Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2027 and Updates to the IRF Quality Reporting Program; Correction

Issuing agencies

Abstract

This document corrects technical errors in the final rule that appeared in the August 3, 2026 Federal Register titled "Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2027 and Updates to the IRF Quality Reporting Program".

Full Text

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<title>Federal Register, Volume 91 Issue 189 (Thursday, October 1, 2026)</title>
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[Federal Register Volume 91, Number 189 (Thursday, October 1, 2026)]
[Rules and Regulations]
[Pages 62327-62334]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20131]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412 and 414

[CMS-1845-CN]
RIN 0938-AV76


Medicare Program; Inpatient Rehabilitation Facility Prospective 
Payment System for Federal Fiscal Year 2027 and Updates to the IRF 
Quality Reporting Program; Correction

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Final rule; correction.

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SUMMARY: This document corrects technical errors in the final rule that 
appeared in the August 3, 2026 Federal Register titled ``Medicare 
Program; Inpatient Rehabilitation Facility Prospective Payment System 
for Federal Fiscal Year 2027 and Updates to the IRF Quality Reporting 
Program''.

DATES: This correction is effective October 1, 2026.

FOR FURTHER INFORMATION CONTACT: 
    <a href="/cdn-cgi/l/email-protection#92dbc0d4f1fde4f7e0f3f5f7d2f1ffe1bcfafae1bcf5fde4"><span class="__cf_email__" data-cfemail="d8918a9ebbb7aebdaab9bfbd98bbb5abf6b0b0abf6bfb7ae">[email&#160;protected]</span></a>, for general information.
    Kimberly Schwartz, (410) 786-2571, for information about the IRF 
payment policies, payment rates and coverage policies.
    Patricia Taft, (410) 786-4561, for readers who experience problems 
accessing online IRF-PPS documents.

SUPPLEMENTARY INFORMATION:

I. Background

    In FR Doc. 2026-15652 of August 3, 2026, the Inpatient 
Rehabilitation Facility (IRF) Prospective Payment System (PPS) for 
Federal Fiscal Year (FY) 2027 and Updates to the IRF Quality Reporting 
Program final rule (FY 2027 IRF PPS final rule) (91 FR 48982), there 
were a number of technical errors that are identified and corrected in 
this correcting document.

II. Summary of Errors

A. Summary of Errors in the Preamble

    We made an inadvertent technical error when calculating the FY 2027 
pre-floor, pre-reclassified IPPS wage index. Under our methodologies as 
finalized in the FY 2027 IPPS/Long-Term Care Hospitals (LTCH) PPS final 
rule, we exclude rural emergency hospitals (REHs) including hospitals 
that subsequently became REHs after the period from which the data were 
taken, from certain data and calculations used in the IPPS rate 
setting, including the development of the Medicare Severity Diagnosis-
Related Group (MS-DRG) relative weights for FY 2027 (91 FR 49672) and 
the calculation of the standardized amount (91 FR 50370). In addition, 
we stated that any hospital that is designated as an REH by 7 days 
prior to the publication of the preliminary wage index public use file 
(PUF) is excluded from the calculation of the wage index (91 FR 49791). 
We inadvertently treated a current IPPS hospital (CMS Certification 
Number (CCN) 250078) as a hospital that had converted to REH status, 
thereby erroneously excluding its data from the MS-DRG relative weight 
calculation and the wage index. Therefore, we restored the applicable 
data for this hospital and recalculated the FY 2027 IPPS pre-floor, 
pre-reclassified hospital wage index.
    As a result of this technical error that affected the FY 2027 IPPS 
pre-floor, pre-reclassified hospital wage index, we recalculated the 
affected FY 2027 IRF PPS rate-setting calculations, including all 
applicable budget neutrality factors and the final outlier threshold, 
as discussed further in section II.B. of this correcting document. The 
updated IPPS wage index results in changes to the FY 2027 IRF PPS final 
rule pages 49000 through 49005 and 49027 through 49028.
    On page 49013, in section IX., ``Request for Information Regarding 
Future IRF Payment Reform'', we included erroneous text regarding the 
IRF Quality Reporting Program.

B. Summary of Errors and Corrections Posted on the CMS Website for the 
IRF Wage Index

    After the FY 2027 IRF PPS final rule was published, we identified 
that the FY 2027 IPPS wage index had been calculated without data from 
one IPPS hospital. Specifically, the hospital (CCN 250078) was 
erroneously classified as an REH, excluding it from the MS-DRG relative 
weight calculation and the IPPS wage index. As a result, the IPPS 
national hourly wage required updating, which resulted in updates to 
the budget neutrality factors and outlier threshold for IRF. Therefore, 
in this document, we utilized updated IRF wage index data which include 
the provider. The inclusion of a revised wage index resulted in changes 
to the estimated payment update (section VI. of the FY 2027 IRF PPS 
final rule) and changes to the estimated payment impact (section XIII. 
of the FY 2027 IRF PPS final rule).

