What type of payment structure is utilized in an inpatient rehabilitation facility under Medicare?

An inpatient rehabilitation facility under Medicare uses a payment structure known as the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS). This system is designed specifically for inpatient rehabilitation services and establishes predetermined payment rates based on certain criteria.

IRF PPS is focused on the complexity of the patient's condition and the anticipated resources necessary to provide appropriate care. Payments are influenced by factors such as the diagnosis, functional status upon admission, and the anticipated length of stay. This system ensures that facilities are reimbursed fairly while promoting efficient use of healthcare resources.

While other terminology exists in the healthcare payment landscape—such as DRGs (Diagnosis Related Groups), which are used for inpatient hospital services, and RUGs (Resource Utilization Groups), which apply primarily to skilled nursing facilities—these are not applicable to the specific context of inpatient rehabilitation facilities that are governed under the structure provided by IRF PPS. Similarly, SNF PPS pertains to skilled nursing facilities, further differentiating it from the inpatient rehabilitation setting.