any of the duties that are Some commenters stated that non- extent of their states scope of practice, required to be performed by a physician practitioners are qualified, would also help offset deficiencies in rehabilitation physician, provided that prepared, and experienced at physician supply, especially in rural the duties are within the non-physician performing and documenting mandatory areas. Physician burnout is also practitioner’s scope of practice under assessments such as those of IRF something that commenters suggested applicable state law. patients, as well as providing the high can occur overtime, and they Additionally, we noted that if an IRF quality of care these patients require. commented that allowing the use of believes in any given situation a Additionally, the commenters suggested non-physician practitioners could rehabilitation physician should have that authorizing non-physician potentially help decrease the rate at sole responsibility, or shared practitioners, who have a long history of which physicians move on from responsibility with non-physician providing safe, high quality care to their providing care in IRFs. practitioners, for overseeing a patient’s patients, to treat patients would After carefully reviewing and taking care, the IRF should make that decision. improve the care for IRF patients by all feedback that we received to our Furthermore, IRFs are required to meet reducing the burdens of the patient’s solicitation of comments into the hospital Conditions of Participation clinical care team, thus enabling consideration, we proposed to allow the in section 1861(e) of the Act and in the facilities to utilize their staff in the most use of non-physician practitioners to regulations in part 482. Under section efficient way possible. One of the perform the IRF services and 1861(e)(4) of the Act and § 482.12(c), commenters suggested that non- documentation requirements currently every Medicare patient is generally physician practitioners were an required to be performed by the required to be under the care of a important part of the IRF team already rehabilitation physician in physician. assisting with many consults, § 412.622(a)(3), (4), and (5). In the FY Our proposal did not preclude IRFs admissions, and daily patient visits. 2021 IRF PPS proposed rule, we stated from making decisions regarding the Therefore, extending their ability to that we agreed with commenters that role of rehabilitation physicians or non- perform the proposed duties and sign non-physician practitioners have the physician practitioners. We merely documentation under the supervision training and experience to perform the proposed to allow non-physician and guidance of a board certified IRF requirements, and believe that practitioners to perform the IRF rehabilitation physician would provide allowing IRFs to utilize non-physician coverage requirements at additional assistance to IRF treatment practitioners practicing to their full § 412.622(a)(3), (4), and (5) that are teams. A few commenters that scope of practice under applicable state currently required to be performed by a supported CMS’ proposal stated that law will increase access to post-acute rehabilitation physician, provided that given ongoing staffing challenges that care services specifically in rural areas, these duties are within the practitioner’s many providers face, including where rehabilitation physicians are scope of practice under applicable state physician burnout, particularly in often in short supply. We stated that we law. certain geographic areas, allowing non- believed that alleviating access barriers We invited public comment on this physician practitioners to practice to the to post-acute care services will improve proposal. In particular, we invited top of their license and use their full the quality of care and lead to better commenters to provide feedback on skill set would help lower health care patient outcomes in rural areas. We also whether they believed that utilizing costs and increase access to care. Lastly, agreed with commenters that non- non-physician practitioners to fulfill a few commenters stated that it would physician practitioners have the some of the requirements that are be helpful if CMS would clearly define appropriate education and are capable currently required to be completed by a the role of non-physician practitioners of providing hospital level quality of rehabilitation physician would have an in IRFs as there are clinical differences

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48452 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

between nurse practitioners and comorbidities and medication needs of maintains the central role and judgment physician assistants, and state scope of IRF patients and evaluate and order of the rehabilitation physician in the practice laws differ. durable medical equipment for patients patient’s plan of care, while also Response: We appreciate the with new onset of disabilities. allowing for the expanded role of non- commenters’ support for the proposal to Commenters suggested that substituting physician practitioners. We believe this allow non-physician practitioners to non-physician practitioners for approach takes full advantage of the perform the IRF coverage requirements rehabilitation physicians in the IRF is extensive training and knowledge that at § 412.622(a)(3), (4), and (5) that are likely to result in worse clinical rehabilitation physicians bring to the currently required to be performed by a outcomes for patients and an increase in care of IRF patients, but also allows rehabilitation physician, provided that medical complications, readmission, patients to benefit from the training that these duties are within the practitioner’s acute transfers, and emergency room non-physician practitioners have in scope of practice under applicable state utilization. Commenters noted that the caring for complex patients. We believe law. We continue to believe that non- costs of these outcomes—both to the that this measured approach may result physician practitioners have an Medicare program and to individual in improved outcomes for patients, as it important role in treating IRF patients. patients—would more than offset any takes full advantage of the skills of both We agree with commenters that non- projected savings tied to the substitution non-physician practitioners and physician practitioners have training of non-physician practitioners. Lastly, rehabilitation physicians. We do not and experience in caring for complex commenters stated that allowing non- estimate the savings from this expansion patient populations, and that they can physician practitioners to perform of the role of non-physician provide much-needed help to specific clinical and patient care practitioners in IRFs to be significant, rehabilitation physicians. However, functions that currently can only be but we also do not anticipate that this given the overall nature of the satisfied by rehabilitation physicians is measured approach will increase costs comments that we received in response inconsistent with Medicare’s benefit to the Medicare program, as suggested to this proposal, we believe it is prudent structure for rehabilitation hospitals and by commenters, because rehabilitation at this time to take a more measured post-acute care benefits. These physicians will still be directly involved approach to expanding the role of non- commenters indicated that the IRF in establishing and implementing the physician practitioners in the IRF benefit structure explicitly requires that patient’s IRF plan of care. Non- setting to ensure that the vulnerable IRF each patient requires physician physician practitioners can add populations will continue to receive the supervision by a rehabilitation significant expertise to the patient care highest quality of care for their post- physician, as specified at team, including recognizing emergent acute rehabilitation needs. Therefore, § 412.622(a)(3)(iv). issues that, if left unaddressed, could we are finalizing a portion of the lead to unplanned readmissions to the Response: We appreciate the proposed policy by amending acute care hospitals. § 412.622(a)(3)(iv) to allow non- commenters’ feedback regarding the Comment: The majority of physician practitioners to conduct one proposal to allow non-physician commenters suggested that non- of the three required rehabilitation practitioners to perform the IRF physician practitioners do not have the physician visits in every week of the IRF coverage requirements at adequate training and experience to stay, with the exception of the first § 412.622(a)(3), (4), and (5) that are fulfill the preadmission screening, week, if permitted under state law. In currently required to be performed by a individualized overall plan of care, 3 the first week of the IRF stay, we rehabilitation physician, provided that weekly face-to-face visits, and continue to require the rehabilitation these duties are within the practitioner’s interdisciplinary team meeting physician to visit patients a minimum of scope of practice under applicable state requirements. Many of the commenters three times to ensure that the patient’s law. Given the strong concerns that stated that physicians, by nature of their plan of care is fully established and many commenters noted over this medical training and education, are the optimized to the patient’s care needs in proposed policy, we believe that the only types of health care providers that the IRF. prudent approach at this time is to should make decisions tied to a Comment: The majority of finalize only a portion of the proposed patient’s admission. Therefore, the commenters urged CMS not to finalize policy. Thus, we are finalizing a portion majority of commenters stated that they this proposal, expressing concerns that of the proposed policy by amending did not believe that non-physician the change would have negative impacts § 412.622(a)(3)(iv) to allow non- practitioners should be conducting the on the health, quality of care, and physician practitioners to conduct one pre-admission screening, as it is the recovery success rate of IRF patients. of the three required rehabilitation initial evaluation and review of the These commenters stated that the role physician visits in every week of the IRF patient’s condition and need for and judgment of rehabilitation stay, with the exception of the first rehabilitation therapy and medical physicians in IRFs is central to the week, if permitted under state law. We treatment. Commenters also stated that successful outcomes of complex IRF believe that this approach mitigates having a rehabilitation physician make patients, and a key element in what many of the concerns expressed by the admission decisions would separates IRFs from other lesser commenters, because it preserves the significantly reduce erroneous claim intensive post-acute care settings. The existing benefit structure of the IRF reviews and denials. commenters stated that rehabilitation setting, ensures the quality of care for Many commenters suggested that, physicians are specifically trained to IRF patients by continuing the while non-physician practitioners can handle the distinctive needs of highly rehabilitation physician’s close play a vital role in supporting the complex medical rehabilitation patients involvement in the establishment of the rehabilitation physician in coordinating such as spinal cord injury patients, patient’s plan of care and the initial the patient’s medical needs with his or brain injury patients, and complex implementation of the plan of care, and her functional rehabilitation needs, they wound issues seen in mobility-impaired allows non-physician practitioners to do not have the adequate training and patients. Additionally, commenters assist in implementing the plan of care experience to play a direct role in the suggested that rehabilitation physicians once it has been fully established. We execution of the individualized overall are better trained to manage the believe that this balanced approach plan of care for IRF patients.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48453

