Healthcare Business News

CMS' inpatient rehabilitation proposal hits hurdles

By Virgil Dickson
Posted: July 5, 2014 - 12:01 am ET

Hospitals and physicians are opposing a CMS proposal to further limit when Medicare will pay for inpatient rehabilitation services.

In order to qualify as an inpatient rehabilitation facility, at least 60% of its admissions must be tied to one or more of 13 medical conditions, including spinal cord injury, amputation, major multiple trauma, hip fracture and brain injury.

The intent of the 60% rule is to limit IRF services, which are reimbursed at significantly higher rates, to patients who truly require the more intensive setting.

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Providers that fall short of the threshold risk being paid acute-care rates, which can be as much as 49% lower, according to the Medicare Payment Advisory Commission.

Medicare payments to IRFs totaled about $6.46 billion in 2011, the last year a figure was released. There were 370,000 Medicare discharges from the facilities that year, down from 449,300 in 2005.

In recent years, the CMS has winnowed the array of diagnosis codes IRFs can cite when proving they are in compliance with the 60% rule. In last year's payment rule, the agency removed 259 codes deemed outdated or too vague to indicate that a patient requires inpatient rehabilitation care.

For fiscal 2015, the CMS is proposing to delete another 10 codes relating to amputation status and prosthetic fitting and adjustment.

“We believe it is impossible to determine, from the presence of such diagnosis codes alone, whether a patient with an amputation status or prosthetic fitting and adjustment needs has a condition for which he or she would qualify for treatment in an IRF,” the agency said in the rule. “Some patients with an amputation status or prosthetic fitting and adjustment needs will not require close medical supervision by a physician or weekly interdisciplinary team conferences to achieve their goals.”

The policy changes eliminating 259 codes from the 60% rule in the fiscal 2014 payment rule and the ones targeting another 10 in the proposed fiscal 2015 rule would all go into effect Oct. 1. Trade groups representing the facilities, though, say that dropping so many codes all at once would have negative consequences for patients and providers.

Linda Fishman, senior vice president of Public Policy Analysis & Development at the American Hospital Association, said in a comment letter to the CMS that the proposed rule would “further reduce access to IRF services for patients who would otherwise meet IRF admissions criteria.”

The CMS has clarified that patients with a deleted code may still be counted toward a facility's 60% rule compliance percentage if the cases hold up during an audit by a Medicare contractor.

The hospital association, however, argues that pursuing reviews “would result in increased administrative burden for hospitals and CMS alike, potentially significantly overloading Medicare contractors who would not be able to keep up with the workload.”

The American Medical Rehabilitation Providers Association, made up of rehabilitation hospitals, rehabilitation units of general hospitals and outpatient rehabilitation service providers, echoed the AHA's concerns.

Follow Virgil Dickson on Twitter: @MHvdickson

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