Georgia Medicare IRF PPS 2026 Guide

When a Georgia Medicare beneficiary has a stroke, suffers a spinal cord injury in a motor vehicle accident, breaks a hip in a fall at home, or sustains a traumatic brain injury, the question of where she will recover after the acute hospital phase is one of the most consequential decisions her family will make. This Georgia Medicare IRF PPS guide explains how the Section 4421 BBA 1997 IRF Prospective Payment System works and what the Inpatient Rehabilitation Facility (IRF) option offers Georgia families. The acute hospital stabilizes her medically. After that, she may go home with home health services, she may go to a skilled nursing facility for post-acute rehabilitation, she may go to a long-term care hospital if her medical complexity requires it, or she may go to an inpatient rehabilitation facility for intensive multidisciplinary rehab. Each setting has different criteria, different payment frameworks, different intensity of care, and different outcomes for different kinds of patients.

This guide is about the IRF setting, the most intensive post-acute rehabilitation option in the Medicare benefit structure. IRFs serve Medicare beneficiaries who need at least 3 hours of therapy per day, 5 days per week, who require physician-led inpatient rehabilitation care, and who have qualifying conditions such as stroke, spinal cord injury, traumatic brain injury, hip fracture, amputation, or specific other diagnoses. IRFs operate under a federal payment framework established by Section 4421 of the Balanced Budget Act 1997 (Public Law 105-33), codified at Section 1886(j) of the Social Security Act, and implemented through regulations at 42 CFR Part 412 Subpart P. The framework took effect for IRF cost reporting periods beginning January 1, 2002.

For Georgia, the IRF landscape includes Medicare-certified inpatient rehabilitation facilities, both stand-alone IRF hospitals and Subpart H IRF units of acute care hospitals. Major operators include Encompass Health (multiple Georgia facilities), Shepherd Center in Atlanta (internationally recognized for spinal cord injury and brain injury rehabilitation), Children's Healthcare of Atlanta Rehabilitation (pediatric specialty), Emory Rehabilitation Hospital, Wellstar Atlanta Rehabilitation Hospital, Augusta University Rehabilitation Hospital, Piedmont Rehabilitation, Northside Hospital Rehabilitation, Atrium Health Floyd Rehabilitation, and several others. Each facility serves a defined service area, has specific clinical specialties, and operates under the federal IRF PPS framework.

This guide is published by Brevy at brevy.com as part of our mission to be America's most trusted and comprehensive eldercare resource. It covers Section 4421 of the BBA 1997, Section 1886(j) of the Social Security Act, the 42 CFR Part 412 Subpart P regulations, the Case Mix Group (CMG) classification methodology, the IRF Patient Assessment Instrument (IRF-PAI), the 60 Percent Rule and the 13 qualifying conditions, the 3-hour rule, the preadmission screening requirements, the multidisciplinary team requirements, the federal per-discharge payment methodology, the standard Part A cost-sharing applicable to IRF stays, the IRF Quality Reporting Program, the distinction between stand-alone IRF hospitals and Subpart H IRF units of acute hospitals, the differences between IRF and SNF coverage, the major Georgia IRFs, and the practical questions Georgia families face when an IRF admission is being considered.

By Brevy Care Team · Last verified May 13, 2026

For Georgia Medicare beneficiaries and their families, IRF care often represents the difference between regaining substantial independence after a major medical event and remaining dependent on others for daily activities. The intensity of IRF rehabilitation, the physician-led care model, and the multidisciplinary team approach produce outcomes that are not achievable in less intensive settings for appropriately selected patients.

Consider a Georgia Medicare beneficiary in her late 70s who has suffered an ischemic stroke. After acute hospital stabilization, she has right-sided weakness, expressive aphasia, and impaired swallowing. The acute hospital discharge planning team faces a choice. Discharge home with outpatient therapy is unlikely to provide adequate intensity for her needs and may set her up for falls and complications. Discharge to a SNF for post-acute care will provide some therapy but with less intensity than her clinical situation requires. Discharge to an IRF will provide 3 hours of daily multidisciplinary therapy, physician oversight, and 24-hour skilled nursing in an environment designed for intensive rehab.

The choice matters because the trajectory of recovery in the first weeks after a stroke shapes long-term function. Patients who receive intensive rehab in the immediate post-acute period often achieve functional gains that translate into greater independence months and years later. Patients who do not receive adequate intensity may stabilize at a lower functional level than they could have achieved.

For Georgia, several specific factors shape the IRF landscape. Shepherd Center in Atlanta is one of the nation's leading rehabilitation hospitals for spinal cord injury and brain injury, drawing patients from across the Southeast and beyond. Encompass Health operates multiple Georgia facilities, providing geographic distribution of IRF access across the state. Major Georgia health systems including Emory, Wellstar, Piedmont, Northside, Augusta University, Phoebe Putney, Northeast Georgia, and Atrium Health Floyd operate IRF units or stand-alone IRF facilities that serve their respective regions.

Brevy publishes this guide and related guides at brevy.com to help Georgia families understand the choice between IRF, SNF, home health, and other post-acute settings before the choice is forced on them by a medical crisis. The right choice is the one that matches the patient's clinical condition, functional capacity, family situation, and recovery goals to the appropriate setting and intensity of care.

