Medicare IRF coverage rules: the 60 percent threshold, preadmission screening, the plan of care, and the IRF-PAI
CMS sets two different kinds of rules for inpatient rehabilitation facilities (IRFs). One is a facility rule: to be paid as an IRF, a facility must show that at least 60 percent of its inpatients needed intensive rehabilitation for one of 13 listed conditions. The other is a patient rule: Chapter 1 of the Medicare Benefit Policy Manual says each IRF stay must meet the coverage criteria in 42 CFR 412.622, whatever the condition. This page quotes CMS on the 60 percent threshold, preadmission screening, the overall plan of care, individualized therapy, measurable improvement, and the IRF-PAI. The basic criteria already quoted on working in inpatient rehab are not repeated. No payment rates are copied.
Quoted from official pages checked November 10, 2026. Confirm current requirements, fees, and dates on those sites. This page is not legal advice and does not guarantee eligibility, certification, or licensure.
Sources read on November 10, 2026: the Medicare Benefit Policy Manual, Chapter 1 – Inpatient Hospital Services Covered Under Part A (PDF; table of contents Rev. 10892, 08-06-21), sections 110 through 110.3; 42 CFR 412.29 and 42 CFR 412.622 on eCFR (up to date as of 11/06/2026); and CMS’s IRF-PAI and IRF-PAI Manual page (page last modified 09/28/2026).
What the IRF benefit is for
Section 110 states that the benefit is designed to provide “intensive rehabilitation therapy in a resource intensive inpatient hospital environment”. It adds: “The IRF benefit is not to be used as an alternative to completion of the full course of treatment in the referring hospital.” And: “Conversely, the IRF benefit is not appropriate for patients who have completed their full course of treatment in the referring hospital, but do not require intensive rehabilitation.”
For therapy itself, section 110 points to Chapter 15: “The policies in those sections describe a standard of care that should be consistent throughout the therapy disciplines, regardless of the setting of care.” Chapter 15’s plan of care and progress report rules are on Medicare therapy plans of care and Medicare progress reports.
The 60 percent threshold, a facility rule
42 CFR 412.29 sets the “Classification criteria for payment under the inpatient rehabilitation facility prospective payment system.” Paragraph (b)(1) states that, “for cost reporting periods beginning on or after July 1, 2005, the IRF served an inpatient population of whom at least 60 percent required intensive rehabilitation services for treatment of one or more of the conditions specified at paragraph (b)(2) of this section.”
The list in paragraph (b)(2) includes stroke, spinal cord injury, congenital deformity, amputation, major multiple trauma, fracture of femur (hip fracture), brain injury, neurological disorders, and burns, and also certain arthritis, vasculitis, osteoarthritis, and knee or hip replacement cases, each with conditions the regulation states. A patient admitted for another condition can count toward the threshold in some cases where a comorbidity on the list meets the regulation’s test.
Section 110 of the manual keeps that list apart from coverage of a single stay: IRF care is reasonable and necessary only if the patient meets 42 CFR 412.622(a)(3), (4), and (5), and “This is true regardless of whether the patient is treated in the IRF for 1 or more of the 13 medical conditions listed in 42 CFR § 412.29(b)(2) or not.”
Preadmission screening
Section 110.1.1 states that “a preadmission screening is an evaluation of the patient’s condition and need for rehabilitation therapy and medical treatment that must be conducted by licensed or certified clinician(s) within the 48 hours immediately preceding the IRF admission.” A screening done earlier is accepted if it is updated within those 48 hours, as the section describes.
The individualized overall plan of care
Section 110.1.3 states that information from the preadmission screening and “the assessments of all therapy disciplines involved in treating the patient and other pertinent clinicians, must be synthesized by a rehabilitation physician to support a documented overall plan of care.”
For therapy, it says: “The anticipated interventions detailed in the overall plan of care should generally include the expected intensity (meaning number of hours per day), frequency (meaning number of days per week), and duration (meaning the total number of days during the IRF stay) of physical, occupational, speech-language pathology, and prosthetic/orthotic therapies required by the patient during the IRF stay.” On timing: “the overall plan of care must be completed within the first 4 days of the IRF admission”.
Intensity of therapy, in the manual’s words
The regulation’s “3 hours” and “15 hours” standards are quoted on working in inpatient rehab. Section 110.2.2 adds that 3 hours a day, 5 days a week is the generally accepted standard, and: “However, this is not the only way that such intensity of services can be demonstrated”.
On the 15-hour option, the manual’s section 110.2 says “at least 15 hours of intensive rehabilitation therapy within a 7 consecutive calendar day period, beginning with the date of admission to the IRF.” The regulation, 42 CFR 412.622(a)(3)(ii), says “at least 15 hours of intensive rehabilitation therapy per week.” Both are left as written.
On evaluations: “Therapy evaluations are generally considered to constitute the beginning of the required therapy services.” On the mode of therapy: “The standard of care for IRF patients is individualized (i.e., one-on-one) therapy. Group therapies serve as an adjunct to individual therapies.” It adds: “In those instances in which group therapy better meets the patient’s needs on a limited basis, the situation/rationale that justifies group therapy should be specified in the patient’s medical record at the IRF.”
The manual also has a brief exceptions policy for an unexpected clinical event that limits participation “for a brief period not to exceed 3 consecutive days”, if the reasons are documented.
Measurable improvement
Section 110.3 states: “In general, the goal of IRF treatment is to enable the patient’s safe return to the home or community-based environment upon discharge from the IRF.” And: “For an IRF stay to be considered reasonable and necessary, the patient does not have to be expected to achieve complete independence in the domain of self-care or return to his or her prior level of functioning.”
The IRF-PAI
CMS’s IRF-PAI page states: “The Inpatient Rehabilitation Facility Patient Assessment Instrument (IRF-PAI) is the assessment instrument IRF providers use to collect patient assessment data for quality measure calculation and payment determination in accordance with the IRF Quality Reporting Program (QRP).” It says: “Completion of the IRF-PAI is required for each Medicare Part A fee-for-service and Medicare Part C patient discharged from an IRF.” The next sentence states: “As of October 1, 2024, completion of the IRF-PAI is required for all patients, regardless of payer.” The page also lists the IRF-PAI Manual, Version 4.4, effective October 1, 2026.
Section 110.1.5 of the manual says “the IRF patient assessment instrument (IRF-PAI) forms should generally be included in the patient’s medical record at the IRF (either in electronic or paper format).”
What this page does not do
It does not copy payment rates or case-mix figures, does not say whether any facility meets the 60 percent threshold, and does not say whether any stay is covered. It is not legal, billing, or compliance advice. Confirm current rules with the agency or organization that publishes them, your employer, and your state board.