Commenters noted that the quality of care and we want to ensure week. We believe that this measured complexity of patients in IRFs has been that the policies we finalize provide just approach to expanding the role of non- increasing, and it would be illogical, that. Thus, we are finalizing a portion of physician practitioners in IRFs balances and particularly ill-timed in light of the the proposed policy by amending the commenters’ concerns about COVID–19 public health emergency, to § 412.622(a)(3)(iv) to allow non- maintaining the rehabilitation physician allow a non-physician practitioner to physician practitioners to conduct one at the core of the patient’s plan of care synthesize and approve all of the of the three required rehabilitation in the IRF with the benefits of elements of the individualized overall physician visits in every week of the IRF expanding the role of non-physician plan of care for IRF patients. stay, with the exception of the first practitioners, who play an important Many commenters stated that CMS’ week, if permitted under state law. We role in the interdisciplinary team and proposal to allow non-physician believe that this measured approach the care of complex patients. We are practitioners to administer the three responds to the concerns expressed by also making conforming changes to weekly face-to-face visits was commenters by preserving the § 412.29(e) to allow, beginning with the particularly concerning because the rehabilitation physician’s training and second week of admission to the IRF, a physician visits with patients judgment at the center of the patient’s non-physician practitioner who is significantly inform the course of care plan in the IRF, while also allowing determined by the IRF to have patients’ treatment and overall plans of non-physician practitioners to take an specialized training and experience in care. In these visits, physicians modify expanded role in the care of patients. inpatient rehabilitation to conduct 1 of patients’ course of treatment as needed, We believe that this approach will allow the 3 required face-to-face visits with so that the patient’s capacity to benefit non-physician practitioners to play a the patient per week, provided that such is maximized. Commenters also vital role in supporting the duties are within the non-physician suggested that a patient’s ability to rehabilitation physician by coordinating practitioner’s scope of practice under benefit from the IRF care is diminished the patient’s medical needs with his or applicable state law. if lesser trained clinicians are tasked her functional rehabilitation needs once XI. Method for Applying the Reduction with treating the patients. Additionally, the rehabilitation physician has fully to the FY 2021 IRF Increase Factor for commenters suggested that some states established the patient’s plan of care in IRFs That Fail To Meet the Quality would not permit (under their current the first week. This approach also Reporting Requirements laws) non-physician practitioners to maintains the rehabilitation physician’s engage in these visits because such direct involvement in other aspects of As previously noted, section services are only intended to be the patient’s care. 1886(j)(7)(A)(i) of the Act requires the performed by a licensed physician with application of a 2-percentage point the skillset that allows them to assess After consideration of the comments reduction of the applicable market the patient or make modifications to we received, we are finalizing a portion basket increase factor for payments for treatment plans, both medically and of our proposed policy changes by discharges occurring during such FY for functionally. amending § 412.622(a)(3)(iv) to allow, Lastly, commenters stated that all beginning with the second week of IRFs that fail to comply with the quality recommendations made by the admission to the IRF, a non-physician data submission requirements. In interdisciplinary team are directly practitioner who is determined by the accordance with § 412.624(c)(4)(i), we related to the prognosis and oversight of IRF to have specialized training and apply a 2-percentage point reduction to the patient’s care and should be experience in inpatient rehabilitation to the applicable FY 2021 market basket authorized only by a rehabilitation conduct 1 of the 3 required face-to-face increase factor in calculating an physician, as the complex nature of the visits with the patient per week, adjusted FY 2021 standard payment patient in IRFs, combined with the provided that such duties are within the conversion factor to apply to payments delivery of an intensive course of non-physician practitioner’s scope of for only those IRFs that failed to comply therapy, requires skills and expertise practice under applicable state law. To with the data submission requirements. that far exceed those held by a non- be clear, in the first week of the IRF As previously noted, application of the physician practitioner. stay, we continue to require the 2-percentage point reduction may result Response: We appreciate the rehabilitation physician to visit patients in an update that is less than 0.0 for a commenters’ feedback. While we a minimum of three times to ensure that FY and in payment rates for a FY being continue to believe that non-physician the patient’s plan of care is fully less than such payment rates for the practitioners are well-trained to care for established and optimized to the preceding FY. Also, reporting-based complex patient populations, the patient’s care needs in the IRF. In the reductions to the market basket increase concerns that commenters brought to second, third, fourth weeks of the stay, factor are not cumulative; they only our attention on this proposal have led and beyond, we will continue to require apply for the FY involved. us to believe that we need to take a more Medicare fee-for-services beneficiaries Table 12 shows the calculation of the measured approach to expanding the in IRFs to receive a minimum of three proposed adjusted FY 2021 standard role of non-physician practitioners in rehabilitation physicians visits per payment conversion factor that would the IRF setting without diminishing the week, but will amend § 412.622(a)(3)(iv) be used to compute IRF PPS payment quality of care. We understand that IRF to allow non-physician practitioners to rates for any IRF that failed to meet the beneficiaries are a vulnerable independently conduct one of these quality reporting requirements for the population that require the highest three minimum required visits per applicable reporting period.

TABLE 12—CALCULATIONS TO DETERMINE THE ADJUSTED FY 2021 STANDARD PAYMENT CONVERSION FACTOR FOR IRFS THAT FAILED TO MEET THE QUALITY REPORTING REQUIREMENT

Explanation for adjustment Calculations

Standard Payment Conversion Factor for FY 2020 ...... $ 16,489

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48454 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

TABLE 12—CALCULATIONS TO DETERMINE THE ADJUSTED FY 2021 STANDARD PAYMENT CONVERSION FACTOR FOR IRFS THAT FAILED TO MEET THE QUALITY REPORTING REQUIREMENT—Continued

Explanation for adjustment Calculations

Market Basket Increase Factor for FY 2021 (2.4 percent), reduced by 0.0 percentage point for the productivity adjust- ment as required by section 1886(j)(3)(C)(ii)(I) of the Act, and further reduced by 2 percentage points for IRFs that failed to meet the quality reporting requirement ...... × 1.004 Budget Neutrality Factor for the Updates to the Wage Index and Labor-Related Share ...... × 1.0013 Budget Neutrality Factor for the Revisions to the CMG Relative Weights ...... × 0.9970 Adjusted FY 2021 Standard Payment Conversion Factor ...... = $ 16,527

