Medicare Compliance & Reimbursement

Experts reveal the hidden fallout from CMS' recently proposed rule.

There's still a lot to hate about the Centers for Medicare & Medicaid Services' proposed "65-Percent" classification rule for inpatient rehab facilities, but hospital outpatient departments, skilled nursing facilities and comprehensive outpatient rehab facilities may find a silver lining in this dark cloud. Since CMS announced the rule, the following five points have become clear: 1. The new rule's not much different from the old "75-percent" rule. The new rule is still just a tool for the government to steer patients to lower-cost, less-intensive places for rehabilitation, contends Lyndean Brick, senior vice president at the Murer Group, a consulting firm in Joliet, IL. The government is denying that it is medically appropriate for patients without very specific, complex needs to receive treatment at inpatient rehab, she says - especially when you look at it in light of recent medical necessity reviews of inpatient rehab facilities. 2. The rule is flawed because it's not based on the 21 RICs. "This new rule leaves a lot of room for gray areas," says Ann Lambert Kremer, a health care consultant with Baker Newman & Noyes in Portland, ME. She contends that a rule based on the 21 Rehab Impairment Categories, or RICs, would be easier to understand and fairer to facilities and their patients. "A lot of providers are disappointed that the twelve conditions do not directly tie to the 21 RICs," Kremer says. Providers can still lobby to have the rule tied directly to the RICs, she adds, noting that the 65-percent rule was issued after CMS received 6,900 letters protesting the old 75- percent rule. CMS will accept comments on this proposed rule until November 3. 3. The new rule may push some rehab facilities out of business. If rehab units are "orthopedically driven," patients will not meet the admission criteria and some facilities "may not survive," Brick warns. The proposed 65-percent rule could shut down rehab providers, agrees Fred Perra, service line administrator for rehabilitation at Faxton-St. Luke's Healthcare in Utica, NY. Perra thinks the rule "disregards" basic rehab principles. Perra explains that his facility serves an older community, where cardiac interventions and joint replacements are common. "Neither one is in [the proposed rule]," he says. He estimates that his facility would wind up with about 30 to 40 percent of patients satisfying the conditions listed in the proposed rule - nowhere near the 65-percent requirement. If his facility does adjust to the rule, he adds, it will not meet the community's needs. Brick anticipates that smaller units may go out of business because they won't be able to adapt their management and business practices to apply the complex rule. 4. [...]