This proposed rule would 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 proposed rule would also update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for Federal fiscal year 2012 (for discharges occurring on or after October 1, 2011 and on or before September 30, 2012) as required by the Social Security Act (the Act). 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 proposing to consolidate, clarify, and revise 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 proposing to amend 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.

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