XII. Miscellaneous Comments submission threshold from 95 percent to unnecessary, or contrary to the public Comment: Several commenters 80 percent, for consistency with the interest, the rule shall take effect at such recommended that CMS evaluate how SNF QRP and LTCH QRP. time as the agency determines. The the public health emergency will impact Response: We consider these United States is responding to an future reimbursement under current comments to be outside the scope of the outbreak of respiratory disease caused practices and encouraged CMS to work current rulemaking. We refer providers by a novel (new) coronavirus that has with stakeholders to make adjustments to the interim final rule with comment now been detected in more than 190 to the case-mix system in the future. entitled, ‘‘Additional Policy and locations internationally, including in Response: We recognize the impact Regulatory Revisions in Response to the all 50 States and the District of that the public health emergency is COVID–19 Public Health Emergency Columbia. The virus has been named having on all providers and we intend and Delay of Certain Reporting ‘‘SARS-CoV–2’’ and the disease it to examine the effects of this emergency Requirements for the Skilled Nursing causes has been named ‘‘coronavirus in available Medicare data. We will Facility Quality Reporting Program’’ (85 disease 2019’’ (abbreviated ‘‘COVID– propose any modifications to the FR 27595 through 27596) regarding the 19’’). existing methodologies used to update delay in the compliance date for the On January 30, 2020, the International reimbursements in future rulemaking if Transfer of Health Information quality Health Regulations Emergency and when appropriate. We value measures and certain standardized Committee of the World Health transparency in our processes and will patient assessment data elements Organization (WHO) declared the continue to engage stakeholders in (SPADEs). We also refer providers to our outbreak a ‘‘Public Health Emergency of future development of payment policies. June 23, 2020 announcement at https:// international concern.’’ On January 31, Comment: We received several www.cms.gov/Medicare/Quality- 2020, Health and Human Services comments on the IRF QRP. Several Initiatives-Patient-Assessment- Secretary, Alex M. Azar II, declared a commenters noted that the status of Instruments/IRF-Quality-Reporting/ public health emergency (PHE) for the IRF–PAI 4.0 is unknown along with the Spotlights-Announcements that, United States to aid the nation’s adoption of additional standardized effective July 1, 2020, IRFs must resume healthcare community in responding to patient assessment data element items reporting their quality data. COVID–19. On March 11, 2020, the that are being added to IRF–PAI 4.0. We received several additional WHO publicly characterized COVID–19 Several commenters thanked CMS for comments that were outside the scope as a pandemic. On March 13, 2020, the efforts taken to reduce data reporting of the FY 2021 IRF PPS proposed rule. President of the United States declared burden, such as delaying the release of Specifically, we received comments the COVID–19 outbreak a national IRF–PAI 4.0, and granting an exception regarding the facility-level adjustment emergency. to the IRF QRP reporting requirements factors, cognitive function and resource Due to CMS prioritizing efforts in for Quarter 1 and Quarter 2 of 2020. One use in IRFs, the motor score, the support of containing and combatting commenter requested that the reliability and validity of IRF data the COVID–19 PHE, and devoting exemption be extended for all affected collection, modifications to the 60 significant resources to that end, it was quarters. One commenter requested that percent rule, IRF regulatory burden impracticable for CMS to complete the measure reliability analyses be reduction, the use of recreational work needed on the IRF PPS final rule performed and shared to ensure the therapy, IMPACT Act data availability, in accordance with our usual schedule accuracy of measure calculations in COVID–19 health pandemic, post-acute for this rulemaking, which aims for a light of truncated, incomplete, or care payment reform, and the PAC PPS publication date providing for at least COVID–19 affected data. prototype among other topics. We thank 60 days of public notice before the start Several commenters also provided the commenters for bringing these of the fiscal year to which it applies. recommendations for additions and issues to our attention, and will take The IRF PPS final rule is necessary to modifications of IRF QRP measures. these comments into consideration for annually review and update the One commenter suggested CMS collect potential policy refinements. payment system, and it is critical to and stratify patient and caregiver data ensure that the payment policies for this based on key variables of inequities in XIII. Waiver of the 60-Day Delayed payment system are effective on the first patient care within population segments Effective Date for the Final Rule day of the fiscal year to which they are and other communities of belonging, We ordinarily provide a 60-day delay intended to apply. Therefore, in light of such as race and ethnicity, for all types in the effective date of final rules after the COVID–19 PHE and the resulting of measures. the date they are issued in accord with strain on CMS’s resources, it was One commenter recommended that the Congressional Review Act (CRA) (5 impracticable for CMS to publish the CMS exercise flexibility regarding the U.S.C. 801(a)(3)). However, section IRF PPS final rule 60 days before the non-compliance payment penalty. 808(2) of the CRA provides that, if an effective date, and we are hereby Another commenter requested that CMS agency finds good cause that notice and waiving the 60-day requirement and lower the IRF QRP APU minimum public procedure are impracticable, determining that the IRF PPS final rule

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48455

will take effect 55 days after issuance; our longstanding documentation finalizing our proposal to amend the IRF it would be contrary to the public instructions and guidance of the coverage requirements to remove the interest for CMS to do otherwise. preadmission screening in regulation post-admission physician evaluation text. As per our discussion in the FY requirement and codify existing XIV. Provisions of the Final Regulations 2010 IRF PPS final rule (74 CR 39803), documentation instructions and In this final rule, we are adopting the we do not believe that there is any guidance. provisions set forth in the FY 2021 IRF burden associated with this B. Overall Impact PPS proposed rule (85 FR 22065), requirement. The burden associated specifically: with this requirement is the time and We have examined the impacts of this • We will update the CMG relative effort put forth by the rehabilitation rule as required by Executive Order weights and average length of stay physician to document his or her 12866 on Regulatory Planning and values for FY 2021, in a budget neutral concurrence with the pre-admission Review (September 30, 1993), Executive manner, as discussed in section V. of findings and the results of the pre- Order 13563 on Improving Regulation this final rule. admission screening and retain the and Regulatory Review (January 18, • We will update the IRF PPS information in the patient’s medical 2011), the Regulatory Flexibility Act payment rates for FY 2021 by the market record. The burden associated with this (RFA) (September 19, 1980, Pub. L. 96– basket increase factor, based upon the requirement is in keeping with the 354), section 1102(b) of the Act, section most current data available, with a ‘‘Conditions of Participation: Medical 202 of the Unfunded Mandates Reform productivity adjustment required by record services,’’ that are already Act of 1995 (March 22, 1995, Pub. L. section 1886(j)(3)(C)(ii)(I) of the Act, as applicable to Medicare participating 104–4), Executive Order 13132 on described in section VI. of this final hospitals. Therefore, we believe that this Federalism (August 4, 1999), the rule. requirement reflects customary and Congressional Review Act (5 U.S.C. • We will adopt the revised OMB usual business and medical practice. 804(2)), and Executive Order 13771 on delineations, the IRF wage index Thus, in accordance with section Reducing Regulation and Controlling transition, and the update to the labor- 1320.3(b)(2) of the Act, the burden is not Regulatory Costs (January 30, 2017). Executive Orders 12866 and 13563 related share for FY 2021 in a budget- subject to the PRA. neutral manner, as described in section As discussed in section VIII. of this direct agencies to assess all costs and VI. of this final rule. final rule, we are removing the post- benefits of available regulatory • alternatives and, if regulation is We will calculate the final IRF admission physician evaluation necessary, to select regulatory standard payment conversion factor for requirement at § 412.622(a)(4)(ii) approaches that maximize net benefits FY 2021, as discussed in section VI. of beginning with FY 2021, that is, for all (including potential economic, this final rule. IRF discharges beginning on or after • environmental, public health and safety We will update the outlier October 1, 2020. Accordingly, we are effects, distributive impacts, and threshold amount for FY 2021, as amending § 412.622(a)(3)(iv) to remove equity). Section 3(f) of Executive Order discussed in section VII. of this final the reference to § 412.622(a)(4)(ii). We 12866 defines a ‘‘significant regulatory rule. discuss any potential cost savings from • action’’ as an action that is likely to We will update the CCR ceiling and this revision in the Overall Impact result in a rule: (1) Having an annual urban/rural average CCRs for FY 2021, section of this final rule. as discussed in section VII. of this final effect on the economy of $100 million rule. XVI. Regulatory Impact Analysis or more in any 1 year, or adversely and • materially affecting a sector of the We will amend the IRF coverage A. Statement of Need requirements to remove the post- economy, productivity, competition, admission physician evaluation This final rule updates the IRF jobs, the environment, public health or requirement as discussed in section VIII. prospective payment rates for FY 2021 safety, or state, local or tribal of this final rule. as required under section 1886(j)(3)(C) governments or communities (also • We will amend the IRF coverage of the Act and in accordance with referred to as ‘‘economically requirements to codify existing section 1886(j)(5) of the Act, which significant’’); (2) creating a serious documentation instructions and requires the Secretary to publish in the inconsistency or otherwise interfering guidance as discussed in section IX. of Federal Register on or before the August with an action taken or planned by this final rule. 1 before each FY, the classification and another agency; (3) materially altering • We will amend the IRF coverage weighting factors for CMGs used under the budgetary impacts of entitlement requirements to allow non-physician the IRF PPS for such FY and a grants, user fees, or loan programs or the practitioners to conduct one of the three description of the methodology and data rights and obligations of recipients minimum required rehabilitation used in computing the prospective thereof; or (4) raising novel legal or physician visits every week of the IRF payment rates under the IRF PPS for policy issues arising out of legal stay, except for the first week, if that FY. This final rule also implements mandates, the President’s priorities, or permitted under state law, as discussed section 1886(j)(3)(C) of the Act, which the principles set forth in Executive in section X. of this final rule. requires the Secretary to apply a MFP Order 12866. • We will apply the reduction to the adjustment to the market basket increase A regulatory impact analysis (RIA) FY 2021 IRF increase factor for IRFs that factor for FY 2012 and subsequent years. must be prepared for major rules with fail to meet the quality reporting Furthermore, this final rule adopts economically significant effects ($100 requirements as discussed in section XI. policy changes under the statutory million or more in any 1 year). We of this final rule. discretion afforded to the Secretary estimate the total impact of the policy under section 1886(j) of the Act. We are updates described in this final rule by XV. Collection of Information finalizing our proposal to adopt more comparing the estimated payments in Requirements recent OMB statistical area delineations FY 2021 with those in FY 2020. This As discussed in section IX. of this and apply a 5 percent cap on any wage analysis results in an estimated $260 final rule, we are amending index decreases compared to FY 2020 in million increase for FY 2021 IRF PPS § 412.622(a)(4)(i)(B) and (D) to codify a budget neutral manner. We are also payments. We estimate that this

