DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
Center for Medicaid and State Operations 
                    SMDL #01-032 
 
                December 5, 2001   
 
Dear State Medicaid Director: 
 
Effective January 1, 2002, Medicare will implement a prospective payment system (PPS) for 
reimbursement to inpatient rehabilitation facilities (IRFs).  Since some of our beneficiaries 
access both Medicare and Medicaid program benefits, you need to be aware of these upcoming 
Medicare changes.  To that end, we enclose the Medicare Program Memorandum (PM) 
Transmittal A-01-110, providing instructions for the implementation of the IRF PPS, recently 
issued to Medicare Fiscal Intermediaries.  
 
We strongly recommend that your staff continue to work closely with the Medicare 
Intermediaries in your State to ensure an effective implementation and coordination of benefits 
on behalf of Medicaid beneficiaries who also have Medicare coverage. 
 
Information on the IRF PPS, including answers to the most frequently asked questions and IRF 
PPS hotlines are available on the Internet at:  http://www.hcfa.gov/medicare/irfpps.htm.  
 
Sincerely, 
 
 
  /s/       
 
Dennis G. Smith 
Director 
 
Enclosure 
 
cc: 
CMS Regional Administrators 
 
CMS Associate Regional Administrators  
    for Medicaid and State Operations    
 
Lee Partridge 
Director, Health Policy Unit 
American Public Human Services Association 
 
   
 
  Page 2- State Medicaid Director 
 
Joy Wilson 
Director, Health Committee 
National Conference of State Legislatures 
 
Matt Salo 
Director of Health Legislation 
National Governors' Association 
 
Brent Ewig 
Senior Director, Access Policy 
Association of State and Territorial Health Officials 
 
Jennifer King 
Health and Human Services Task Force Director 
American Legislative Exchange Council 
 
Trudy Matthews 
Senior Health Analyst 
Council of State Governments 
 
 
 
 
 
 
       
 
 
 
 
 
 
   
 
   
Program Memorandum Department of Health and 
  Human Services (DHHS) 
Intermediaries Centers for Medicare and 
  Medicaid Services (CMS) 
     
Transmittal A-01-110    Date: SEPTEMBER 14, 2001 
 
                              CHANGE REQUEST  
1851
 
SUBJECT:  Instructions for Implementing the Inpatient Rehabilitation Facility  
                     Prospective Payment System (IRF PPS) 
 
NOTE: The following instruction is a revision and modification of CR 1657  
              (Transmittal Number: A-01-92). 
 
The purpose of this program memorandum (PM) is to provide general information and specific 
instructions related to the implementation of the Medicare prospective payment system (PPS) for 
inpatient rehabilitation facilities (IRFs).  This PM is divided into three sections.  The first section 
reiterates the requirements for IRF classification, the second with payment provisions under IRF 
PPS, and the third with claims processing and billing by providers under IRF PPS.   
 
Section 4421 of the Balanced Budget Act (BBA) of 1997 (Public Law 105-33), as amended by 125 
of the Balanced Budget Refinement Act (BBRA) of 1999 (Public Law 106-113, Appendix F) and 
305  of  the  Benefits  Improvement  and  Protection  Act  of  2000  (BIPA),  authorizes  the 
implementation of a per discharge prospective payment system (PPS), through new 1886(j) of the 
Social Security Act, for inpatient rehabilitation hospitals and rehabilitation unitsreferred to as 
inpatient rehabilitation facilities (IRFs).   
 
The proposed rule published on November 3, 2000, established a 60 day comment period. On 
December 27, 2000, we published a notice in the Federal Register extending the comment 
period for an additional 30 days to February 1, 2001.  After an extensive analysis of the changes 
required to CMS and provider information systems, we have determined that the earliest feasible 
date to implement the IRF PPS is for cost reporting periods beginning on or after January 1, 
2002.  The final rule was published in the Federal Register (66 FR 41316) on August 7, 2001.  
These payment rates will cover all costs of furnishing covered IRF services (that is, routine, 
ancillary, and capital-related costs) other than costs associated with operating approved 
educational activities as defined in 42 CFR 413.85 and 413.86, bad debts, and other costs not 
covered under the PPS. 
 
