CMS finalizes 3% payment update for IRFs in FY 2025; update amounts to $300 million, including adjustments for market basket and productivity, outlier threshold decreases payments by $20 million

The Centers for Medicare & Medicaid Services July 31 released the fiscal year 2025 final rule for inpatient rehabilitation facilities, which will update IRF payments by an estimated 3% overall (or $300 million) in FY 2025. This includes a 3.5% market basket update, which is reduced by a 0.5 percentage point cut for productivity. However, IRF payments will be further decreased by an estimated 0.2% ($20 million) due to the updated outlier threshold. 

While CMS did not propose to adopt or remove any quality measures from the IRF Quality Reporting Program, the agency finalized its proposal to adopt and modify certain patient assessment items related to health-related social needs; IRFs will be required to collect and report specific data elements related to living situation, food and utilities beginning with the FY 2028 IRF QRP.

AHA members will receive a Special Bulletin with more details.