Healthcare Business News

CMS moving forward with pay changes for rehab despite opposition

By Paul Demko
Posted: July 31, 2014 - 10:45 pm ET

Despite opposition from hospitals, the CMS is moving forward with a proposal to further restrict when Medicare will pay for inpatient rehabilitation services. But those changes won't be implemented until Oct. 1, 2015, according to a final rule issued by the agency on Thursday.

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, such as spinal cord injury, amputation or brain injury. The intent of the 60% rule is to limit IRF services, which typically are reimbursed at significantly higher levels than services at acute-care facilities, to patients who truly require the more-intensive setting.

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In recent years, the agency has reduced 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 In last year's payment rule, the agency removed 259 codes deemed outdated or too vague to indicate that a patient requires such intensive care. For 2015, the CMS is deleting another 10 codes relating to amputees.

“As Medicare payments for IRF services are generally significantly higher than Medicare payments for similar services provided in acute-care hospital settings, we believe that it is important to maintain and enforce the criteria for medical conditions that may be counted toward an IRF's compliance calculation for the 60% rule to ensure that the higher Medicare payments are appropriately allocated to those providers that are providing IRF-level services,” the rule issued Thursday states.

Medicare payments to IRFs totaled about $6.5 billion in 2011, the last year a figure was released. Under the final rule, payments to such facilities will increase by $180 million in fiscal 2015, a bump of 2.4%, according to the CMS.

The coding changes were overwhelmingly opposed by hospitals in comments to the agency. They expressed concern, in particular, that hospitals will have to undergo burdensome administrative reviews in order to be properly reimbursed for their services.

“IRFs that treat a broad range of clinical conditions will be at particular risk for triggering additional cumbersome medical review, and IRFs may find it necessary to modify their admission criteria to ensure compliance and avoid additional review,” wrote Alyssa Keefe, vice president for federal regulatory affairs at the California Hospital Association. “This circumstance could lead to the denial of patients who meet medically necessary criteria but do not fall into the 'right' diagnostic category.”

Follow Paul Demko on Twitter: @MHpdemko

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