The pre-2002 cost-based framework

Like SNFs before SNF PPS, IRFs before IRF PPS were paid under a cost-based reimbursement framework. Each IRF filed an annual Medicare cost report identifying its actual Medicare-related costs, and Medicare reimbursed based on those costs subject to upper limits and various adjustments. Cost-based reimbursement supported high-cost cases and encouraged investment in rehabilitation capacity, but it produced weak incentives for efficiency and substantial payment variability across similar facilities.

The Balanced Budget Act 1997 directed CMS to develop and implement a prospective payment system for IRFs. After several years of development and refinement, the IRF PPS framework took effect for IRF cost reporting periods beginning January 1, 2002. The new framework paid IRFs a federal per-discharge amount based on patient case-mix classification, with annual updates through rulemaking.

The transition from cost-based to PPS was significant for IRF operations. Some IRFs that had relied on high cost reimbursement to support complex cases found PPS more restrictive. Other IRFs that had operated efficiently under cost-based saw modest changes. Over time, IRF operations adapted to the PPS framework, and the case-mix methodology was refined through multiple rulemaking cycles.

The 60 Percent Rule (historically 75 Percent Rule)

Long before IRF PPS, Medicare regulations distinguished IRFs from acute care hospitals based on the patient mix served by the facility. The original "75 Percent Rule" required that at least 75 percent of an IRF's inpatient population have one of a specified list of qualifying conditions. The rule served two purposes: it defined what kind of facility qualified as an IRF for Medicare payment purposes, and it ensured that IRF capacity was used for the patients for whom IRF care was most appropriate.

The 75 Percent Rule had been enforced sporadically before BBA 1997 and was tightened by CMS in 2004. Beginning in 2004, CMS audited IRFs for compliance with the 75 Percent Rule and applied enforcement consequences for facilities that fell short. The audit findings were controversial. Some IRFs that had operated as IRFs for years found themselves out of compliance because their patient mix had drifted over time. Other IRFs argued that the qualifying condition list was outdated and did not reflect contemporary clinical practice.

Section 5005 of the Deficit Reduction Act 2005 directed CMS to reduce the threshold from 75 percent to lower levels phased in over time. The current threshold is 60 percent, codified at 42 CFR 412.29(b)(1). IRFs must demonstrate that at least 60 percent of their inpatient population (as identified through medical record review) has one of 13 qualifying conditions.

The 60 Percent Rule applies at the facility level, not at the individual patient level. An IRF can admit patients who do not have one of the 13 qualifying conditions, as long as the overall patient mix meets the 60 percent threshold. The rule is reviewed annually, with compliance review based on a sample of medical records. Facilities found out of compliance face loss of IRF classification, which results in payment under the acute care IPPS framework rather than IRF PPS.

The 13 qualifying conditions

The 13 qualifying conditions are listed in 42 CFR 412.29(b)(1) and have been refined through rulemaking. The list as of 2026:

1. Stroke: ischemic or hemorrhagic stroke with functional impairment
2. Spinal cord injury: traumatic or non-traumatic SCI with functional impairment
3. Congenital deformity: with functional impairment
4. Amputation: traumatic or surgical amputation requiring rehabilitation
5. Major multiple trauma: multiple body system injuries requiring rehabilitation
6. Hip fracture (femur fracture): with rehabilitation needs after surgical or non-surgical treatment
7. Brain injury: traumatic or non-traumatic brain injury with functional impairment
8. Specific neurological conditions: including multiple sclerosis, motor neuron disease (including ALS), polymyositis, dermatomyositis, muscular dystrophy, Parkinson's disease, and similar neurological disorders
9. Burns: substantial burns requiring rehabilitation
10. Active polyarticular rheumatoid arthritis, psoriatic arthritis, or seronegative arthropathies: with specific severity criteria
11. Systemic vasculitides with joint inflammation: with specific severity criteria
12. Severe or advanced osteoarthritis: involving two or more major weight-bearing joints with specific criteria
13. Knee or hip joint replacement: with specific qualifying criteria (typically bilateral, BMI ≥50, or age 85+ with comorbidities)

The qualifying condition list reflects clinical conditions for which intensive multidisciplinary rehabilitation has the strongest evidence base for improving function. Stroke and SCI are the prototypical IRF conditions. Hip fracture and joint replacement are common, particularly in older Medicare beneficiaries. Brain injury, burns, and major multiple trauma cover specialized rehabilitation needs.

Some clinical conditions for which IRF care is sometimes appropriate are not on the qualifying condition list. Cardiac rehabilitation, pulmonary rehabilitation, and rehabilitation for general medical deconditioning are typically not included. Patients with these conditions can still be admitted to IRFs (and contribute to the 40 percent non-qualifying portion of the patient mix), but they do not count toward the 60 percent compliance threshold.

The 3-hour rule

The 3-hour rule is the patient-level threshold for IRF admission and continued IRF coverage. Under 42 CFR 412.622(a)(3)(ii), the patient must require and be able to tolerate intensive therapy. The standard is 3 hours per day of therapy, 5 days per week, with an alternative of 15 hours within 7 consecutive days for patients whose specific clinical course requires flexibility.

