Article
Inpatient rehabilitation
The IRF proposal, released April 3, would raise rates 2.4%, a 3.2% market basket increase less a 0.8-point productivity adjustment. CMS estimates IRF payments would rise $355 million in fiscal 2027.
The operational changes deserve more attention than the rate. CMS would require therapy treatment or evaluation to begin within 36 hours of midnight on the day of admission. It would also require documentation of current functional status in the preadmission screening and set requirements for the first interdisciplinary team meeting. Fiscal 2027 is the final year of the phaseout of the 14.9% rural adjustment for IRFs that moved from rural to urban status. CMS is also seeking input on future IRF payment reform and other wage index data sources.
Inpatient psychiatric facilities
The IPF proposal would raise rates 2.3%, a 3.1% market basket increase less the 0.8-point productivity adjustment, adding about $50 million. The per diem base rate would rise from $892.87 to $912.58.
Two other provisions stand out. CMS would cap outlier payments at 20% of a facility’s total IPF payments in a year, which would matter most for units that rely heavily on outlier payments. It would also put in place a standardized IPF patient assessment instrument, required by the Consolidated Appropriations Act of 2023, beginning with fiscal 2028. Two quality measures would be removed: alcohol use brief intervention and tobacco use treatment at discharge.
What unit leaders should do
- Test therapy coverage. Map admission days and times against therapist schedules. Friday and Saturday admissions are where a 36-hour rule is most likely to strain staffing.
- Size outlier exposure. Psychiatric units should calculate what share of payment comes from outliers and whether the cap would bind.
- Plan the assessment build. A new standardized instrument means EHR changes, training and data validation. Starting now leaves time for testing.
- Comment by June 1. Operational detail from hospital-based units helps CMS understand real-world effects.
Hospital-based rehab and psychiatric units often run on thin margins inside larger systems. Small rule changes can decide whether they remain viable.
Archive entry for Apr 8, 2026, added Nov. 11, 2026.