C.F.R. » Title 42 » CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES › SUBCHAPTER B—MEDICARE PROGRAM › PART 412—PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES › Subpart P—Prospective Payment for Inpatient Rehabilitation Hospitals and Rehabilitation Units

42 C.F.R. § 412.620

Patient classification system

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(a) Classification methodology. (1) A patient classification system is used to classify patients in inpatient rehabilitation facilities into mutually exclusive case-mix groups.

(2) For purposes of this subpart, case-mix groups are classes of Medicare patient discharges by functional-related groups that are based on a patient's impairment, age, comorbidities, functional capabilities, and other factors that may improve the ability of the functional-related groups to estimate variations in resource use.

(3) Data from admission assessments under § 412.610(c)(1) are used to classify a Medicare patient into an appropriate case-mix group.

(4) Data from the discharge assessment under § 412.610(c)(2) are used to determine the weighting factors under paragraph (b)(4) of this section.

(b) Weighting factors—(1) General. An appropriate weight is assigned to each case-mix group that measures the relative difference in facility resource intensity among the various case-mix groups.

(2) Short-stay outliers. We will determine a weighting factor or factors for patients that are discharged and not transferred (as defined in § 412.602) within a number of days from admission as specified by us.

(3) Patients who expire. We will determine a weighting factor or factors for patients who expire within a number of days from admission as specified by us.

(4) Comorbidities. We will determine a weighting factor or factors to account for the presence of a comorbidity, as defined in § 412.602, that is relevant to resource use in the classification system.

(c) Revision of case-mix group classifications and weighting factors. We may periodically adjust the case-mix groups and weighting factors to reflect changes in—

(1) Treatment patterns;

(2) Technology;

(3) Number of discharges; and

(4) Other factors affecting the relative use of resources.

Notes of Decisions
Cited in 2 cases (1 in the last 5 years), 2019–2023 · leading case: Chumba v. Kiehl (D. Kan. 2023).
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Chumba v. Kiehl (D. Kan. 2023). “See generally 42 C.F.R. §§ 412.620 , 624. These factors include geographical differences in area wage levels, proportion of low-income patients at the IRF, whether IRF is located in a rural area, whether the IRF is a teaching hospital, and patient classifications to a case-mix…”
United States of Am. v. Fazzi Assocs., Inc. (S.D. Ohio 2019). “at ¶ 27); see also 42 C.F.R. § 412.620 (a)(3). Medicare payments for home-health services are distributed via a “prospective payment system,” with an initial payment made based on an estimated cost of services rendered during a standard sixty-day “episode of care.”
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