The 3 hours of therapy are typically a combination of physical therapy, occupational therapy, and speech-language pathology. The combination depends on the patient's clinical needs. A stroke patient with motor and language impairment might receive 90 minutes of PT, 60 minutes of OT, and 30 minutes of SLP daily. A hip fracture patient without cognitive or speech impairment might receive 90 minutes of PT and 90 minutes of OT.

The therapy must be active. Passive interventions (passive range of motion, modalities like ultrasound or electrical stimulation, etc.) generally do not count toward the 3-hour total. The therapy must be skilled, meaning it requires the expertise of a licensed therapist rather than being routine.

Documentation of the 3-hour therapy is essential. Daily treatment notes must document the therapy provided, the time spent, and the patient's response. Audit findings frequently identify documentation gaps where therapy is delivered but not adequately documented to demonstrate the 3-hour threshold.

The flexibility provision (15 hours in 7 consecutive days) allows for clinical variation. A patient who cannot tolerate 3 hours one day due to acute illness can make up the time on other days within the 7-day window. This flexibility supports clinical judgment without compromising the overall intensity requirement.

Some patients clinically appropriate for inpatient rehabilitation cannot tolerate 3 hours per day. These patients may be more appropriate for SNF rehabilitation, which has no 3-hour requirement and accommodates lower intensity. The choice between IRF and SNF depends substantially on the patient's tolerance for intensive therapy.

Preadmission screening

Preadmission screening is a regulatory requirement that ensures IRF admission decisions are based on documented clinical assessment. Under CMS guidance and 42 CFR 412.622, the screening must be:

• Completed within 48 hours before admission (with limited exceptions)
• Performed by a qualified clinician (typically a rehabilitation nurse or therapist)
• Reviewed and concurred with by a rehabilitation physician
• Documented in the medical record

The screening must address:

• The patient's medical and functional condition
• The patient's expected functional improvement with intensive rehab
• The patient's ability to participate in 3 hours of therapy daily
• The patient's need for hospital-level care (vs. lower intensity settings)
• The patient's discharge potential

The preadmission screening becomes part of the patient's IRF medical record and supports the medical necessity of the admission. Audit findings frequently identify cases where preadmission screening documentation is inadequate or where the screening does not support the admission decision.

The postadmission physician evaluation, completed within 24 hours of admission, confirms the preadmission findings and documents that the patient is appropriate for IRF care. If the postadmission evaluation reveals that the patient does not meet IRF criteria, the patient should be transferred to an appropriate setting.

Multidisciplinary team

IRF care is delivered by a multidisciplinary team that includes:

• Rehabilitation physician (typically a physiatrist with M.D. or D.O. specializing in physical medicine and rehabilitation)
• Rehabilitation nurses (RNs with rehabilitation training)
• Physical therapists (licensed PTs)
• Occupational therapists (licensed OTs)
• Speech-language pathologists (licensed SLPs, when applicable)
• Social workers or case managers (for discharge planning, family support, community resource coordination)

The team meets in weekly multidisciplinary team conferences, documented in the medical record, with all team members participating. The conferences review patient progress, adjust the plan of care, and address discharge planning.

The rehabilitation physician oversees the patient's care daily during the IRF stay. The physician documents progress notes, addresses medical complications, and coordinates with the team. The physician role is distinct from the consulting physician role in SNFs, where physician contact may be weekly rather than daily.

The team approach is one of the defining characteristics of IRF care. SNFs use therapy and nursing but typically without the same level of multidisciplinary integration. The team approach is the basis for the intensity of care and the outcomes that IRFs achieve.

The IRF Patient Assessment Instrument (IRF-PAI)

The IRF-PAI is the comprehensive patient assessment instrument that drives CMG classification. The IRF-PAI replaced the standalone Functional Independence Measure (FIM) over time, incorporating quality indicators alongside the functional assessment data.

Assessment timing

• Admission assessment: completed within 4 days of admission
• Discharge assessment: completed at discharge
• Interim assessments: applicable to specific circumstances

Data captured

• Demographics and admission data
• Impairment Group Code (IGC) reflecting the primary reason for admission
• Functional status at admission (self-care, mobility, communication, cognition)
• Comorbidities (etiologic and active)
• Quality indicators (skin integrity, falls, function improvement, etc.)
• Discharge data including functional status and discharge destination

CMG and tier assignment

The IRF-PAI data is processed to assign the patient to a CMG based on impairment group, motor function, and cognitive function. Each CMG is divided into 4 tiers based on the comorbidity score. The CMG and tier determine the federal per-discharge payment.

IRF-PAI coding accuracy

Like the MDS for SNFs, accurate IRF-PAI coding is essential. Coding errors can result in payment under- or over-statement, and audit findings can affect both individual case payments and facility classification status. IRF coordinators and clinical staff must understand both the clinical reality and the precise IRF-PAI definitions.

Section 4421 IRF PPS: federal per-discharge payment

Unlike SNF PPS (per diem), IRF PPS pays a single per-discharge amount for each Medicare admission. The amount is based on the CMG and tier, adjusted by the federal rate, wage index, and applicable adjustments.

Federal rate

The federal rate is set in the annual IRF PPS Final Rule. The rate reflects expected average cost per IRF admission, adjusted for market basket updates and productivity adjustments (Section 3401 ACA 2010).