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48456 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

rulemaking is ‘‘economically percent. Also, we estimate a 3.2 percent regulations ‘‘shall, to the extent significant’’ as measured by the $100 overall impact for IRFs with a DSH permitted by law, be offset by the million threshold, and hence also a patient percentage of 0 percent and a 3.1 elimination of existing costs associated major rule under the Congressional percent overall impact for IRFs with a with at least two prior regulations.’’ It Review Act. Also, the rule has been DSH patient percentage greater than 20 has been determined that this final rule reviewed by OMB. Accordingly, we percent. As a result, we anticipate this is a transfer rule that does not impose have prepared an RIA that, to the best final rule will have a positive impact on more than de minimis costs and thus is of our ability, presents the costs and a substantial number of small entities. not a regulatory action for the purposes benefits of the rulemaking. MACs are not considered to be small of Executive Order 13771. entities. Individuals and states are not C. Anticipated Effects 2. Detailed Economic Analysis included in the definition of a small 1. Effects on IRFs entity. This final rule will update the IRF PPS rates contained in the FY 2020 IRF The RFA requires agencies to analyze In addition, section 1102(b) of the Act PPS final rule (84 FR 39054). options for regulatory relief of small requires us to prepare an RIA if a rule Specifically, this final rule will update entities, if a rule has a significant impact may have a significant impact on the the CMG relative weights and average on a substantial number of small operations of a substantial number of length of stay values, the wage index, entities. For purposes of the RFA, small small rural hospitals. This analysis must and the outlier threshold for high-cost entities include small businesses, conform to the provisions of section 604 of the RFA. For purposes of section cases. This final rule will apply a MFP nonprofit organizations, and small 1102(b) of the Act, we define a small adjustment to the FY 2021 IRF market governmental jurisdictions. Most IRFs rural hospital as a hospital that is basket increase factor in accordance and most other providers and suppliers located outside of a Metropolitan with section 1886(j)(3)(C)(ii)(I) of the are small entities, either by having Statistical Area and has fewer than 100 Act. In addition, it adopts more recent revenues of $8.0 million to $41.5 beds. As shown in Table 13, we estimate OMB statistical area delineations and million or less in any 1 year depending that the net revenue impact of this final applies a transition wage index under on industry classification, or by being rule on rural IRFs is to increase the IRF PPS. We are also amending the nonprofit organizations that are not estimated payments by approximately IRF coverage requirements to remove dominant in their markets. (For details, 3.0 percent based on the data of the 132 the post-admission physician evaluation see the Small Business Administration’s rural units and 11 rural hospitals in our requirement and codify existing final rule that set forth size standards for database of 1,118 IRFs for which data documentation instructions and health care industries, at 65 FR 69432 at were available. We estimate an overall guidance. https://www.sba.gov/sites/default/files/ impact for rural IRFs in all areas except We estimate that the impact of the 2019-08/SBA%20 Rural South Atlantic and Rural East changes and updates described in this Table%20of%20Size%20Standards_ final rule will be a net estimated _ South Central of between 3.0 percent Effective%20Aug%2019%2C%202019 and 5.0 percent. As a result, we increase of $260 million in payments to Rev.pdf, effective January 1, 2017 and anticipate this final rule would have a IRF providers. This estimate does not updated on August 19, 2019.) Because positive impact on a substantial number include the implementation of the we lack data on individual hospital of small rural hospitals. required 2 percentage point reduction of receipts, we cannot determine the Section 202 of the Unfunded the market basket increase factor for any number of small proprietary IRFs or the Mandates Reform Act of 1995 (Pub. L. IRF that fails to meet the IRF quality proportion of IRFs’ revenue that is 104–04, enacted on March 22, 1995) reporting requirements (as discussed in derived from Medicare payments. (UMRA) also requires that agencies section XI. of this final rule). The impact Therefore, we assume that all IRFs (an assess anticipated costs and benefits analysis in Table 13 of this final rule approximate total of 1,120 IRFs, of before issuing any rule whose mandates represents the projected effects of the which approximately 55 percent are require spending in any 1 year of $100 updates to IRF PPS payments for FY nonprofit facilities) are considered small million in 1995 dollars, updated 2021 compared with the estimated IRF entities and that Medicare payment annually for inflation. In 2020, that PPS payments in FY 2020. We constitutes the majority of their threshold is approximately $156 determine the effects by estimating revenues. HHS generally uses a revenue million. This final rule does not payments while holding all other impact of 3 to 5 percent as a significance mandate any requirements for State, payment variables constant. We use the threshold under the RFA. As shown in local, or tribal governments, or for the best data available, but we do not Table 13, we estimate that the net private sector. attempt to predict behavioral responses revenue impact of this final rule on all Executive Order 13132 establishes to these changes, and we do not make IRFs is to increase estimated payments certain requirements that an agency adjustments for future changes in such by approximately 2.8 percent. However, must meet when it issues a proposed variables as number of discharges or we find that certain categories of IRF rule (and subsequent final rule) that case-mix. providers will be expected to experience imposes substantial direct requirement We note that certain events may revenue impacts in the 3 to 5 percent costs on state and local governments, combine to limit the scope or accuracy range. We estimate a 3.0 percent overall preempts state law, or otherwise has of our impact analysis, because such an impact for rural IRFs. Additionally, we federalism implications. As stated, this analysis is future-oriented and, thus, estimate a 3.1 percent overall impact for final rule will not have a substantial susceptible to forecasting errors because teaching IRFs with a resident to average effect on state and local governments, of other changes in the forecasted daily census ratio of less than 10 preempt state law, or otherwise have a impact time period. Some examples percent, a 3.4 percent overall impact for federalism implication. could be legislative changes made by teaching IRFs with resident to average Executive Order 13771, titled the Congress to the Medicare program daily census ratio of 10 to 19 percent, Reducing Regulation and Controlling that would impact program funding, or and a 3.1 percent overall impact for Regulatory Costs, was issued on January changes specifically related to IRFs. teaching IRFs with a resident to average 30, 2017 and requires that the costs Although some of these changes may daily census ratio greater than 19 associated with significant new not necessarily be specific to the IRF

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48457

PPS, the nature of the Medicare program authority of section 1886(j)(2)(C)(i) of IRFs with zero DSH PP, IRFs with a is such that the changes may interact, the Act. DSH PP less than 5 percent, IRFs with and the complexity of the interaction of • The total change in estimated a DSH PP between 5 and less than 10 these changes could make it difficult to payments based on the FY 2021 percent, IRFs with a DSH PP between 10 predict accurately the full scope of the payment changes relative to the and 20 percent, and IRFs with a DSH PP impact upon IRFs. estimated FY 2020 payments. greater than 20 percent. In updating the rates for FY 2021, we 3. Description of Table 13 The estimated impacts of each policy are implementing standard annual described in this rule to the facility Table 13 shows the overall impact on revisions described in this final rule (for categories listed are shown in the the 1,118 IRFs included in the analysis. example, the update to the wage index columns of Table 13. The description of and market basket increase factor used The next 12 rows of Table 13 contain IRFs categorized according to their each column is as follows: to adjust the Federal rates). We are also • implementing a productivity adjustment geographic location, designation as Column (1) shows the facility to the FY 2021 IRF market basket either a freestanding hospital or a unit classification categories. increase factor in accordance with of a hospital, and by type of ownership; • Column (2) shows the number of section 1886(j)(3)(C)(ii)(I) of the Act. We all urban, which is further divided into IRFs in each category in our FY 2021 estimate the total increase in payments urban units of a hospital, urban analysis file. to IRFs in FY 2021, relative to FY 2020, freestanding hospitals, and by type of • Column (3) shows the number of would be approximately $260 million. ownership; and all rural, which is cases in each category in our FY 2021 This estimate is derived from the further divided into rural units of a analysis file. application of the FY 2021 IRF market hospital, rural freestanding hospitals, • and by type of ownership. There are 975 Column (4) shows the estimated basket increase factor, as reduced by a effect of the adjustment to the outlier productivity adjustment in accordance IRFs located in urban areas included in our analysis. Among these, there are 684 threshold amount. with section 1886(j)(3)(C)(ii)(I) of the • Act which yields an estimated increase IRF units of hospitals located in urban Column (5) shows the estimated in aggregate payments to IRFs of $220 areas and 291 freestanding IRF hospitals effect of the update to the IRF labor- million. Furthermore, there is an located in urban areas. There are 143 related share and wage index, in a additional estimated $40 million IRFs located in rural areas included in budget-neutral manner. increase in aggregate payments to IRFs our analysis. Among these, there are 132 • Column (6) shows the estimated due to the update to the outlier IRF units of hospitals located in rural effect of the revisions to the CBSA threshold amount. Therefore, summed areas and 11 freestanding IRF hospitals delineations and the transition wage together, we estimate that these updates located in rural areas. There are 394 for- index, in a budget-neutral manner. will result in a net increase in estimated profit IRFs. Among these, there are 361 • Column (7) shows the estimated payments of $260 million from FY 2020 IRFs in urban areas and 33 IRFs in rural effect of the update to the CMG relative to FY 2021. areas. There are 610 non-profit IRFs. weights and average LOS values, in a The effects of the updates that impact Among these, there are 521 urban IRFs budget-neutral manner. and 89 rural IRFs. There are 114 IRF PPS payment rates are shown in • Column (8) compares our estimates government-owned IRFs. Among these, Table 13. The following updates that of the payments per discharge, affect the IRF PPS payment rates are there are 93 urban IRFs and 21 rural IRFs. incorporating all of the policies discussed separately below: reflected in this final rule for FY 2021 • The effects of the update to the The remaining four parts of Table 13 to our estimates of payments per outlier threshold amount, from show IRFs grouped by their geographic discharge in FY 2020. approximately 2.6 percent to 3.0 percent location within a region, by teaching of total estimated payments for FY 2021, status, and by DSH patient percentage The average estimated increase for all consistent with section 1886(j)(4) of the (PP). First, IRFs located in urban areas IRFs is approximately 2.8 percent. This Act. are categorized for their location within estimated net increase includes the • The effects of the annual market a particular one of the nine Census effects of the IRF market basket increase basket update (using the IRF market geographic regions. Second, IRFs factor for FY 2021 of 2.4 percent, basket) to IRF PPS payment rates, as located in rural areas are categorized for reduced by a productivity adjustment of required by sections 1886(j)(3)(A)(i) and their location within a particular one of 0.0 percentage point in accordance with (j)(3)(C) of the Act, including a the nine Census geographic regions. In section 1886(j)(3)(C)(ii)(I) of the Act. It productivity adjustment in accordance some cases, especially for rural IRFs also includes the approximate 0.4 with section 1886(j)(3)(C)(i)(I) of the located in the New England, Mountain, percent overall increase in estimated Act. and Pacific regions, the number of IRFs IRF outlier payments from the update to • The effects of applying the budget- represented is small. IRFs are then the outlier threshold amount. Since we neutral labor-related share and wage grouped by teaching status, including are making the updates to the IRF wage index adjustment, as required under non-teaching IRFs, IRFs with an intern index, labor-related share and the CMG section 1886(j)(6) of the Act. and resident to average daily census relative weights in a budget-neutral • The effects of the budget neutral (ADC) ratio less than 10 percent, IRFs manner, they will not be expected to changes to the wage index due to the with an intern and resident to ADC ratio affect total estimated IRF payments in OMB delineation revisions and the greater than or equal to 10 percent and the aggregate. However, as described in transition wage index policy. less than or equal to 19 percent, and more detail in each section, they will be • The effects of the budget-neutral IRFs with an intern and resident to ADC expected to affect the estimated changes to the CMG relative weights ratio greater than 19 percent. Finally, distribution of payments among and average LOS values under the IRFs are grouped by DSH PP, including providers.

