The Centers for Medicare & Medicaid Services on Monday released a proposed rule for the prospective payment system governing inpatient rehabilitation facilities, seeking to address criticism of the so-called "75 percent rule."
CMS offered the revised approach after extensive lobbying from organizations representing inpatient rehabilitation hospitals and units, which typically treat patients recovering from serious illnesses or injuries like strokes, spinal cord injuries, severe burns and amputations.
CMS revised the rule in response to statutory requirements in the Medicare, Medicaid and SCHIP Extension Act of 2007.
The agency said it will apply a freeze for payment rates to inpatient rehabilitation facilities for fiscal year 2009, which begins on Oct. 1, 2008. As a result, the agency expects to spend about $5.6 billion in fiscal 2009 for these types of services and about $30 billion over the next five years.
The American Hospital Association analysis of the proposed rule indicates that the fiscal 2009 rate must be based on the 2007 standard payment factor, resulting in a proposed standard payment of $13,034, which incorporates adjustments for the wage index, labor-related share and other updates.
The AHA said CMS is also proposing a budget-neutral re-weighting of the case-mix group relative weights. The CMS announcement said it is recalculating rates "using more recent information from rehabilitation hospitals about the costs they have incurred in treating patients."
"By improving the accuracy of payments for these services, CMS is moving closer to meeting its goal of transforming Medicare into a prudent purchaser of quality healthcare services," the announcement said.
The 75 percent rule enhancements include a permanent lowering of the compliance threshold to 60 percent for cost reporting periods beginning on or after July 1, 2006, and allowing certain comorbidities to count toward compliance with the 75 percent rule.
The 75 percent rule drew criticism because it placed requirements on treatment facilities in that a percentage of their patient populations had to have one of 13 specified qualifying conditions in order to receive payment under the inpatient rehab payment system.
CMS will accept comments from the public on the proposed rule until June 20, and will respond to the comments in a final rule to be published on or before August 1.