Medicare Compliance & Reimbursement

New rehab rule will set off a scramble among HHAs, SNFs and other facilities.

The Centers for Medicare and Medicaid Services is moving full steam ahead with the so-called 75-percent rule in the wake of a flurry of reports on its impact on the rehabilitation industry.

CMS suspended the rule's enforcement in January, pending a study by the Government Accountability Office of clinically appropriate inpatient rehab facility classification criteria. The rule requires that 75 percent of the patients in an inpatient rehabilitation hospital be treated for one of ten CMS-specified conditions, but many rehab organizations say the list of ten conditions is outdated and should include knee and hip replacements, which have become more commonly performed services at IRFs.

The GAO released its study in late April, recommending that CMS identify subgroups within the diagnosis groups specified in the May 7, 2004, final rule as counting toward the compliance threshold. These subgroups would better identify patients that appear to need an IRF level of care, based upon research and review of IRF cases.

But CMS says it already has been taking the steps the GAO recommended and argues that "the expended classification criteria for IRFs are not inconsistent with the recommendations in the GAO report," according to a notice published June 24 in the Federal Register.

Therefore, CMS will begin enforcing the classification criteria outlined in the final rule.

Close on the heels of the GAO's April report on the 75-percent rule came the Medicare Payment Advisory Commission's own analysis of the rule's impact on joint replacement patients. Under the rule's classification criteria, many knee- or hip-replacement patients no longer will receive therapy from an IRF.
 
Instead, these patients will have longer acute hospital stays or will be discharged to other settings, such as home health agencies, skilled nursing facilities and outpatient facilities, MedPAC predicts.

A panel of orthopedic surgeons told MedPAC "that patients who have had a hip or knee replaced ideally should go home with either home health care or outpatient
therapy services - between 50 percent and 85 percent of their Medicare patients go home from the hospital in two to four days following surgery," the report says.

Some IRFs already have stopped accepting joint replacement cases in light of the 75-percent rule, MedPAC reports. That means HHAs, SNFs and outpatient providers are in a position to receive more of these patients than ever before - and that opportunity will increase as the compliance threshold increases to the full 75 percent.