MEDICARE IRF CLASSIFICATION REQUIREMENTS 
 
In general, the criteria for a facility to be classified as an IRF remains unchanged from the 
requirements used to classify entities as exempt from the acute care hospital PPS.  In order to be 
paid under the IRF PPS, a facility first must meet the conditions for payment under 412.604 of 
the regulations (established in the final rule).  In addition, an entity must meet the requirements 
under 412.23(b) which in part states that a facility must: 
 
show that during its most recent 12-month cost reporting period, it served 
an inpatient population of whom at least 75 percent required intensive 
rehabilitative services for the treatment of one or more of the following 
conditions: stroke, spinal cord injury, congenital deformity, amputation, 
major multiple trauma, fracture of femur (hip fracture), brain injury, 
polyarthritis (including rheumatoid arthritis), neurological disorders  
(including multiple sclerosis, motor neuron diseases, polyneuropathy, 
muscular dystrophy, and Parkinsons disease), and burns. 
   
 
  CMS-Pub.60A 
 
 
Hospitals that are not paid under the IRF PPS, but are paid under special payment provisions are: 
Veterans Administration Hospitals, hospitals that are reimbursed under state cost control 
systems approved under 42 CFR Part 403, and hospitals that are reimbursed in accordance with 
demonstration projects authorized under 402(a) of Public Law 90-248 (42 U.S.C. 1395b-1) or 
222(a) of Public Law 92-603 (42 U.S.C. 1395b-1).  Payment to foreign hospitals will be made 
in accordance with the provisions set forth in section 413.74 of the regulation. 
 
 
PAYMENT PROVISIONS UNDER IRF PPS 
 
Section 1886 of the BBA provides the basis for the establishment of the Federal payment rates 
applied under PPS to IRFs. The PPS will incorporate per discharge federal rates based on 
average IRF costs in a base year updated for inflation to the first effective period of the system.  
 
Beneficiary liability will operate the same as under the current Tax Equity and Fiscal 
Responsibility Act of 1982 (TEFRA) payment system.  Even if Medicare payments are below 
cost of care for a patient under prospective payment, the patient cannot be billed for the 
difference in any case.  
 
  Payment Adjustment Factors and Rates 
 
The BBA sets forth the methodology for establishing the payment rates as well as the data on 
which they are based.  In addition, this section prescribes adjustments to such rates based on 
geographic variation and case-mix and other factors the Secretary deems necessary to ensure that 
payment most accurately reflects cost.   
 
The BBA specifies that payments during fiscal years 2001 and 2002 must be established in a 
manner that results in the amount of total payments, including any adjustments, being equal to 98 
percent of the amount of payments that would have been made during those fiscal years (for 
operating and capital costs) had the IRF PPS not been enacted.  As a result of the implementation 
of BIPA, a change has been made to eliminate the payment amount of 98 percent of the FY 2002 
expenditures.  Under 305 of the BIPA 2000, 1886(j)(3)(b) of the Act is amended to increase 
the amount of payment to 100 percent of FY 2002 expenditures.  
 
For the initial period of PPS, beginning on or after January 1, 2002, all payment rates and 
associated rules were published in the Federal Register on August 7, 2001.  For each succeeding 
fiscal year, the rates will be published in the Federal Register on or before August 1 of the year 
preceding the affected fiscal year.  
 
