Medicare program; inpatient rehabilitation facility prospective payment system for federal fiscal year 2012; changes in size and square footage of inpatient rehabilitation units and inpatient psychiatric units. Final rule.

This final rule will implement section 3004 of the Affordable Care Act, which establishes a new quality reporting program that provides for a 2 percent reduction in the annual increase factor beginning in 2014 for failure to report quality data to the Secretary of Health and Human Services. This final rule will also update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY) 2012 (for discharges occurring on or after October 1, 2011 and on or before September 30, 2012) as required under section 1886(j)(3)(C) of the Social Security Act (the Act). Section 1886(j)(5) of the Act requires the Secretary to publish in the Federal Register on or before the August 1 that precedes the start of each FY the classification and weighting factors for the IRF prospective payment system (PPS) case-mix groups and a description of the methodology and data used in computing the prospective payment rates for that fiscal year. We are also consolidating, clarifying, and revising existing policies regarding IRF hospitals and IRF units of hospitals to eliminate unnecessary confusion and enhance consistency. Furthermore, in accordance with the general principles of the President's January 18, 2011 Executive Order entitled "Improving Regulation and Regulatory Review," we are amending existing regulatory provisions regarding ''new'' facilities and changes in the bed size and square footage of IRFs and inpatient psychiatric facilities (IPFs) to improve clarity and remove obsolete material.