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48458 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

TABLE 13—IRF IMPACT TABLE FOR FY 2021 [Columns 4 through 8 in percentage]

FY 21 FY 21 wage Number Number wage index new CMG Total Facility classification of IRFs of cases Outlier index and CBSA and weights percent 1 labor share 5% cap change

(1) (2) (3) (4) (5) (6) (7) (8)

Total ...... 1,118 410,883 0.4 0.0 0.0 0.0 2.8 Urban unit...... 684 161,642 0.7 0.1 0.0 0.0 3.2 Rural unit...... 132 20,758 0.7 0.0 0.1 0.0 3.2 Urban hospital...... 291 223,421 0.2 0.0 0.0 0.0 2.5 Rural hospital ...... 11 5,062 0.0 0.0 ¥0.2 0.0 2.2 Urban For-Profit...... 361 218,350 0.2 0.0 0.0 0.0 2.5 Rural For-Profit...... 33 8,487 0.3 0.0 0.0 0.0 2.6 Urban Non-Profit...... 521 145,259 0.7 0.1 0.0 0.0 3.2 Rural Non-Profit...... 89 14,171 0.8 0.0 0.0 0.0 3.2 Urban Government ...... 93 21,454 0.7 ¥0.1 0.2 0.0 3.2 Rural Government...... 21 3,162 0.4 0.0 0.0 0.1 3.0 Urban ...... 975 385,063 0.4 0.0 0.0 0.0 2.8 Rural ...... 143 25,820 0.6 0.0 0.0 0.0 3.0 Urban by region: Urban New England ...... 29 16,117 0.4 ¥0.6 0.0 ¥0.1 2.1 Urban Middle Atlantic ...... 132 48,820 0.5 0.4 ¥0.3 0.1 3.0 Urban South Atlantic...... 153 78,375 0.3 0.1 0.0 0.0 2.8 Urban East North Central...... 159 50,217 0.5 0.2 0.0 0.0 3.1 Urban East South Central...... 56 28,428 0.2 0.1 0.0 0.0 2.6 Urban West North Central ...... 73 21,136 0.5 ¥0.6 0.0 0.0 2.1 Urban West South Central...... 188 85,336 0.3 0.1 0.1 0.1 3.0 Urban Mountain ...... 87 30,648 0.4 ¥0.4 0.0 ¥0.1 2.3 Urban Pacific ...... 98 25,986 0.8 ¥0.3 0.3 ¥0.1 3.2 Rural by region: Rural New England ...... 5 1,347 0.5 0.6 0.0 ¥0.2 3.3 Rural Middle Atlantic...... 11 1,189 1.1 0.4 0.0 0.0 4.0 Rural South Atlantic ...... 16 3,796 0.4 ¥0.3 ¥0.3 0.0 2.2 Rural East North Central...... 23 4,068 0.5 0.4 0.1 0.0 3.4 Rural East South Central ...... 21 4,442 0.3 0.0 0.0 ¥0.1 2.6 Rural West North Central ...... 20 3,047 0.8 ¥0.1 0.2 0.0 3.2 Rural West South Central ...... 39 7,005 0.5 ¥0.2 0.1 0.2 3.0 Rural Mountain ...... 5 563 1.2 ¥0.2 0.0 0.1 3.5 Rural Pacific...... 3 363 1.8 0.7 0.0 0.0 5.0 Teaching status: Non-teaching ...... 1,012 363,781 0.4 0.0 0.0 0.0 2.8 Resident to ADC less than 10% ...... 60 32,585 0.5 0.0 0.2 0.0 3.1 Resident to ADC 10%–19% ...... 34 12,988 0.8 0.3 ¥0.1 0.1 3.4 Resident to ADC greater than 19% .. 12 1,529 0.4 0.1 0.2 0.1 3.1 Disproportionate share patient percent- age (DSH PP): DSH PP = 0%...... 33 4,715 0.6 0.2 0.0 0.0 3.2 DSH PP <5% ...... 142 60,645 0.3 0.1 ¥0.3 0.0 2.5 DSH PP 5%–10% ...... 294 127,295 0.3 0.1 ¥0.1 0.0 2.8 DSH PP 10%–20% ...... 393 147,404 0.4 ¥0.1 0.1 0.0 2.8 DSH PP greater than 20% ...... 256 70,824 0.6 ¥0.1 0.1 0.0 3.1 1 This column includes the impact of the updates in columns (4), (5), (6), and (7) above, and of the IRF market basket update for FY 2021 (2.4 percent), reduced by 0.0 percentage point for the productivity adjustment as required by section 1886(j)(3)(C)(ii)(I) of the Act.

4. Impact of the Update to the Outlier For the FY 2021 IRF PPS proposed continue to estimate that IRF outlier Threshold Amount rule, we used preliminary FY 2019 IRF payments as a percentage of total claims data, and, based on that estimated IRF payments are 2.6 percent The estimated effects of the update to preliminary analysis, we estimated that in FY 2021. Thus, we are adjusting the the outlier threshold adjustment are IRF outlier payments as a percentage of outlier threshold amount in this final presented in column 4 of Table 13. In total estimated IRF payments would be rule to maintain total estimated outlier the FY 2020 IRF PPS final rule (84 FR 2.6 percent in FY 2020. As we typically payments equal to 3 percent of total 39095 through 39097), we used FY 2018 do between the proposed and final rules estimated payments in FY 2021. The IRF claims data (the best, most complete each year, we updated our FY 2019 IRF estimated change in total IRF payments data available at that time) to set the claims data to ensure that we are using for FY 2021, therefore, includes an outlier threshold amount for FY 2020 so the most recent available data in setting approximate 0.4 percent increase in that estimated outlier payments will IRF payments. Therefore, based on payments because the estimated outlier equal 3 percent of total estimated updated analysis of the most recent IRF portion of total payments is estimated to payments for FY 2020. claims data for this final rule, we

