The Centers for Medicare and Medicaid Services (CMS) issued draft proposed rules on April 22 governing the Medicare prospective payment system for inpatient rehabilitation facilities (IRFs). These include 200 freestanding rehabilitation hospitals and 1,000 rehabilitation units in general hospitals throughout the United States. IRF designation means that over 60 percent of patients in the unit are being treated for severe conditions such as stroke, traumatic brain injury, or spinal cord injury. The new rules include many proposed adjustments in the case-mix group (CMG) per diem amounts for IRFs beginning in October 2011 as well as proposed quality of care reporting requirements based on section 3004 of the Affordable Care Act (ACA). Each IRF’s reported quality of care data will be made public by CMS for comparative evaluation by medical professionals and consumers. IRFs that do not begin to report the required data by October 2012 will face a two percent reduction in Medicare payments beginning in October 2013. CMS is proposing three specific quality of care measures (catheter-associated infections, pressure ulcers, and risk-adjusted readmission rates) for IRFs based on estimated frequency, cost to Medicare, and mortality resulting from such complications. CMS is inviting comments on the proposed measures, which are based on findings and recommendations of the National Quality Forum (NQF). Comments on the proposed rules are due June 21. A final rule is expected by August 1.