III. Waiver of Proposed Rulemaking and Delay in Effective Date

    Section 1871(b)(1) of the Social Security Act (the Act) requires 
the Secretary to provide for notice of a proposed rule in the Federal 
Register and provide a period of not less than 60 days for public 
comment. In addition, section 1871(e)(1)(B)(i) of the Act mandates a 
30-day delay in effective date after issuance or publication of a rule. 
Section 1871(b)(2)(C) of the Act provides an exception from the notice 
and 60-day comment period and delay in effective date requirements of 
the Act, under the good cause standard set forth in 5 U.S.C. 553(b)(B). 
Section 1871(e)(1)(B)(ii) of the Act provides an exception from the 
delay in effective date requirements of the Act as well. Section 
553(b)(B) authorizes an agency to dispense with normal notice and 
comment rulemaking procedures for good cause if the agency makes a 
finding that the notice and comment process is impracticable, 
unnecessary, or contrary to the public interest, and includes a 
statement of the finding and the reasons for it in the rule. In 
addition, section 1871(e)(1)(B)(ii) of the Act allows the agency to 
avoid the 30-day delay in effective date where the waiver is necessary 
to comply with statutory requirements or such delay is contrary to the 
public interest and the agency includes in the rule a statement of the 
finding and the reasons for it.
    In our view, this correcting document does not constitute a 
rulemaking that would be subject to these requirements. This document 
merely corrects technical errors, removes erroneous text in the IRF 
Request for Information in section IX. related to the IRF Quality 
Reporting Program and provides an updated wage index resulting in 
revisions to the payment updates, payment impact, and related tables in 
the FY 2027 IRF PPS final rule but does not make substantive changes to 
the policies or payment methodologies that were adopted in the FY 2027 
IRF PPS final rule. The corrections contained in this document are 
consistent with, and

[[Page 62328]]

do not make substantive changes to, the policies and payment 
methodologies that were proposed, subject to notice and comment 
procedures, and adopted in the FY 2027 IRF PPS final rule. As a result, 
the corrections made through this document are intended to resolve 
inadvertent errors so that the FY 2027 IRF PPS final rule accurately 
reflects the policies adopted therein.
    In addition, even if this were a rulemaking to which the notice and 
comment and delayed effective date requirements applied, we find that 
there is good cause to waive such requirements. Undertaking further 
notice and comment procedures to incorporate the corrections in this 
document into the final rule or delaying the effective date would be 
contrary to the public interest because it is in the public's interest 
for providers to receive appropriate payments in as timely a manner as 
possible, and to ensure that the FY 2027 IRF PPS final rule accurately 
reflects our policies. Furthermore, such procedures would be 
unnecessary, as we are not altering our payment methodologies or 
policies, but rather, we are simply implementing correctly the 
methodologies and policies that we previously proposed, requested 
comment on, and subsequently finalized. This final rule correction is 
intended solely to ensure that the FY 2027 IRF PPS final rule 
accurately reflects these payment methodologies and policies. 
Therefore, we believe we have good cause to waive the notice and 
comment and effective date requirements.

IV. Correction of Errors

    In FR Doc. 2026-15652 of August 3, 2026, make the following 
corrections:
    1. On page 49000,
    a. Top third of the page, third column, first partial paragraph,
    (1) Line 6, the figure that reads ``1.0036'' is corrected to read 
``1.0035''.
    (2) Line 7, the figure that reads ``$19,888'' is corrected to read 
``$19,886''.
    (3) Line 11, the figure that reads ``$19,868'' is corrected to read 
``$19,866''.
    b. Middle of the page, Table 5 titled ``Calculations to Determine 
the FY 2027 IRF Standard Payment Conversion Factor'', is corrected to 
read:
[GRAPHIC] [TIFF OMITTED] TR01OC26.000

    c. Bottom third of the page, first column, last paragraph, line 4, 
the figure that reads ``$19,868'' is corrected to read ``$19,866''.
    2. On pages 49001 through 49003, the Table 6 titled ``FY 2027 IRF 
PPS Payment Rates'', is corrected to read:
BILLING CODE 4169-69-P

[[Page 62329]]

[GRAPHIC] [TIFF OMITTED] TR01OC26.001


[[Page 62330]]


[GRAPHIC] [TIFF OMITTED] TR01OC26.002


[[Page 62331]]


[GRAPHIC] [TIFF OMITTED] TR01OC26.003

    3. On page 49003, bottom half of the page,
    a. First column, last paragraph, line 10, the figure that reads 
``0.8604'' is corrected to read ``0.8606''.
    b. Second column, first partial paragraph, line 3, the figure that 
reads ``0.9326'' is corrected to read ``0.9327''.
    4. On page 49004, the Table 7 titled ``Example of Computing the FY 
2027 IRF Prospective Payment Rate'' is corrected to read:
[GRAPHIC] [TIFF OMITTED] TR01OC26.004

BILLING CODE 4169-69-C

[[Page 62332]]

    5. On page 49004, middle of the page, first column, first 
paragraph,
    a. Line 2, the figure that reads ``$31,745.14'' is corrected to 
read ``$31,747.21''.
    b. Line 4, the figure that reads ``$32,401.79'' is corrected to 
read ``$32,401.07''.
    6. On page 49005, second column, last paragraph, line 4, the figure 
that reads ``$8,857'' is corrected to read ``$8,856''.
    7. On page 49013, column 2, lines 5 through 13, remove the phrase 
``The recommended deadlines of 60 or 90 days after the end of the 
quarter would not achieve our goal of providing more timely data to 
consumers and IRFs, as posting of public reporting would fall into the 
same quarterly refresh that it is in currently. For example, for Q1 
groupings.''.
    8. On pages 49027 and 49028, Table 14 titled ``IRF Impact for FY 
2027 (Columns 4 through 7 in Percentages)'', is corrected to read:
BILLING CODE 4169-69-P

[[Page 62333]]

[GRAPHIC] [TIFF OMITTED] TR01OC26.005


[[Page 62334]]


[GRAPHIC] [TIFF OMITTED] TR01OC26.006

    9. On page 49028, middle of the page, first column, second 
paragraph, line 10, the figure that reads ``$8,857'' is corrected to 
read ``$8,856''.

Liesl I. Fowler,
Executive Secretary to the Department, Department of Health and Human 
Services.
[FR Doc. 2026-20131 Filed 9-30-26; 8:45 am]
BILLING CODE 4169-69-C


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