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48459

increase from approximately 2.6 percent for all IRF discharges beginning on or Bureau of Labor Statistics for a nurse to 3 percent. after October 1, 2020. practitioner and a physician’s assistant, The impact of this outlier adjustment We do not estimate that there will be as E.O. 13890 specifically identifies update (as shown in column 4 of Table a cost savings associated with our both of these practitioners, which is 13) is to increase estimated overall removal of the post-admission physician $53.50. The hourly wage rate including payments to IRFs by 0.4 percent. evaluation, as discussed in section VIII. fringe benefits and overhead is $107.00. of this final rule. While we are removing We estimate that the required face-to- 5. Impact of the Wage Index and Labor- the post-admission physician face physician visits at Related Share requirement at § 412.622(a)(4)(ii), we are § 412.622(a)(3)(iv) take, on average, 30 In column 5 of Table 13, we present not removing any of the required face- minutes each to complete. In FY 2019, the effects of the budget-neutral update to-face visits in § 412.622(a)(3)(iv). we estimate that there were of the wage index and labor-related Thus, the rehabilitation physician or approximately 1,117 total IRFs and on share. The changes to the wage index non-physician practitioners, as average 366 discharges per IRF and the labor-related share are described in section X. of this final rule, annually. A patient’s average length of discussed together because the wage will still be required to conduct face-to- stay in an IRF is 13 days. Therefore, we index is applied to the labor-related face visits with the patient at least 3 can estimate that on average, each share portion of payments, so the days per week throughout the patient’s patient receives at least six physician changes in the two have a combined stay in the IRF. Since this change does visits during their IRF admission. If effect on payments to providers. As not decrease the amount of times the each IRF has approximately 366 patients discussed in section VI.C. of this final physician is required to visit and assess per year, and on average each patient rule, we are updating the labor-related the patient, we do not estimate any cost receives at least six face-to-face visits share from 72.7 percent in FY 2020 to savings to the IRF with this change. with a rehabilitation physician that take 73.0 percent in FY 2021. an estimated 30 minutes each, annually 9. Effects of the Amendment To Allow the rehabilitation physician spends an Non-Physician Practitioners To Perform 6. Impact of the Revisions to the OMB estimated 1098 hours (366 patients × 6 Some of the Weekly Visits That Are Delineations and the 5 Percent Cap visits × 0.5 hours) completing the Currently Required To Be Performed by Transition Policy required face-to-face physician visits. a Rehabilitation Physician In column 6 of Table 13, we present Allowing a non-physician practitioner the effects of the budget-neutral update As discussed in section X. of this final to complete one of the required face-to- of the geographic labor-market area rule, we are amending the regulations at face visits for each patient beginning designations under the IRF PPS and the § 412.622(a)(3)(iv) to allow, beginning with the patient’s second week of application of the 5 percent cap on any with the second week of admission to admission and estimating the patient’s decrease in an IRF’s wage index for FY the IRF, a non-physician practitioner average length of stay is 13 days, we 2021 from the prior FY. As discussed in who is determined by the IRF to have estimate a reduction of 183 hours for section VI.D.2. of this final rule, we are specialized training and experience in rehabilitation physicians per IRF implementing the new OMB inpatient rehabilitation to conduct 1 of annually (366 patients × 0.5 hours). We delineations as described in the the 3 required face-to-face visits with estimate a reduction of 204,411 hours September 14, 2018 OMB Bulletin No. the patient per week, provided that such for rehabilitation physicians across all 18–04, effective beginning with the FY duties are within the non-physician IRFs annually (1,117 IRFs × 183 hours). 2021 IRF PPS wage index. Additionally, practitioner’s scope of practice under To estimate the total cost savings per as discussed in section VI.D.3. of this applicable state law. We believe this IRF annually, assuming the IRF was able final rule, we are applying a 5 percent final rule represents a decrease in and willing to take full advantage of this cap on any decrease in an IRF’s wage administrative burden to rehabilitation regulatory provision, we multiply 183 index from the prior FY to help mitigate physicians and providers beginning in hours by $200.00 (average physician’s any significant negative impacts that FY 2021, that is, for all IRF discharges salary doubled to account for fringe and IRFs may experience due to our on or after October 1, 2020. We estimate overhead costs) which equals $36,600. adoption of the revised OMB the cost savings associated with this We then multiply 183 hours by $107.00 delineations under the IRF PPS. change in the following way. (average non-physician practitioners The requirement at § 412.622(a)(3)(iv) salary doubled to account for fringe and 7. Impact of the Update to the CMG must currently be fulfilled by a overhead costs) which equals $19,581. Relative Weights and Average LOS rehabilitation physician; therefore, to The total estimated cost savings per IRF Values estimate the burden reduction of these is $17,019 ($36,600¥$19,581). In column 7 of Table 13, we present changes, we obtained the hourly wage Therefore, we can estimate the total cost the effects of the budget-neutral update rate for a physician (there was not a savings across all IRFs annually for non- of the CMG relative weights and average specific wage rate for a rehabilitation physician practitioners to conduct one LOS values. In the aggregate, we do not physician) from the Bureau of Labor of the 3 required face-to-face visits in a estimate that these updates will affect Statistics (http://www.bls.gov/ooh/ patient’s average length of stay of 13 overall estimated payments of IRFs. healthcare/home.htm), which is days would be $1.9 million ($17,019 × However, we do expect these updates to $100.00. The hourly wage rate including 1,117). have small distributional effects. fringe benefits and overhead is $200.00. Please note that the $1.9 million in We also obtained the average hourly burden reduction described above will 8. Effects of the Removal of the Post- wage rate for a non-physician not solely be savings to the Medicare Admission Physician Evaluation practitioner. As discussed in section X. Trust Fund. We note that all of the cost As discussed in section VIII. of this of this final rule, we defer to each state’s savings reflected in this estimate will final rule, we are removing scope of practice in determining who is occur on the Medicare Part B side, in § 412.622(a)(4)(ii) that requires an IRF to recognized as a non-physician the form of reduced Part B payments to complete a post-admission physician practitioner; however, for the purposes physicians under the Medicare evaluation for all patients admitted to of this burden reduction estimation, we Physician Fee Schedule (MPFS). the IRF, beginning with FY 2021, that is, used a combined average wage from the Physician services provided in an IRF

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48460 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