Case-Mix Groups 
 
In general, a case will be grouped into a Case-Mix Group (CMG) based on the clinical 
characteristics of the Medicare beneficiary. We used Rehabilitation Impairment Categories 
(RICs), functional measurements, age, and comorbidities to develop the CMGs.  Specifically, 
RICs are used to group cases that are similar in clinical characteristics and resource use.  The 
RICs are formed using codes from the International Classification of Diseases 9th Revision (ICD-
9s). In addition to the RICs, the CMGs are further partitioned using functional measures of 
motor and cognitive scores.  Age also allows us to improve the explanatory power of the CMGs 
if we split some of the groups based on this variable.  Lastly, comorbidites were found to 
substantially increase the average cost of specific CMGs.  The comorbidities are arrayed in three 
categories (or tiers) based on whether the costs are considered high, medium, or low.  If a case 
has more than one comorbidity, the CMG payment rate will be based on the comorbidity that 
results in the highest payment.   
   
 
  Case-Level Adjustments 
 
Payment will be based on the CMGs described above, as well as possible adjustments specific to 
the case and the facility characteristics.  Below, we first describe the case-level adjustments of 
the IRF PPS.  More than one case level adjustment may apply to the same case.  Thus, for ease 
of understanding we present the discussion of the case-level adjustments in the same order that 
will be used to assess whether or not they apply.  For instance, a case may be classified as a 
transfer, but may also receive additional payments because it meets the definition of an outlier 
case. 
 
Interrupted stays are defined as those cases in which a Medicare beneficiary is discharged from 
the inpatient rehabilitation facility and returns to the same inpatient rehabilitation facility within 
3 consecutive calendar days.  The 3 consecutive calendar days begin with the day of the 
discharge from the IRF and ends on midnight of the third day.  The length of stay for these cases 
will be determined by the total length of the IRF stay including the days prior to the interruption 
and the days after the interruption.  One CMG payment will be made for interrupted stay cases 
and the payment will be based on the initial assessment.  For example, if a Medicare beneficiary 
is discharged on February 1, 2001, and is readmitted on February 3, the case would be 
considered an interrupted stay and only one CMG payment will be made based on the initial 
assessment.  However, if the Medicare beneficiary was readmitted on February 4, then it would 
not be considered an interrupted stay. A separate DRG payment will not be made to the acute 
care hospital when the beneficiary is discharged and returns to the same IRF on the same day.  
However, a DRG payment can be made if the beneficiary does not return to the same IRF on the 
same day as they were discharged. If a case is determined to be an interrupted stay, other 
adjustments may apply to this payment amount.  For example, the case still may meet the 
definition of a transfer case described below. 
 
For the IRF PPS, transfer cases are defined as those in which a Medicare beneficiary is transferred to 
either another rehabilitation facility, a long term care hospital, an inpatient hospital, or a nursing 
home that accepts payment under either the Medicare program and/or the Medicaid program AND 
the length of stay of the case is less than the average length of stay for a given CMG.  The transfer 
policy consists of a per diem payment amount calculated by dividing the per discharge CMG 
payment rate by the average length of stay for the CMG. We will pay transfer cases a per diem 
amount and include an additional half day payment for the first day.  Transfer payments will be 
calculated by first adding the length of stay of the case to 0.5 (to account for the addition of the half 
day payment for the first day) and then multiplying the result by the CMG per diem amount. 
 
The IRF PPS also includes a payment adjustment for certain cases, such as short-stay cases (for 
cases that do not meet the definition of a transfer case).  A separate CMG payment (5001) will be 
made for cases with a length of stay of 3 days or less, without consideration of the clinical 
characteristics of the patient.  Further cases that expire with a length of stay of 3 days or less, 
will also be classified to CMG 5001. 
 
Separate CMGs will also be made for cases that expire with a length of stay greater than 3 days.  
To improve the explanatory power of the groups, we created four additional CMGs to account 
for cases that expire.  CMG 5101 will be used for short-stay, orthopedic, expired cases.  This 
CMG includes those cases that would otherwise be grouped to RICs 07, 08, and 09 and the 
length of the stay is greater than 3 days, but less than or equal to 13 days.  CMG 5102 will be 
used for orthopedic expired cases where the length of stay is greater than or equal to 14 days. 
CMG 5103 will be used for short-stay, non-orthopedic, expired cases.  This CMG includes those 
cases that would not be grouped to the orthopedic RICs and the length of the stay is greater than 
3 days, but less than or equal to 15 days.  CMG 5104 will be used for non-orthopedic expired 
cases where the length of stay is greater than or equal to16 days. 
 
