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Chris Cusimano Apr 7, 2026 5:05:33 PM < 1 min read

CMS 2027 Inpatient Rehabilitation Facility (IRF) Proposed Rule

On April 6, 2026 CMS released the FY 2027 IRF Proposed Rule with a modest +2.4% net payment update. The real story are operational changes and signals about where reimbursement is heading.

Payment Update = +3.2% market basket update with -.8% productivity adjustment. (~$355M total impact of the net +2.4%)

Operational Changes =
  • Therapies must begin within 36 hours
  • New preadmission documentation of current functional status
  • IDT meetings by Day 4 of admission

Financial Implications =
  • Continued phase-out of rural adjustment
  • Lower outlier threshold at $8,689 from $10,141 in FY 2026

Signals =
  • Future payment reform- Potential shift toward Skilled Nursing Facility Patient Driven Payment Model (PDPM) style diagnosis-driven reimbursement
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Chris Cusimano

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