are billed directly to Part B; therefore, that on average each year physicians are • How many IRFs would substitute IRFs do not pay physicians for their billing $179 million for these services non-physician practitioners for services. Therefore, the Medicare Trust ($439.56 × 366 patients × 1117 IRFs). physicians; and Fund will be saving 80 percent of the For the purposes of this estimation, if • Among the IRFs that do substitute overall cost savings and 20 percent of we allow non-physician practitioners to non-physician practitioners for the savings will be to beneficiaries due conduct one of the three face-to-face physicians, whether it will be for all to the coinsurance requirement visits beginning with the second week requirements or only for specific generally applicable to Medicare Part B during a patient’s admission with an requirements. services. We estimate that if 100 percent average length of stay of 13 days, the We did not receive any comments of IRFs allowed non-physician rehabilitation would complete only 5 regarding this request for feedback. practitioners to fulfill some of the face-to-face visits during the patient’s Therefore, we are finalizing our requirement at § 412.622(a)(3)(iv) the IRF admission. Therefore, the estimated projected savings for the portion of the overall savings to Medicare Part B total that a physician would bill per IRF proposal that we are finalizing. In the would be $1.5 million. However, we are patient for 5 face-to-face visits is absence of specific information on unsure if all IRFs will adopt this change. $366.30 ($73.26 × 5 visits). We estimate which to base a specific estimate of how We are estimating that IRFs will adopt that on average each year physicians much IRFs would be expected to this change for about 50 percent of the across all IRFs are billing $149 million substitute non-physician practitioners services provided. Therefore, we for these services ($366.30 × 366 for one of the required physician visits estimate that the overall savings to the patients × 1,117 IRFs). at § 412.622(a)(3)(iv) beginning the Medicare Trust Fund for allowing non- According to the Medicare Benefit second week of the patient’s admission, physician practitioners to fulfill some of Policy Manual, chapter 15, section 80 we are assuming that IRFs will adopt this change about 50 percent of the time. the requirement at § 412.622(a)(3)(iv) (Pub. L. 100–02), as well as, the IRF PPS Thus, the estimated overall savings to would be $750,000. website (https://www.cms.gov/ Medicare Part B will be $3 million. We We have also estimated the impacts of Regulations-and-Guidance/Guidance/ are estimating that 80 percent of that this change using the MPFS regarding Manuals/Downloads/bp102c15.pdf), will remain in the Medicare Trust Fund what a physician would bill for these non-physician practitioners are able to and 20 percent will be a savings to services versus what a non-physician bill 80 percent of what physicians bill. beneficiaries. Therefore, we estimate practitioner would bill. The MPFS Therefore, we estimate that on average $2.4 million in savings to the Medicare provides more than 10,000 physician non-physician practitioners will bill services, the associated relative value program and $600,000 in savings to $58.61 per face-to-face visit. Per IRF units, a fee schedule state indicator and beneficiaries. patient with an average length of stay of various payment policy indicators 13 days, the non-physician practitioner D. Alternatives Considered needed for payment adjustment. The will bill an estimated $58.61. Therefore, MPFS pricing amounts are adjusted to The following is a discussion of the we estimate that on average each year a reflect the variation in practice costs alternatives considered for the IRF PPS non-physician practitioner will bill $24 from area to area. For additional updates contained in this final rule. million for these services ($58.61 × 366 information regarding how to use the Section 1886(j)(3)(C) of the Act × 1,117). MPFS please visit the website at https:// requires the Secretary to update the IRF www.cms.gov/apps/physician-fee- We estimate that if 100 percent of PPS payment rates by an increase factor schedule/search/search-criteria.aspx. IRFs allowed non-physician that reflects changes over time in the The face-to-face physician visits are practitioners to fulfill some of the prices of an appropriate mix of goods considered separately payable services requirement at § 412.622(a)(3)(iv) the and services included in the covered for physicians. Therefore, we can use overall savings to Medicare Part B IRF services. the active pricing paid in calendar year would be $6 million. However, we are As noted previously in this final rule, 2020 for a national base payment. unsure that IRFs will adopt this change. section 1886(j)(3)(C)(ii)(I) of the Act There are different evaluation and Commenters suggested that states do not requires the Secretary to apply a management codes depending on the have scope of practice laws that are IRF productivity adjustment to the market complexity of the patient and the specific and at least as focused on the basket increase factor for FY 2021. Thus, duration of the visit. The current clinical training as necessitated through in accordance with section 1886(j)(3)(C) evaluation and management codes for CMS requirements for a physician to of the Act, we update the IRF the face-to-face visit in a facility are practice in an IRF. States have prospective payments in this final rule 99231 ($40.06), 99232 ($73.62), or 99233 developed scope of practice laws by 2.4 percent (which equals the 2.4 ($106.10). Therefore, we estimate that around acute care hospitals, rather than percent estimated IRF market basket the average national pricing which is a IRFs specifically, to allow NPPs to increase factor for FY 2021 reduced by standard reference payment amount for perform visits to admitted patients. a 0.0 percentage point productivity the physicians without geographic Also, since the average length of stay for adjustment as determined under section adjustment for one of the face-to-face an IRF patient is 13 days, there would 1886(b)(3)(B)(xi)(II) of the Act (as visits in a facility is $73.26. During a be limited opportunities for the NPP required by section 1886(j)(3)(C)(ii)(I) of patient’s average length of stay of 13 visit to occur. Considering the broad the Act)). days, the rehabilitation physician is permissibility under scope of practice We considered maintaining the currently required to see the patient a laws and average length of stays, we felt existing CMG relative weights and minimum of six times. The current it was appropriate to pick a midpoint in average length of stay values for FY estimated total that physicians are formulating our estimation. Therefore, 2021. However, in light of recently currently billing per IRF patient for 6 we are estimating that IRFs will adopt available data and our desire to ensure face-to-face visits is $439.56 ($73.26 × 6 this change 50 percent of the time. To that the CMG relative weights and visits). In FY 2019, we estimate that obtain more information on which to average length of stay values are as there were approximately 1,117 total base our estimates, we solicited reflective as possible of recent changes IRFs and on average 366 discharges per feedback from commenters to in IRF utilization and case mix, we IRF annually. Therefore, we estimate determine: believe that it is appropriate to update

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48461

the CMG relative weights and average to allow the effects of our policies to be provided that such duties are within the length of stay values at this time to phased in over 2 years. non-physician practitioner’s scope of ensure that IRF PPS payments continue We considered maintaining the practice under applicable state law. to reflect as accurately as possible the existing outlier threshold amount for FY However, we believe that it is critical, current costs of care in IRFs. 2021. However, analysis of updated FY especially in light of the significant We considered not implementing the 2019 data indicates that estimated changes in health care that have new OMB delineations for purposes of outlier payments would be less than 3 occurred as a result of the PHE for the calculating the wage index under the percent of total estimated payments for COVID–19 pandemic, for Medicare to IRF PPS; however, we believe FY 2021, by approximately 0.4 percent, recognize and expand the valuable role implementing the new OMB unless we updated the outlier threshold that non-physician practitioners play in delineations will result in wage index amount. Consequently, we are adjusting assisting the rehabilitation physicians in values being more representative of the the outlier threshold amount in this implementing patients’ plan of care in actual costs of labor in a given area. final rule to reflect a 0.4 percent the IRF. We intend to monitor the We considered having no transition increase thereby setting the total outlier quality of care in IRFs closely to ensure period and fully implementing the payments equal to 3 percent, instead of that the regulatory changes we are revisions to the OMB delineations as 2.6 percent, of aggregate estimated implementing improve care provided to described in section VI.D. of this final payments in FY 2021. vulnerable IRF patients. rule. However, this would not provide We considered not removing the post- In addition, we considered amending any time for IRF providers to adapt to admission physician evaluation § 412.622(a)(3), (4), and (5) to allow non- their new wage index values. Thus, we requirement at § 412.622(a)(3)(iv). physician practitioners to perform all of believe that it is appropriate to provide However, we believe that IRFs are more the IRF coverage requirements that are for a transition period to mitigate any than capable of determining whether a currently required to be performed by significant decreases in wage index patient meets the coverage criteria for rehabilitation physicians, provided that values and to provide time for IRFs to IRF services prior to admission. these duties are within the practitioner’s adjust to their new labor market area Additionally, we believe that if IRFs are scope of practice under applicable state delineations. doing their due diligence while law. However, as discussed in section X. We considered using a blended wage completing the pre-admission screening of this final rule, we received many index for all providers that would be by making sure each IRF candidate comments from stakeholders expressing computed using 50 percent of the FY meets all of the requirements to be significant concerns about the quality of 2021 IRF PPS wage index values under admitted to the IRF, then the post- care that the vulnerable IRF patients the FY 2020 CBSA delineations and 50 admission physician evaluation is would receive if we no longer required percent of the FY 2021 IRF PPS wage unnecessary. the rehabilitation physician to lead the index values under the FY 2021 OMB We considered not amending care of the patients. Thus, we delineations as was utilized in FY 2016 § 412.622(a)(4)(i)(B) and (D) to codify determined that it would be prudent to when we adopted the new CBSA our longstanding documentation finalize only a portion of the proposed delineations based on the 2010 instructions and guidance of the policy at this time. Based on extensive decennial census. However, the preadmission screening in regulation clinical input by CMS’s medical officers revisions to the CBSA delineations text. However, we believe for the ease of and after careful consideration of these announced in the latest OMB bulletin administrative burden and being able to issues, we believe that the measured are not based on new census data; they locate the required elements of the approach that we are finalizing in this are updates of the CBSA delineations preadmission screening documentation final rule balances the commenters’ adopted in FY 2016 based on the 2010 and the review and concurrence of a concerns about maintaining the census data. As such, we do not believe rehabilitation physician prior to the IRF rehabilitation physician at the core of it is necessary to implement the admission needed for the basis of IRF the patient’s plan of care in the IRF with multifaceted 50/50 blended wage index payment in a timely fashion, we are the benefits of expanding the role of transition that we established for the should make the technical codifications non-physician practitioners, who play adoption of the new OMB delineations in regulation text. Additionally, we an important role in the based on the decennial census data in considered codifying all of our interdisciplinary team and the care of FY 2016. longstanding required elements of the complex patients. We considered transitioning the wage pre-admission screening index to the revised OMB delineations documentation. However, as discussed E. Regulatory Review Costs over a number of years to minimize the in section IX. of this final rule, we If regulations impose administrative impact of the wage index changes in a believe that removing some of the pre- costs on private entities, such as the given year. However, we also believe admission screening elements that were time needed to read and interpret this this must be balanced against the need duplicative of data collected in various final rule, we should estimate the cost to ensure the most accurate payments other documents in the patient’s IRF associated with regulatory review. Due possible, which argues for a faster medical record (such as the history and to the uncertainty involved with transition to the revised OMB physical and the individualized overall accurately quantifying the number of delineations. As discussed above in plan of care) would reduce provider entities that will review the rule, we section VI.D. of this final rule, we burden. assume that the total number of unique believe that using the most current OMB We considered not amending commenters on the FY 2021 IRF PPS delineations will increase the integrity §§ 412.622(a)(3)(iv) and 412.29(e) to proposed rule will be the number of of the IRF PPS wage index by creating allow, beginning with the second week reviewers of this final rule. We a more accurate representation of of admission to the IRF, a non-physician acknowledge that this assumption may geographic variation in wage levels. As practitioner who is determined by the understate or overstate the costs of such, we believe it will be appropriate IRF to have specialized training and reviewing this final rule. It is possible to utilize a 5 percent cap on any experience in inpatient rehabilitation to that not all commenters reviewed the decrease in an IRF’s wage index from conduct 1 of the 3 required face-to-face FY 2021 IRF PPS proposed rule in the IRF’s final wage index in FY 2020 visits with the patient per week, detail, and it is also possible that some

