Trends in Medicare Reimbursement for Inpatient Rehabilitation 2020-2026

Thursday, October 23, 2025

12:45 PM - 2:15 PM MT

Location: Original Research Theater

Primary Author(s)

RC

Rosalynn Conic, MD,MPH,PhD

Fellow
Mayo Clinic Florida
Jacksonville , Florida

Co-Author(s)

EE

Emma Eng, Other

Medical Student
Charles E Schmidt College of Medicine At Florida Atlantic University
Boca Raton, Florida

Poster Presenter(s)

Ritesh Chandrasekaran, Other (he/him/his)

Medical Student
Florida Atlantic University College of Medicine
Wesley Chapel, Florida

Co-Author(s)

Paula Ackerman, DO

Staff Physiatrist
Malcom Randall Veterans Affairs Medical Center
Gainesville, Florida
RZ

Reese Zarreii, MD

Clinical Assistant Professor
University of Florida
Gainesville, Florida
AK

Alena Kosolapova, Other

Medical Student
Ross University School of Medicine
St Michael, Florida

Disclosure(s):

Rosalynn Conic, MD,MPH,PhD: No financial relationships to disclose

Ritesh Chandrasekaran, Other: No financial relationships to disclose

Paula Ackerman, DO: No financial relationships to disclose

Background and/or Objectives: Inpatient rehabilitation facilities (IRF) are reimbursed by Medicare using the prospective payment system (PPS), which is updated annually. Each patient is classified into a case-mix group (CMG), and subclassified into four tiers based on specific comorbidities. Data on trends in IRF-PPS reimbursement are sparse; however, outpatient reimbursement significantly decreased in the last decade. The aim of this study was to evaluate trends in Medicare IRF-PPS reimbursements.

Design: Data were extracted from the Centers for Medicare and Medicaid IRF-PPS for 2020-2026. Consumer Price Index (CPI) was used to adjust reimbursement rates to 2025 U.S. dollars. The compound annual growth rate (CAGR) was calculated to measure the annual rate of change. Average length of stay (ALOS) effects were assessed by dividing reimbursement by the corresponding ALOS.

Setting : IRF.

Participants : IRFs participating in Medicare.

Interventions: Not applicable

Main Outcome Measures: Reimbursement rates adjusted to 2025, CAGR.

Results: After CPI adjustment, reimbursement rates, for patients with No Tier decreased by $1347.98 (-5.58%, CAGR -1.13%), Tier 1 by $1619.56 (-4.19%, CAGR -0.86%), Tier 2 by $2070.2 (-7.03%, CAGR -1.43%) and Tier 3 by $1569.24 (-6.08%, CAGR -1.22%). During this time ALOS decreased by 1-1.39 days and after adjusting for ALOS changes, reimbursement rates increased slightly (No Tier 1.82%, CAGR 0.4%; Tier 1 2.7%, CAGR 0.51%; Tier 2 1.62%, CAGR 0.33%; Tier 3 1.07%, CAGR 0.24%). Reimbursement for stroke (-8.2%), non-traumatic brain injury (-6.09%), traumatic brain injury (-9.94%), non-traumatic spinal cord injury (-6.92%), traumatic spinal cord injury (-7.98%), cardiac (-5.24%), pulmonary (-2.33%), burn (-7.3%), multiple trauma (9%), amputation (-7.25%), miscellaneous (-3.97%) decreased while pain syndromes (2.49%), and osteoarthritis (0.94%) increased. When accounting for ALOS, all increased (0.2-7.26%, CAGR 0.09-1.43%) except for burn (-6.32%, CAGR -1.39%).

Conclusions: After adjusting for inflation, IRF reimbursement decreased, except for pain syndromes and osteoarthritis. Decreased reimbursement was accompanied by shorter ALOS. Future studies should evaluate if the persistent decreases in ALOS result in worse functional outcomes.