Final Criteria for Medicare
Rehabilitation Facilities Published
May 7, 2004 - The Centers for Medicare and Medicaid
Services (CMS) April 30 issued the long-awaited final
rule revising the classification criteria (commonly known
as the "75 percent rule") that determines whether
a facility is considered an inpatient rehabilitation facility
under Medicare. This designation, which is applicable to both
rehabilitation hospitals and distinct-part units of acute
care hospitals, is important because those entities are paid
under Medicare's rehabilitation prospective payment system
(PPS), rather than the inpatient acute care PPS. The final
rule will be effective for cost reporting periods beginning
on or after July 1, 2004.
Of key interest, the final rule temporarily reduces the
percentage of total patients whose diagnoses are required
to fall within one of a specified list of medical conditions.
Currently at 75 percent, for cost reporting periods between
July 1, 2004 and June 30 2005, the percentage is lowered to
50 percent. The threshold rises to 60 percent the year after,
then 65 percent in the third year. The percent will revert
to 75 percent in 2007 unless additional regulatory action
is taken. The final rule percentages are lower than CMS's
original proposal, which was a reduction to 65 percent for
a three-year period. The final rule also provides that a hospital
that meets the percentage threshold based on its Medicare
patient population will receive an "administrative presumption"
that the facility's total population meets the threshold.
The final rule also modifies the list of specified conditions
for the patient percentage requirement. Currently 10 conditions,
under the final rule, polyarthritis would be eliminated and
replaced by four conditions that CMS believes more precisely
identify the types of arthritis-related illnesses appropriate
for inpatient rehabilitation care. Given the controversy surrounding
these conditions, CMS will be convening a research panel to
assist the agency in developing studies to help identify the
appropriate clinical conditions for care in rehabilitation
facilities.
Information:
Karen Fisher, Sr. Director, Health Care Affairs
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
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