Wage index

The wage index adjusts the federal rate for geographic differences in labor costs. Each IRF is assigned a wage index based on its location's hospital wage index. The wage index applies to the labor-related portion of the federal rate.

CMG payment

Each CMG has a relative weight that adjusts the federal rate. Higher-acuity CMGs (more severe impairment, more dependent function) have higher weights and produce higher payments. Lower-acuity CMGs have lower weights.

Tier adjustment

Within each CMG, four tiers reflect comorbidity severity. Tier 4 (most comorbid) has the highest payment adjustment; Tier 1 (least comorbid or no specific comorbidity) has no adjustment.

Outlier provisions

Short-stay outlier

Stays substantially shorter than the average for the CMG are paid as short-stay outliers, with reduced payment relative to the standard CMG payment.

Transfer policy

Patients transferred to acute hospitals or other settings during the IRF stay are paid as transfers, with payment proportional to the time spent in the IRF.

High-cost outlier

Cases with cost exceeding a specified outlier threshold receive additional payment beyond the standard CMG amount. The outlier provision protects IRFs from financial losses on very high-cost cases.

Standard Part A cost-sharing

Unlike SNF, which has unique cost-sharing for days 21-100, IRF care is paid under standard Medicare Part A inpatient cost-sharing. The IRF admission counts as an acute hospital admission for cost-sharing purposes.

• Days 1-60: Patient pays the Part A deductible ($1,736 per benefit period in 2026), no daily coinsurance after the deductible
• Days 61-90: Daily coinsurance ($434/day in 2026)
• Lifetime reserve days (up to 60 lifetime): Daily coinsurance ($868/day in 2026)
• After 90 days plus lifetime reserve: Patient responsible for full cost

The spell of illness framework applies. An IRF admission within the same spell of illness as a prior acute hospital admission does not require a separate deductible. The 60-day break between spells applies to IRF admissions just as to acute hospital admissions.

Most Medigap plans cover the Part A deductible and coinsurance, eliminating beneficiary out-of-pocket cost for the IRF stay (except for excluded services). Medicare Advantage plans handle cost-sharing differently and may have plan-specific copays for IRF admissions.

No three-day qualifying stay requirement

A key distinction from SNF is that IRF admission does not require a three-day qualifying hospital stay. Patients can be admitted to an IRF:

• From the community (direct admission) when clinical criteria are met
• From an acute hospital with any length of stay
• From a SNF if criteria changes warrant IRF admission
• From another IRF in specific transfer situations

Direct admission from the community is more common for patients with chronic conditions that meet IRF criteria (advanced multiple sclerosis, severe rheumatoid arthritis, etc.). For most acute medical events (stroke, hip fracture, etc.), patients are admitted to acute hospitals first for medical stabilization and then transferred to IRF for rehabilitation.

The absence of the three-day stay requirement is a significant operational difference from SNF. For appropriate IRF candidates, the path from acute hospital to IRF can be shorter than the path to SNF, which often requires meeting the three-day inpatient stay first.

IRF Quality Reporting Program (IRF QRP)

Section 3004 of the Affordable Care Act 2010 established the IRF Quality Reporting Program, codified at Section 1886(j)(7) of the Social Security Act. The IRF QRP requires IRFs to report specific quality measures, and IRFs that fail to report face a 2 percent reduction in the annual market basket update.

Quality measures

The IRF QRP measures evolve through annual rulemaking. Recent measures include:

• Function improvement (admission to discharge change in self-care and mobility scores)
• Discharge to community
• Hospital readmissions within 30 days
• Falls with major injury
• Pressure injuries (new or worsened)
• Patient experience (CAHPS-IRF)
• Medication reconciliation
• Drug regimen review with follow-up
• Transfer of health information

Public reporting

IRF QRP measures are publicly reported on Medicare Care Compare. Families can compare IRFs based on the publicly reported quality data.

42 CFR Part 482 Hospital Conditions of Participation

IRFs participate in Medicare as hospitals and are subject to the hospital Conditions of Participation at 42 CFR Part 482. The CoPs cover:

• Governing body and management
• Patient rights
• Quality assessment and performance improvement (QAPI)
• Medical staff
• Nursing services
• Medical record services
• Pharmaceutical services
• Radiologic services
• Laboratory services
• Food and dietetic services
• Utilization review
• Physical environment
• Infection control
• Discharge planning
• Organ tissue and eye procurement
• Special requirements for psychiatric hospitals and rehabilitation hospitals

In addition to the general hospital CoPs, IRFs must meet the specific IRF classification criteria at 42 CFR 412.622 (preadmission screening, postadmission physician evaluation, individualized plan of care, interdisciplinary team approach, etc.).

Stand-alone IRF vs Subpart H IRF unit

There are two structural categories of IRFs:

Stand-alone IRF hospital

A stand-alone IRF is a hospital that operates independently and is licensed as a rehabilitation hospital. It has its own Medicare provider number, its own administration, its own physical facility, and its own clinical and administrative leadership. Shepherd Center in Atlanta is a major example of a stand-alone IRF, as are many Encompass Health Rehabilitation Hospitals.