 
 
   
 
  Facility-level Adjustments 
 
Facility-level adjustments apply to all cases and are based on the individual IRF characteristics.  
The facility-level adjustments include an area wage adjustment, an adjustment for facilitys 
located in rural areas, and an adjustment for treating low income patients.  Outlier payments will 
also be discussed in this section.  Although outlier payments are considered to be a case-level 
adjustment, a case can only be determined to qualify for these additional payments after all other 
facility-level adjustments are computed. Thus, for ease of understanding we present the 
discussion of these facility-level and outlier adjustments in the same order that will be used to 
assess their applicability. 
 
To adjust payments for area wage differences, we first identify the labor-related portion of the 
prospective payment rates.  The labor-related portion is 72.395 percent and the non-labor related 
portion is 27.605 percent. The labor-related unadjusted Federal payment is multiplied by a wage 
index value to account for area wage differences.  We are using the inpatient acute care hospital 
wage data to compute the wage indices.  The wage data excludes the wages for services provided 
by teaching physicians, interns and residents, and nonphysician anesthetists under Medicare part 
B,  
 
because these services are not covered under the IRF PPS.  The wage index that will apply to the 
IRF PPS payment rates excludes 100 percent of wages for teaching physicians, residents, and 
nonphysician anesthetists. IRFs will be divided into labor market areas.  As with other CMS 
payment systems, we define urban areas as a Metropolitan Statistical Area (MSA) or New 
England County Metropolitan Area, as defined by the Executive Office of Management and 
Budget.  For the purposes of computing the wage index for IRFs, the wage index values for 
urban and rural areas are determined without regard to geographic reclassification under 
1886(d)(8) or (d)(10) of the Act. 
 
Payments will be adjusted for facilities located in rural areas.  We will consider a facility to be a 
rural IRF if they are located in a non-MSA area.   
 
Additional payments will be made for treating low income patients (LIP). There are two parts in 
computing this adjustment.  The first, is the calculation of the disproportionate share variable 
(DSH).  This is computed by:  
 
  DSH =   SSI Days      +    Medicaid, Non-Medicare 
Days 
      Total Medicare        Total Days 
      Days 
 
Once the DSH is calculated, we use this percentage to determine the LIP adjustment as specified 
in the IRF PPS final rule. 
 
Additional payments will be made for those cases that are high cost outliers.  A case will be 
considered to be an outlier if the estimated cost of the case exceeds an adjusted threshold 
amount.  The estimated cost of the case will be calculated by multiplying the charge by the 
facility's overall cost-to-charge ratio obtained from the latest settled cost report.  If the estimated 
cost of the case is greater than the sum of the adjusted payment amount and the adjusted 
threshold amount, then the case is considered an outlier and additional payments will be added to 
the adjusted payment amount.  The outlier payment will be 80 percent of the difference between 
the estimated cost of the case and the outlier threshold (the sum of the facility-level adjusted 
CMG payment and the  threshold amount multiplied by the facility-level adjustments as 
described above). 
 
 
 
 
   
 
    Phase-In Implementation 
 
Under the BBA, the Federal fiscal year in which a facility's cost reporting period begins, determines 
which transition period percentages apply. The first transition period percentages are applicable for 
cost reporting periods beginning during Federal fiscal year 2001.  The second transition period 
percentages are applicable to cost reporting periods beginning during Federal fiscal year 2002, that 
is, periods beginning on or after October 1, 2001 and before October 1, 2002. For cost reporting 
periods beginning during Federal fiscal year 2003 and after, payment is based on 100 percent of the 
adjusted Federal prospective payment. 
 
