The Centers for Medicare and Medicaid Services (CMS) recently proposed a new rule that would update payment rates and policies for inpatient rehabilitation facilities (IRFs). Under the proposed rule, payment to IRFs would increase by 3.3 percent. CMS projects that the payment revision will result in $6.3 billion of Medicare payments to IRFs in 2008, which would be an increase of $150 million from the amounts currently paid by Medicare to IRFs.
Additionally, the proposed rule continues the current phase-in period for the 75 Percent Rule. The 75 Percent Rule is important because it helps classify IRFs. In order to be excluded from the acute care inpatient hospital Prospective Payment Systems (PPS) and instead be paid under the higher IRF PPS, a hospital or a rehabilitation unit of an acute care hospital must meet the requirements for classification as an IRF. One criterion which Medicare uses for classifying a hospital or a unit of a hospital as an IRF is that a minimum percentage of the facility's total inpatient population must require intensive rehabilitation services for at least one of thirteen designated medical conditions. The minimum percentage was previously 75 percent, which is how the 75 Percent Rule received its name. In 2004, however, CMS temporarily lowered the compliance threshold and specified a transition period at the end of which IRFs will again have to meet a compliance threshold of 75 percent. Based on the current phase-in schedule, IRFs will be required to show that at least 75 percent of the facility's inpatient population requires services because of one of the designated conditions as of July 1, 2008. The proposed rule also revises the 75 Percent Rule to allow a patient's co-morbidity (a condition that is secondary to the patient's principal diagnosis) to be included in determining whether a particular facility met the minimum percentage requirement.
The full text of the proposed rule is available online at the CMS web site. CMS has requested comments on these proposals and is particularly interested in comments on whether to extend the phase-in period for the 75 Percent Rule. CMS will consider comments received by July 2, 2007 and will issue a final rule later this year.
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