Subpart H IRF unit of acute hospital

A Subpart H IRF unit operates within an acute care hospital but functions as a distinct IRF for Medicare purposes. It has separate cost reporting, separate patient mix tracking, and is subject to the same 60 Percent Rule and 3-hour rule as a stand-alone IRF. The acute hospital retains its primary Medicare provider number, with the IRF unit operating under specific Subpart H provisions. Examples include rehabilitation units within Emory hospitals, Wellstar hospitals, Piedmont hospitals, and others.

Same payment framework

Both categories of IRF are paid under the same IRF PPS framework. The federal per-discharge methodology, the CMG classification, the wage index, the outlier provisions, and the IRF QRP all apply to both stand-alone and Subpart H IRFs. The structural difference affects organizational and operational arrangements but not payment methodology.

Worked example 1: GA IRF stroke admission scenario

Consider a 76-year-old Georgia Medicare beneficiary admitted to a Wellstar acute hospital with an ischemic stroke. After 4 days of acute care including IV thrombolysis, she is medically stable but has substantial right-sided weakness, expressive aphasia, and mild dysphagia. The acute hospital case manager identifies her as a candidate for IRF rehabilitation.

The IRF admission process:

1. Acute hospital discharge planning: identifies IRF as appropriate setting
2. Preadmission screening: completed by Wellstar Atlanta Rehabilitation Hospital rehab nurse, in coordination with acute hospital records
3. Rehab physician concurrence: physiatrist reviews screening, concurs with admission decision
4. IRF admission: transferred to Wellstar Atlanta Rehabilitation Hospital
5. Postadmission physician evaluation: completed within 24 hours, confirms appropriateness
6. IRF-PAI admission assessment: completed within 4 days
7. Plan of care: established by multidisciplinary team
8. Daily care: 3 hours of therapy daily (PT, OT, SLP), 24-hour rehab nursing, daily physician visits, weekly team conferences
9. Discharge planning: begins at admission, addresses home environment, family support, outpatient continuity
10. Discharge: typically 12-18 days for stroke, depending on progress
11. IRF-PAI discharge assessment: completed at discharge

Cost-sharing for the patient (assuming standard Medicare with Medigap Plan G):

• Part A deductible: $1,736 per benefit period in 2026 (paid by Medigap)
• Days 1-60: no coinsurance
• Total cost-sharing to beneficiary: $0 (with Medigap)

Without Medigap, the deductible would be the beneficiary's responsibility.

Worked example 2: 3-hour rule documentation

Consider a hip fracture patient at a Georgia IRF on day 8 of her stay. Her daily therapy schedule:

• 7:30 AM: Physical therapy, 45 minutes (gait training, weight-bearing progression)
• 9:30 AM: Occupational therapy, 45 minutes (self-care tasks, kitchen safety simulation)
• 11:00 AM: Physical therapy, 30 minutes (therapeutic exercises)
• 1:30 PM: Speech-language pathology, 30 minutes (cognitive-communication therapy for mild cognitive impairment)
• 3:00 PM: Occupational therapy, 30 minutes (upper extremity fine motor)
• Total skilled therapy: 180 minutes (3 hours)

Documentation requirements:

• Each therapy session has a treatment note documenting the specific interventions, time spent, patient response, and progress toward goals
• The total daily therapy time is verifiable from treatment notes
• The therapy is active and skilled, not passive modalities
• The pattern is consistent across 5 days of the week (or aggregates to 15 hours in 7 consecutive days)

If audit review finds documentation gaps (e.g., a session noted as occurring but without an adequate treatment note), the day may not count toward the 3-hour threshold, and the patient may be deemed not to have met the criterion for that day.

Worked example 3: 60 Percent Rule compliance

Consider an Atlanta-area Subpart H IRF unit with 24 beds operating at 90 percent occupancy. Over a 12-month compliance period, the unit had:

• Total Medicare and Medicaid admissions: 480
• Admissions with one of 13 qualifying conditions: 312
• Compliance percentage: 312 / 480 = 65 percent

The unit is in compliance with the 60 Percent Rule (65 percent > 60 percent threshold).

CMS conducts compliance review through medical record sampling, typically reviewing 20-50 records to verify the diagnoses. If the sample reveals that some recorded qualifying diagnoses do not meet the regulatory criteria (e.g., the diagnosis is documented but the severity or duration does not support the qualifying condition), the verified compliance percentage may be lower than the recorded percentage.

A facility that falls below 60 percent compliance loses IRF classification and reverts to acute hospital IPPS payment, which typically pays substantially less for the same patients. The compliance assessment process is therefore high-stakes for IRF operations.

Worked example 4: CMG case-mix classification

Consider an IRF patient admitted after stroke with right-sided hemiparesis and expressive aphasia. IRF-PAI data at admission:

• Impairment Group Code (IGC): 01.1 (Left body involvement) or 01.2 (Right body involvement); for our example, IGC 01.2
• Motor function score: 24 out of 91 (substantial dependence at admission)
• Cognitive function score: 18 out of 35 (mild-moderate cognitive impairment due to aphasia)
• Comorbidities: hypertension, atrial fibrillation, diabetes mellitus

Based on the IGC, motor score, and cognitive score, the patient is assigned to a specific CMG. The comorbidities place her into one of the four tiers within that CMG.

