CMS Pub. 100-04, ch. 3, § 140

PPS)

(Rev. 2673, Issued: 03-14-13, Effective: 04-22-13, Implementation: 04-22-13)

Section 1886(j) of the Social Security Act (the Act) authorizes the implementation of a per

discharge prospective payment system (PPS) for inpatient rehabilitation hospitals and

inpatient rehabilitation units of a hospital now jointly referred to as inpatient rehabilitation

facilities (IRFs).

The IRF PPS is effective for cost reporting periods beginning on or after January 1, 2002.

IRF PPS payment rates include all costs of furnishing covered IRF services (routine,

ancillary, and capital-related costs) other than costs associated with operating approved

educational activities as defined in

http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR, select the

applicable year. Then select Title 42, Chapter IV. Select the TOC for Section 413 and

choose §413.75 and §413.85 for educational activities. You may also search the TOC for

bad debts, and other costs not covered under the PPS.

Effective for cost reporting periods beginning on or after October 1, 2004, the Medicare

Modernization Act of 2003, Public Law 108-173, section 405(g) established that CAHs may

open rehabilitation distinct part units. These IRFs will also be paid under the IRF PPS.