Medicare Compliance & Reimbursement

How does a 65-percent rule sound?

Struggling inpatient rehabilitation facilities may be able to qualify for the IRF prospective payment system after all. After an outcry from IRFs on what it takes to be eligible to receive payments under the IRF PPS - industry groups maintained that the strict criteria outlined in the Centers for Medicare & Medicaid Services' 75-percent rule could rule out virtually every IRF in the country - CMS is proposing some changes. As it stands now, the 75-percent rule requires IRFs to demonstrate that 75 percent of its inpatient population requires intensive rehab services for at least one of 10 specified conditions over the previous year. CMS' proposal to change the rule would: reduce the 75-percent threshold to only 65 percent; increase the number of qualifying conditions to 12 by deleting polyarthritis and adding three more narrowly tailored types of arthritic conditions;  allow patients whose primary diagnosis wouldn't qualify under the 12 conditions to count toward the 65 percent if they have a serious secondary condition that fits into the group of 12; and establish an "administrative presumption" that if a facility's Medicare population complies with the 65 percent rule, its total population also complies. However, it appears that CMS plans to jack the compliance percentage back up to 75 percent by 2007 if not before, and also to eventually phase out the use of secondary medical conditions to determine compliance. CMS suspended enforcement of the 75-percent rule because it worried that it was being enforced inconsistently. Enforcement of the new rule will pick up again once CMS finalizes it. 

"Because we have decided to take a second look at the 75-percent rule, we will be instructing our fiscal intermediaries to refrain from enforcing the rule until the revised rule becomes effective," says CMS chief Tom Scully. "But the rule remains extremely important in separating inpatient rehab hospitals from other types of inpatient facilities, and ensuring that Medicare pays for patients who are getting intensive rehabilitation in the most appropriate setting." The rule will be published in the Sept. 9 Federal Register.