The federal per-discharge payment is calculated as:

• Federal rate (set annually by the IRF PPS final rule; verify the current rate in the most recent CMS IRF PPS Final Rule): adjusted by labor-related portion times wage index
• CMG relative weight (varies by CMG; the more dependent the patient, the higher the weight): multiplied by federal rate
• Tier adjustment (within each CMG, four tiers reflect comorbidity severity, with higher tiers carrying a higher payment adjustment): applied if applicable
• Geographic and other adjustments: applied as relevant

In practice: the base federal rate is multiplied by the CMG weight, adjusted by the wage index for the IRF's geographic area, and modified by any tier and outlier provisions to produce the per-discharge payment. Specific dollar figures depend on the actual federal rate, wage index, and CMG weight in the applicable year; consult the current CMS IRF PPS Final Rule for the operative values.

Worked example 5: Preadmission screening documentation

Consider an acute hospital case manager preparing to refer a patient to a Georgia IRF. The preadmission screening documentation should include:

1. Patient identification: name, MRN, date of birth, insurance
2. Diagnosis: principal diagnosis (e.g., ischemic stroke), relevant comorbidities
3. Medical status: stable for transfer, current medications, vital signs, recent labs
4. Functional status at acute hospital: current self-care abilities, mobility, communication, cognition
5. Expected functional improvement: realistic goals based on diagnosis and current function
6. Ability to participate in intensive therapy: tolerance for 3 hours/day, cognitive capacity to follow instructions, willingness to participate
7. Need for hospital-level care: 24-hour nursing, physician oversight, multidisciplinary team
8. Discharge potential: anticipated discharge destination, home environment, family support
9. Physician concurrence: rehab physician review and sign-off

The completed screening is reviewed by the IRF rehab physician, who must concur in writing. The screening becomes part of the IRF medical record. Audit review verifies that the screening was completed within 48 hours before admission, was thorough, and supported the admission decision.

Worked example 6: IRF vs SNF coverage decision

Consider a 70-year-old Georgia Medicare beneficiary with hip fracture and surgical repair. Discharge planning at the acute hospital must choose between IRF, SNF, and home health.

Patient factors favoring IRF:

• Excellent premorbid function
• Strong rehabilitation potential
• Can tolerate 3 hours of therapy per day
• Family support for discharge home
• Need for intensive multidisciplinary rehab
• Discharge to home is realistic with appropriate rehab

Patient factors favoring SNF:

• Less intensive premorbid function
• Multiple severe comorbidities limiting therapy tolerance
• Cannot tolerate 3 hours of therapy per day initially
• Slower expected progress requiring longer time
• Discharge to long-term care may be the realistic outcome

For our patient (assume good premorbid function, no significant comorbidities, can tolerate intensive therapy), IRF is the appropriate choice. She will likely complete IRF in 10-14 days, achieve significant functional gains, and discharge home with outpatient or home health continuity.

For a different patient (advanced age, multiple comorbidities, cognitive impairment limiting therapy participation), SNF might be more appropriate, with longer rehabilitation in a less intensive setting.

The choice should be driven by clinical assessment, not by financial considerations alone. Both IRF and SNF have appropriate roles for the right patients, and the wrong choice (IRF for a patient who cannot tolerate intensity, or SNF for a patient who could achieve more in IRF) compromises outcomes.

14 best practices for Georgia families navigating IRF care

1. Understand the IRF as a distinct level of care. It is more intensive than SNF, with hospital-level physician care and multidisciplinary team approach.

2. Engage with the acute hospital case manager about post-acute options. The case manager can coordinate IRF referral and preadmission screening.

3. Visit IRFs in advance when feasible. Tour Shepherd Center, Encompass Health facilities, hospital-based IRF units, or others to understand the environment and culture.

4. Use Medicare Care Compare to evaluate IRF quality. The IRF QRP measures provide comparable data across facilities.

5. Understand the 3-hour rule. Confirm with the IRF that the patient is expected to tolerate intensive therapy.

6. Engage with the multidisciplinary team during the stay. Attend weekly team conferences when invited.

7. Coordinate discharge planning from admission. Discharge to home, to home with home health, or to a SNF for additional rehab should be planned throughout the stay.

8. Understand the Part A cost-sharing. Deductible and potential coinsurance for stays beyond 60 days.

9. Use Medigap or other supplemental coverage to address cost-sharing. Most Medigap plans cover Part A deductible and coinsurance.

10. Communicate with the patient's outpatient providers. Continuity from IRF to outpatient care affects long-term outcomes.

11. Understand functional improvement expectations. Set realistic goals with the team.

12. Address home environment for discharge. Equipment, modifications, family support, and outpatient continuity.

13. Use Quality Improvement Organization review for coverage disputes. Acentra Health is the QIO for Georgia (1-844-455-8708).

14. Engage Georgia-specific advocacy resources. GeorgiaCares SHIP, Atlanta Legal Aid, Georgia Legal Services, Brain Injury Association of Georgia, and others provide support.

14 common issues with Georgia IRF care

1. Patients deemed inappropriate for IRF after admission due to inability to tolerate 3-hour therapy. Transfer to SNF or home health may follow.

