CHA News

CMS Issues Final FFY 2023 Inpatient Rehabilitation, Psychiatric PPS, and Hospice Wage Index Rules

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On July 27, the Centers for Medicare & Medicaid Services (CMS) issued final rules updating the Medicare payment policies and rates for inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs), and hospice facilities for federal fiscal year (FFY) 2023. These regulations are effective Oct. 1.

Key provisions of each rule include: 


  • Updates IRF prospective payment system (PPS) rates by 3.9% with estimated overall payments to increase by 3.2% after productivity and outlier adjustments 
  • Applies a permanent 5% cap on annual wage index decreases 
  • Expands quality data reporting on all IRF patients, regardless of payer. In response to comments from CHA, CMS will delay expanded quality data collection requirements for one year, until Oct. 1, 2024. 


  • Updates payment rates by 3.8% with estimated payments to increase by 2.5% after productivity adjustment 
  • Applies a permanent 5% cap on wage index decreases 

Hospice Facilities 

  • Routine annual rate setting changes resulting in a 3.8% increase in payments for FFY 2023 
  • Permanent 5% cap on negative wage index changes
  • Hospice Quality Reporting Program updates, including the new Hospice Outcomes and Patient Evaluation Tool, the Consumer Assessment of Healthcare Providers and Systems hospice survey, quality measures for FFY 2023, and a summary of public comments from the request for information to inform future efforts related to HQRP health equity 

Additional details on the IRF PPS, IPF PPS and hospice payment final rules are available in CMS fact sheets.