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 48462 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations

reviewers chose not to comment on the managers (Code 11–9111), we estimate F. Accounting Statement and Table proposed rule. For these reasons we that the cost of reviewing this rule is thought that the number of past $110.74 per hour, including overhead As required by OMB Circular A–4 commenters would be a fair estimate of and fringe benefits (https://www.bls.gov/ (available at https:// the number of reviewers of this final oes/current/oes_nat.htm). Assuming an www.whitehouse.gov/sites/ rule. average reading speed, we estimate that whitehouse.gov/files/omb/circulars/A4/ a-4.pdf), in Table 14, we have prepared We also recognize that different types it would take approximately 2 hours for an accounting statement showing the of entities are in many cases affected by the staff to review half of this final rule. mutually exclusive sections of this final classification of the expenditures For each IRF that reviews the rule, the rule, and therefore, for the purposes of associated with the provisions of this estimated cost is $221.48 (2 hours × our estimate we assume that each final rule. Table 14 provides our best reviewer reads approximately 50 $110.74). Therefore, we estimate that estimate of the increase in Medicare the total cost of reviewing this payments under the IRF PPS as a result percent of the rule. We sought × comments on this assumption. regulation is $590,908.64 ($221.48 of the updates presented in this final Using the wage information from the 2,668 reviewers). rule based on the data for 1,118 IRFs in BLS for medical and health service our database.

TABLE 14—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURE

Category Transfers Change in estimated transfers from FY 2020 Annualized monetized transfers $260 million IRF PPS to FY 2021 IRF PPS Federal government to IRF Medicare From whom to whom? providers

Change in Estimated Costs:

Category Costs

Annualized monetized cost in FY 2021 for IRFs due to the amendment of certain IRF coverage Reduction of ≤ $3 million. requirements

G. Conclusion Puerto Rico, Reporting and as well as to modify the course of recordkeeping requirements. treatment as needed to maximize the Overall, the estimated payments per patient’s capacity to benefit from the discharge for IRFs in FY 2021 are For the reasons set forth in the preamble, the Centers for Medicare & rehabilitation process except that during projected to increase by 2.8 percent, the Public Health Emergency, as defined compared with the estimated payments Medicaid Services amends 42 CFR chapter IV as set forth below: in § 400.200 of this chapter, for the in FY 2020, as reflected in column 8 of COVID–19 pandemic such visits may be Table 13. PART 412—PROSPECTIVE PAYMENT conducted using telehealth services (as IRF payments per discharge are SYSTEMS FOR INPATIENT HOSPITAL defined in section 1834(m)(4)(F) of the estimated to increase by 2.8 percent in SERVICES Act). Beginning with the second week, urban areas and 3.0 percent in rural as defined in § 412.622, of admission to areas, compared with estimated FY 2020 ■ 1. The authority citation for part 412 the IRF, a non-physician practitioner payments. Payments per discharge to continues to read as follows: who is determined by the IRF to have rehabilitation units are estimated to Authority: 42 U.S.C. 1302 and 1395hh. specialized training and experience in increase 3.2 percent in urban areas and inpatient rehabilitation may conduct 1 ■ 3.2 percent in rural areas. Payments per 2. Section 412.29 is amended by of the 3 required face-to-face visits with discharge to freestanding rehabilitation revising paragraph (e) to read as follows: the patient per week, provided that such hospitals are estimated to increase 2.5 § 412.29 Classification criteria for payment duties are within the non-physician percent in urban areas and increase 2.2 under the inpatient rehabilitation facility practitioner’s scope of practice under percent in rural areas. prospective payment system. applicable state law. Overall, IRFs are estimated to * * * * * * * * * * experience a net increase in payments (e) Except for care furnished to ■ 3. Section 412.622 is amended— as a result of the proposed policies in patients in a freestanding IRF hospital ■ a. By revising paragraphs (a)(3)(ii) and this final rule. The largest payment solely to relieve acute care hospital (iv) and (a)(4)(i)(B) and (D); increase is estimated to be a 5.0 percent capacity in a state (or region, as ■ b. By removing paragraph (a)(4)(ii); increase for rural IRFs located in the applicable) that is experiencing a surge, ■ c. By redesignating paragraph Pacific region. The analysis above, as defined in § 412.622, during the (a)(4)(iii) as paragraph (a)(4)(ii); and together with the remainder of this Public Health Emergency, as defined in ■ d. In paragraph (c) by adding the preamble, provides an RIA. § 400.200 of this chapter, have in effect definition of ‘‘Week’’ in alphabetical In accordance with the provisions of a procedure to ensure that patients order. Executive Order 12866, this regulation receive close medical supervision, as The revisions and addition read as was reviewed by OMB. evidenced by at least 3 face-to-face visits follows: List of Subjects in 42 CFR Part 412 per week by a licensed physician with specialized training and experience in § 412.622 Basis of payment. Administrative practice and inpatient rehabilitation to assess the (a) * * * procedure, Health facilities, Medicare, patient both medically and functionally, (3) * * *

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3 Federal Register / Vol. 85, No. 154 / Monday, August 10, 2020 / Rules and Regulations 48463

(ii) Except during the emergency defined in § 400.200 of this chapter, to the patient’s need for intensive period described in section requires physician supervision by a rehabilitation therapy, expected level of 1135(g)(1)(B) of the Act, generally rehabilitation physician. The improvement, and the expected length requires and can reasonably be expected requirement for medical supervision of time necessary to achieve that level to actively participate in, and benefit means that the rehabilitation physician of improvement; an evaluation of the from, an intensive rehabilitation therapy must conduct face-to-face visits with the patient’s risk for clinical complications; program. Under current industry patient at least 3 days per week the conditions that caused the need for standards, this intensive rehabilitation throughout the patient’s stay in the IRF rehabilitation; the treatments needed therapy program generally consists of at to assess the patient both medically and (that is, physical therapy, occupational least 3 hours of therapy (physical functionally, as well as to modify the therapy, speech-language pathology, or therapy, occupational therapy, speech- course of treatment as needed to prosthetics/orthotics); and anticipated language pathology, or prosthetics/ maximize the patient’s capacity to discharge destination. orthotics therapy) per day at least 5 days benefit from the rehabilitation process, * * * * * per week. In certain well-documented except that during a Public Health (D) It is used to inform a rehabilitation cases, this intensive rehabilitation Emergency, as defined in § 400.200 of physician who reviews and documents therapy program might instead consist this chapter, such visits may be his or her concurrence with the findings of at least 15 hours of intensive conducted using telehealth services (as and results of the preadmission rehabilitation therapy per week. Benefit defined in section 1834(m)(4)(F) of the screening prior to the IRF admission. from this intensive rehabilitation Act). Beginning with the second week of * * * * * therapy program is demonstrated by admission to the IRF, a non-physician (c) * * * measurable improvement that will be of practitioner who is determined by the practical value to the patient in IRF to have specialized training and Week means a period of 7 consecutive improving the patient’s functional experience in inpatient rehabilitation calendar days beginning with the date of capacity or adaptation to impairments. may conduct 1 of the 3 required face-to- admission to the IRF. The required therapy treatments must face visits with the patient per week, Dated: July 23, 2020. begin within 36 hours from midnight of provided that such duties are within the Seema Verma, the day of admission to the IRF. non-physician practitioner’s scope of Administrator, Centers for Medicare & * * * * * practice under applicable state law. Medicaid Services. (4) * * * (iv) Except for care furnished to (i) * * * Dated: July 29, 2020. patients in a freestanding IRF hospital (B) It includes a detailed and Alex M. Azar II, solely to relieve acute care hospital comprehensive review of each patient’s Secretary, Department of Health and Human capacity in a state (or region, as condition and medical history, Services. applicable) that is experiencing a surge including the patient’s level of function [FR Doc. 2020–17209 Filed 8–4–20; 4:15 pm] during the Public Health Emergency, as prior to the event or condition that led BILLING CODE 4120–01–P

VerDate Sep<11>2014 22:13 Aug 07, 2020 Jkt 250001 PO 00000 Frm 00041 Fmt 4701 Sfmt 9990 E:\FR\FM\10AUR3.SGM 10AUR3 jbell on DSKJLSW7X2PROD with RULES3