Stay ahead of the latest regulatory shifts and healthcare breaking news with Headlines from the Hill.
In this month’s edition you will find:
- Urgent Update: Texas IRF Review Choice Demonstration Begins March 2.
- Defending Hospital Care: The Case Against Site-Neutral Medicare Cuts.
Urgent Update: Texas IRF Review Choice Demonstration Begins March 2.
With the Texas choice selection period now closed as of February 13, all Inpatient Rehabilitation Facilities (IRFs) in the state must prepare for the March 2 official start of Review Choice Demonstration (RCD) claims reviews. While Texas enters this critical implementation phase in less than two weeks, California facilities should remain alert as their selection window opens next month on March 16.
RCD Expansion: Key Dates and Deadlines
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- For IRFs in Texas:
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- March 2, 2026: RCD reviews officially begin for all applicable Medicare FFS claims.
- Note: The choice selection period concluded on February 13. Facilities that did not make a selection have been automatically defaulted to Choice 2 (Postpayment Review).
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- For IRFs in California:
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- March 16 – April 14, 2026: Choice Selection period.
- May 1, 2026: RCD reviews officially begin.
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Who is Impacted?
All IRFs physically located in these two states who bill to Novitas Jurisdiction JH (Texas) or Noridian Jurisdiction JE (California) are subject to the RCD. If your facility is located in either state but bills to a different MAC or Jurisdiction (common for hospitals within larger systems using consolidated billing), you are not subject to the RCD during this phase. Reviews apply only to Medicare FFS claims; Medicare Advantage and other payers are excluded.
In partnership with AMRPA, Lifepoint continues to advocate for the termination of this demonstration. We will continue to provide regular updates and guidance as the RCD expansion progresses in both Texas and California.
Learn more on how to prepare for RCD in your state.
Defending Hospital Care: The Case Against Site-Neutral Medicare Cuts.
The proposed site-neutral Medicare cuts could significantly threaten patient access to 24/7 hospital care. The analysis examines policies modeled on Medicare Payment Advisory Commission (MedPAC) recommendations, finding that additional site-neutral cuts would compound existing pressures on hospitals already facing workforce shortages, rising drug and equipment costs, and growing uncompensated care. Lifepoint is monitoring the site-neutral policy closely and will advocate against further hospital cuts. Findings include:
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- “Site-neutral” Medicare cuts would result in a $182 billion cut to hospital payments over ten years, including a $26.3 billion cut to rural hospitals. This is equivalent to an 8% cut in Medicare payments for the average hospital.
- 770 hospitals would be at high risk of financial distress (defined as operating at a margin below -5%), and an additional 417 would be at risk of financial distress (defined as operating at a margin between 0 and -5%).
- Over one-third of rural hospitals would be at high risk of financial distress, and an additional 16% would be at risk.
- Among all hospitals currently providing maternity services, about 20% would be at high risk, and another 15% would be at risk.
- Among hospitals providing at least one of a broad group of mental health services, 23% would be at high risk of financial distress, and another 15% would be at risk.
- Among hospitals offering emergency services, nearly a quarter would be at high risk of financial distress, while another 14% would be at risk.
Impact on Post-Acute and Inpatient Rehabilitation
These cuts extend beyond the acute care setting; for Inpatient Rehabilitation Facilities (IRFs) acute rehabilitation units (ARUs), site-neutrality could force a transition to lower-cost settings that may lack the 24/7 physician supervision and intensive therapy required for complex recoveries. Moreover, as acute care margins compress, hospital-based rehabilitation units face a heightened risk of closure, potentially creating bottlenecks in patient discharge and reducing access to specialized, high-acuity rehabilitative care.