Since we are implementing the IRF PPS for discharges that occur during the IRF's cost reporting 
period that begins on or after January 1, 2002, IRFs will be phased directly into the second 
transition period, where payment will be based on 66 2/3% of the PPS payment and 33 1/3% of 
the TEFRA payment.  A facility will continue to be paid under the TEFRA (reasonable cost-
based) system for its entire cost reporting period beginning prior to January 1, 2002. 
 
In addition, 305 of the BIPA 2000 states facilities may elect to be paid 100% PPS payment, 
rather than payment based on the transition method. If a facility chooses not to be paid under the 
transition method, they must notify their intermediary no later than 30 days prior to its first cost 
reporting period for which the IRF PPS applies to the facility.  The request to make the election 
must be made  
in writing to the Medicare fiscal intermediary for the facility.  The intermediary must receive the 
request on or before the 30th day before the applicable cost reporting period begins, regardless of 
any postmarks or anticipated delivery dates.  Requests received, postmarked, or delivered by 
other means after the 30th day before the cost reporting period begins will not be approved.  If 
the 30th day before  
 
 
the cost reporting period falls on a day that the postal service or other delivery sources are not 
open for business, the facility is responsible for allowing sufficient time for delivery of the 
request before  
the deadline.  If a facility's request is not received or not approved, payment will be based on the 
transition method.  
 
  Medicare Patient Assessment Instrument 
 
IRF PPS payment is contingent on the requirement that IRFs complete a patient assessment upon 
admission and discharge for Medicare patients.  The final rule contains detailed information 
regarding the assessment schedule for the patient assessment instrument (PAI) with respect to 
transmission requirements, encoding dates, and other pertinent information.  Further, we will 
provide an item-by-item guide, which will include detailed instructions regarding the manner in 
which each item on the assessment instrument needs to be completed. 
 
 
CLAIMS PROCESSING AND BILLING  
 
BILLING REQUIREMENTS UNDER IRF PPS 
 
Billing IRF PPS Services 
 
Effective with cost reporting periods beginning on or after January 1, 2002, IRFs are required to 
report billing data with a new revenue code and a Health Insurance PPS (HIPPS) Rate Code on 
Form HCFA-1450 (or electronic equivalent) for all Part A inpatient claims (Type of Bill 11X) to 
their intermediaries.  The Medicare A 837 Health Care Claim version 3051 implementations 
3A.01 and 1A.C1, along with the UB-92 version 6.0 are at 
http://www.hcfa.gov/medicare/edi/edi3.htm.  These formats are effective through October 16, 
2002.  The X12N 837 version 4010 (HIPAA) to UB-92 version 6.0 mapping is at 
http://www.hcfa.gov/medicare/edi/hipaadoc.htm.  The 837 version 4010 can be downloaded at   
 
  http://www.wpc-edi.com. The new revenue code, 0024, will be used in conjunction with the 
HIPPS Rate Code to identify the CMG group the beneficiary was classified into.  In addition to 
all entries previously required on a UB-92, the following additional instructions must be 
followed so you can accurately price and reimburse a claim under PPS. These claims must be 
submitted on Type of Bill 11X.  The last four digits of the provider number for rehabilitation 
hospitals is from 3025 to 3099, and for rehabilitation units the third digit will be a T. 
 
  The Revenue Code, Form Locator (FL) 42, (Record Type (RT) 60, field 5), (SV201), must 
contain revenue code 0024.  This code indicates that this claim is being paid under the PPS.  
This revenue code can only appear on a claim once.  
 
  The following Patient Status codes are applicable under the transfer policy for IRF PPS: 02,  
 03, 61, 62, and 63. 
 
  NOTE:  IRFs that transfer a beneficiary to a nursing home that accepts payment under 
Medicare and/or Medicaid should use PS 03, discharged/transferred to a SNF.  
IRFs that transfer a beneficiary to a nursing facility that does not accept Medicare 
or Medicaid, should code PS 04, discharged/transferred to an ICF, until such time 
that a new PS code is established to differentiate between nursing facilities that do 
not accept Medicare and/or Medicaid and those that do.  PS 04 does not constitute 
a transfer under the IRF PPS policy. 
 