2. Documentation gaps in 3-hour therapy logs. Audit findings can affect payment and compliance.

3. Preadmission screening completed beyond 48 hours before admission. Compliance issue requiring documentation review.

4. 60 Percent Rule compliance audit findings. Facility-level concern; IRFs that fall below 60 percent lose classification.

5. CMG coding disputes affecting payment. IRF-PAI coding accuracy matters.

6. Comorbidity tier assignment disputes. Affects payment within CMG.

7. Short-stay outlier reductions. Stays shorter than expected receive reduced payment.

8. Transfer policy reductions. Patients transferred mid-stay receive prorated payment.

9. High-cost outlier eligibility disputes. Outlier threshold and applicability.

10. Quality measure performance affecting reputation and contracts. Care Compare ratings are visible to consumers.

11. Discharge to community measure pressures. Pressure to discharge to community may conflict with clinical reality.

12. Family expectations of full recovery not matched by clinical reality. Realistic goal setting matters.

13. Continuity gaps between IRF discharge and outpatient care. Coordination challenges.

14. Coverage disputes when patient does not progress as expected. QIO review can address premature termination.

Major Georgia IRFs

Georgia has Medicare-certified IRFs with concentration in metro Atlanta and dispersed coverage across other regions.

Stand-alone IRF hospitals

• Shepherd Center, Atlanta: internationally recognized specialty in spinal cord injury and traumatic brain injury rehabilitation. One of the largest stand-alone rehabilitation hospitals in the United States.
• Encompass Health Rehabilitation Hospitals: multiple Georgia facilities including Atlanta, Newnan, Columbus, Savannah, and other locations. Major national operator.
• Children's Healthcare of Atlanta Rehabilitation: pediatric specialty.

Subpart H IRF units (selected)

• Emory Rehabilitation Hospital: Emory University academic medical center rehabilitation.
• Wellstar Atlanta Rehabilitation Hospital: major suburban Atlanta facility.
• Augusta University Rehabilitation Hospital: academic medical center.
• Piedmont Rehabilitation: various Piedmont locations.
• Northside Hospital Rehabilitation: multi-campus.
• Atrium Health Floyd Rehabilitation, Rome: northwest Georgia.
• Phoebe Putney Rehabilitation, Albany: southwest Georgia.
• Northeast Georgia Rehabilitation, Gainesville: northeast Georgia.

The specific IRF appropriate for any patient depends on clinical specialty (Shepherd for SCI/brain injury; CHOA for pediatric; general IRFs for stroke, hip fracture, joint replacement), geographic accessibility, insurance acceptance, and family preference.

Future IRF reform discussions

Several ongoing policy debates affect the future of IRF PPS:

60 Percent Rule modification

Some advocates argue for further reduction or elimination of the 60 Percent Rule, arguing that the rule restricts clinically appropriate admissions for patients with conditions not on the qualifying list. Others argue the rule is essential for ensuring IRF resources are used for the patients for whom IRF care is most appropriate. MedPAC has analyzed the rule and made recommendations through multiple report cycles.

Outcomes measurement

The IRF QRP measure set continues to evolve. Future measures may include patient-reported outcomes, longer-term functional outcomes, and additional quality dimensions.

Telehealth integration

IRF telehealth is currently limited. Some proposals would expand telehealth applications, particularly for family education, outpatient follow-up coordination, and consultation with referring providers.

Site-neutral payment proposals

Some policy advocates argue for site-neutral payment between IRF and SNF for certain conditions. The argument is that for some patients, similar care could be delivered in either setting, and Medicare should pay similar amounts. Industry advocates (AMRPA) argue that IRF and SNF are distinct levels of care that warrant distinct payment.

A few more common questions Georgia families ask:

When did Medicare's IRF PPS begin? The IRF PPS was established by Section 4421 of the Balanced Budget Act 1997 (Public Law 105-33) and took effect for IRF cost reporting periods beginning January 1, 2002. The framework replaced cost-based reimbursement with a federal per-discharge payment methodology codified at Section 1886(j) of the Social Security Act.

What are the 13 qualifying conditions? Stroke, spinal cord injury, congenital deformity, amputation, major multiple trauma, hip fracture, brain injury, specific neurological conditions (including MS, ALS, Parkinson's disease, motor neuron diseases), burns, active polyarticular rheumatoid arthritis or similar inflammatory arthritis, systemic vasculitides with joint inflammation, severe or advanced osteoarthritis, and knee or hip joint replacement with specific qualifying criteria.

What is preadmission screening? A qualified clinician must complete a comprehensive assessment of the patient within 48 hours before admission to an IRF. The screening addresses medical and functional condition, expected functional improvement, ability to participate in intensive therapy, and need for hospital-level care. A rehabilitation physician must review and concur with the screening.

Who participates in the IRF multidisciplinary team? A rehabilitation physician (typically a physiatrist), rehabilitation nurses, physical therapists, occupational therapists, speech-language pathologists (when applicable), and social workers or case managers. Weekly team conferences are required and documented in the medical record.

What is the IRF Patient Assessment Instrument? The IRF-PAI is the comprehensive patient assessment tool that drives Case Mix Group (CMG) classification. It captures demographics, impairment group code, functional status, comorbidities, and quality indicators at admission, discharge, and applicable interim assessments.

