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The Centers for Medicare and Medicaid Services (CMS) has proposed a 3.3% increase in the standard per stay payment to inpatient rehabilitation facilities (IRFs) for FY2008 [PDF, 1.8MB]. IRF administrators found this to be good news because they had been expecting a proposed increase of approximately 1%. The increase represents an approximate average increase per facility of $121,500. IRFs include rehabilitation units of acute care hospitals as well as freestanding facilities. The increase for each rural freestanding facility will be approximately 25% above the rate for urban units and facilities. On average, rural hospitals, including IRFs, tend to have fewer cases, longer lengths of stay, and a higher average cost per case.
As required by the Deficit Reduction Act of 2005, the 75% rule will be fully in place as of July 1, 2008. The phase-in reaches 65%, effective July 1, 2007. The rule allows CMS to disqualify a facility from participation in the Medicare program if, annually, less than 65% of its discharges do not fall within one of 13 diagnoses/conditions. However, many disability, consumer, and hospital groups are advocating against further implementation of the 75% rule, stating the level of rehabilitative care an individual requires cannot be determined based on diagnoses alone. The advocates state that the rule acts as an inappropriate quota system and results in denials of necessary inpatient rehabilitative care for many individuals with disabilities or injuries. Legislation has been introduced in both the House and Senate (H.R. 1459 and S. 543) that would freeze further implementation of the 75% rule at the current level of 65%.
CMS says that the purpose of the 75% rule is to ensure that patients are placed in provider settings that are cost-efficient as well as appropriate for one's individual care needs. Patients not accepted for admission to an IRF would be admitted to a skilled nursing facility with rehabilitation emphasis or other sub-acute settings. ASHA opposes the 75% rule because the percentage demarcation was not derived from a comprehensive analysis of discharge data. Also, as mentioned above, the level of rehabilitative care that is necessary cannot be determined solely from a patient's diagnosis. CMS stresses that an IRF has the ability to admit 25 percent of its patients unencumbered by the 75% rule.
A CMS memorandum, "Inpatient Rehabilitation Facility PPS and the 75 Percent Rule [PDF]," was released on June 8, 2007, with new data to illustrate that the ongoing implementation of the 75% rule continues to ensure that the most appropriate Medicare beneficiaries have access to care in IRFs. The CMS proposal was published in the Federal Register on May 8, 2007 [PDF, 1.8MB]. For further information, please contact Mark Kander, ASHA's Director of Health Care Regulatory Analysis, at mkander@asha.org or 800-498-2071, ext. 4139.
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