  For typical cases, the HCPCS/Rates, FL44, (RT60, field 6), (SV202-2), must contain a five 
digit HIPPS Rate/CMG Code (AXXYY-DXXYY).  The first position of the code is an 
A,B,C, or D.  The HIPPS rate code beginning with A in front of the CMG is defined as 
without comorbidity.  The HIPPS rate code containing a B in front of the CMG is defined as 
with comorbidity for Tier 1.  The HIPPS rate code containing a C in front of the CMG is 
defined as with comorbidity for Tier 2.  The HIPPS rate code containing a D in front of the 
CMG is defined as with comorbidity for Tier 3.   The (XX) in the HIPPS rate code is the 
Rehabilitation Impairment Category (RIC).  The (YY) in the HIPPS rate code is the 
sequential numbering system within the RIC. 
 
 
  Covered Charges, FL47, (RT60, field 10), (SV203), should contain zero covered charges 
when the revenue code is 0024.  For accommodation revenue codes (010x-021x), covered 
charges must equal the rate times the units.  The IRF PRICER will calculate and return the 
payment  
 
amount for the line item with revenue code 0024.  Non-outlier payments will not be made 
based on the total charges shown in Revenue Code 0001. 
 
  IRF providers will submit one admit thru discharge claim for the stay.  Final PPS payment is 
based upon the discharge bill. 
 
  Should the patient's stay overlap the time in which the PPS applies to the facility, PPS 
payment will still be based on discharge.  If the facility submitted an interim bill, a 
debit/credit adjustment must be made prior to PPS payment.  If the facility submits multiple 
interim bills, the provider will need to submit cancels and then rebill once the cancels are 
accepted. 
 
  IRFs can submit adjustment bills (even to correct the CMG), but late charge bills will not be  
allowed  (Type of bill 115). 
 
  If a beneficiary has 1 day of Medicare coverage during their IRF stay, an entire CMG 
payment will be made.   
 
  IRFs will be paid under the IRF PPS beginning on the first day of their cost reporting period   
 
  that begins on or after January 1, 2002. 
 
Standard Systems/CWF Edits 
 
 
  To insure that revenue code 0024 is not reported more than once on bill type 11X; 
 
  To insure that revenue code 0024 is only on claims submitted by IRF providers. Bills 
submitted incorrectly will be returned to the provider.  
 
  To insure that a valid HIPPS/CMG rate code is always present with revenue code 0024; 
 
  Note: units entered on the 0024 must be accepted, but are not required. 
 
  To insure that revenue code total charges line 0001 must equal the sum of the individual total 
charges lines; 
 
  To insure that the length of stay in the statement covers period, from and through dates 
equals the total days for accommodations revenue codes 010x-021x, including revenue code 
018x (leave of absence)/interrupted stay; 
 
  To insure that Occurrence Span Code 74 FL36, (RT 40, fields 22, 24, 26), (2300 loop HI 
code BI), is present on the claim if there is an interrupted stay < 3 days.  If the interruption is 
greater than 3 days, the bill should be considered a discharge.  If the patient returns to the 
IRF by midnight of the 3rd day, the bill continues under the same CMG.  CWF will need to 
edit to ensure that if another IRF bill comes in during the interrupted stay, it is rejected, as it 
should be associated with the original CMG; and 
 
  If  HIPPS rate code is 5101, 5102, 5103, or 5104 patient status must be 20 (Expired). 
 
  The accommodation revenue code 018x, (RT 50, field 5), (SV201), (leave of absence) will 
continue to be used in the current manner including the appropriate UB92 occurrence span 
code, 74 (RT 40, field 22-27) and date range. 
 