How does IRF differ from SNF? IRF is a hospital-level setting with physician-led care, a 3-hour therapy requirement, and standard Medicare Part A cost-sharing. SNF is a nursing facility setting with nurse and therapy leadership, variable therapy intensity, and separate cost-sharing including days 21-100 coinsurance. SNF requires a three-day qualifying hospital stay; IRF does not.

How is the IRF federal per-discharge payment calculated? From the CMG and tier assigned based on the IRF-PAI, multiplied by the CMG relative weight and the federal rate, adjusted by wage index and other applicable adjustments. The federal rate is updated annually through the IRF PPS Final Rule.

What are the IRF outlier provisions? The short-stay outlier reduces payment for stays substantially shorter than expected. The transfer policy reduces payment for patients transferred mid-stay. The high-cost outlier provides additional payment for cases with costs exceeding a specified threshold, protecting IRFs from financial losses on very high-cost cases.

What is the IRF Quality Reporting Program? The IRF QRP, established by Section 3004 of the ACA and codified at Section 1886(j)(7), requires IRFs to report specific quality measures. IRFs that fail to report face a 2 percent reduction in the annual market basket update. Measures include function improvement, discharge to community, readmissions, falls with major injury, pressure injuries, and patient experience.

What is the difference between a stand-alone IRF and an IRF unit? A stand-alone IRF is a separately licensed rehabilitation hospital with its own Medicare provider number. An IRF unit (Subpart H unit) operates within an acute care hospital with separate cost reporting and patient mix tracking. Both are paid under the same IRF PPS framework and must meet the same 60 Percent Rule and 3-hour rule.

Which Georgia hospitals operate IRFs? Major Georgia IRFs include Shepherd Center Atlanta (specializing in spinal cord injury and brain injury), Encompass Health Rehabilitation Hospitals (multiple Georgia locations), Children's Healthcare of Atlanta Rehabilitation (pediatric), Emory Rehabilitation Hospital, Wellstar Atlanta Rehabilitation Hospital, Augusta University Rehabilitation Hospital, Piedmont Rehabilitation, Northside Hospital Rehabilitation, Atrium Health Floyd Rehabilitation, Phoebe Putney Rehabilitation, and Northeast Georgia Rehabilitation.

Why is Shepherd Center notable? Shepherd Center in Atlanta is one of the nation's leading rehabilitation hospitals for spinal cord injury and traumatic brain injury. The facility serves patients from across the Southeast and beyond and is recognized internationally for its specialty rehabilitation programs.

What is the role of the rehabilitation physician (physiatrist)? The rehabilitation physician (typically a physiatrist) oversees the IRF stay. Daily physician contact is required. The physician coordinates the multidisciplinary team, addresses medical complications, and ensures the plan of care is appropriate.

How long is a typical IRF stay? Length of stay varies by diagnosis. Hip fracture: typically 8-14 days. Stroke: typically 12-18 days. Spinal cord injury: typically 30 days or more for incomplete injuries, longer for complete injuries. Brain injury: highly variable depending on severity. Joint replacement: typically 5-10 days.

What happens if a patient cannot tolerate the 3-hour therapy? If a patient is admitted to IRF but cannot tolerate 3 hours of therapy per day, the IRF must reassess appropriateness. Options include continued IRF care if the patient can meet the 3-hour standard within the 15-hours-in-7-consecutive-days flexibility, transfer to SNF for less intensive rehab, or discharge home if appropriate.

How can I check IRF quality? Medicare Care Compare (medicare.gov/care-compare) provides IRF quality data including function improvement, discharge to community, readmissions, falls, pressure injuries, and patient experience measures. The data supports comparison across IRFs.

What is the role of the Quality Improvement Organization? Acentra Health is the Quality Improvement Organization for Georgia (1-844-455-8708). The QIO reviews expedited appeals of Medicare coverage termination decisions, including for IRF stays. When a patient receives a Notice of Medicare Non-Coverage, expedited QIO review is available.

How does Medicaid coordinate with Medicare for IRF care? Medicare pays the IRF under PPS. For dual-eligible beneficiaries, Medicaid may pay the Part A deductible and coinsurance for QMB-eligible beneficiaries. After Medicare's 90-day plus lifetime reserve coverage exhausts (uncommon for IRF stays), Medicaid would apply for ongoing care if eligibility criteria are met.

What is the future of IRF PPS? Future reform discussions include possible modification of the 60 Percent Rule, refinement of quality measures, expansion of telehealth applications, and potential site-neutral payment proposals between IRF and SNF for certain conditions. The framework continues to evolve through annual rulemaking.

How can I learn more about Medicare IRF coverage? Brevy publishes related guides at brevy.com including Medicare Skilled Nursing PPS, Medicare Hospital Inpatient Benefit, Medicare Three-Day Qualifying Stay, and Medicare Home Health Benefit. For personal assistance, contact GeorgiaCares SHIP at 1-866-552-4464 or Medicare at 1-800-MEDICARE.

How can a Georgia family file a complaint about an IRF? Complaints can be filed with the Georgia Department of Community Health Healthcare Facility Regulation Division (404-657-5728), with the Acentra Health QIO (1-844-455-8708), or with Medicare directly (1-800-MEDICARE). Complaints trigger investigation and potential enforcement action.