 
 
 
 
Billing Ancillary Services Under IRF PPS 
 
When coding PPS bills for ancillary services associated with a Part A inpatient stay, the 
traditional revenue codes will continue to be shown in FL 42, e.g., 0250 - Pharmacy, 042x - 
Physical Therapy, in conjunction with the appropriate entries in Service Units, FL46 and Total 
Charges, FL47. 
 
  IRFs are required to report the number of units in FL 46 based on the procedure or service. 
 
 
  IRFs are required to report the actual charge for each line item, in Total Charges, FL 47. 
 
 
Benefits Exhausted--If a beneficiary's Part A benefits exhaust during the stay, code an 
occurrence code A3-C3 (RT 40, field 8-21), 2300 loop HI code BH).  If benefits are exhausted 
prior to the stay, submit a no pay claim which will be coded by the FI with no pay code B. 
 
NOTE:  For more information on outlier payments when benefits are exhausted, please 
visit http://www.hcfa.gov/pubforms/transmit/A991760.htm.  Although this   
 
  references an expired instruction specific to inpatient hospital PPS billing, the 
information presented provides important general information.  Should this 
situation occur in an IRF, IRF providers may apply this same type of logic and an 
IRF PC Pricer will be made available for assistance. 
 
IRF PRICER SOFTWARE 
 
CMS has developed an IRF PRICER Program that calculates the Medicare payment rate.  
PRICER will use a variety of inputs listed below to calculate the payment rate.   
 
Inputs to PRICER 
 
  Provider Specific File (Instructions for updating the provider specific data for IRF PPS will 
appear in Sections 3656.3 and 3850 of the MIM.) 
 
  Bill Data 
-Provider # 
-Patient Status 
-Payment Modification Flag (If condition code is 66, set flag "Y" otherwise use "N".) 
-Covered Charges 
-Discharge date 
-HIPPS/CMG Rate Code 
-Length of Stay (LOS) 
-Covered Days 
-Lifetime Reserve Days (LTR) 
 
PRICER returns the following information: 
 
  PPS Return Code 
  MSA 
  Wage Index 
  Average LOS 
  Relative Weight 
 
  Total Payment Amount 
  PPS Federal payment Amount 
  Facility Specific Payment Amount 
  Outlier Payment Amount 
  Low Income Payment (LIP) Amount 
  LOS 
  Regular Days Used 
  LTR Days Used 
  Transfer Percentage 
  Facility Specific Rate pre-blend 
  Standard Payment Amount 
  PPS federal amount pre-blend   
 
    Facility costs 
  Outlier threshhold 
  Submitted HIPPS/CMG code 
  PPS Pricer CMG code 
  Calculation version code 
 
The PRICER will be available electronically to the Standard Systems. 
 
Remittance Advices 
 
A new remittance advice remark code has been developed to notify an IRF when the CMG code 
has been changed: N100 PPS code corrected during adjudication. 
 
As with any new code, notify potential recipients of the code of its existence and meaning prior 
to initial use.  Continue to use existing reason and remark codes in your remittance advice 
transactions to explain other adjustments made to the claim during adjudication. 
 
Providers that receive version 3051.4A.01 of the Electronic Remittance Advice (ERA) will 
receive the CMG code under which payment is made in the service level procedure code field, 
identified with qualifier HC.  If the CMG is modified during adjudication, the paid under CMG, 
rather than the submitted CMG, will be reported at the service level.  Providers who begin to 
receive version 4010 of the ERA will have the CMG reported in the same location, but with 
qualifier ZZ.  Providers that receive earlier versions of the ERA, or who receive only paper RAs, 
will not receive service level details. 
 
Medicare Summary Notices and Notice of Utilization 
 
Continue to use existing notices for IRF for PPS coverage.  
 
 
 
 
 
The effective date for this PM is January 1, 2002. 
 
The implementation date for this PM is January 1, 2002. 
 
This PM may be discarded after January 1, 2003. 
 
These instructions should be implemented within your current operating budget. 
 
If you have any questions, contact Todd Smith (410) 786-1420.