April 1 came and went without the launch of Medicare's new prospective payment system for inpatient rehabilitation care.
At deadline, HCFA had not set a date for the start of the new rehabilitation PPS, one of several prospective payment systems mandated by the Balanced Budget Act of 1997.
For a change, the affected providers didn't welcome an indefinite delay.
"We're like a horse at the starting gate. Once you know there is going to be a change, the sooner it comes the better," says Alan Henderson, chief executive officer of St. Louis-based RehabCare Group. "We've been waiting since summer 1997."
Things at HCFA haven't been standing still since then. The agency has been swamped by mandated new regulations-from the Medicare and Medicaid changes in the budget laws of 1997, 1999 and 2000 to the controversial medical privacy standards. The recent extension of the comment period for the privacy standards was another factor leading to the delay of the rehabilitation PPS, according to HCFA.
Unlike the provider lobbyists who have pushed for delays in Medicare's outpatient PPS and the privacy regulations, the healthcare industry welcomed HCFA's new rehabilitation PPS (Nov. 6, 2000, p. 6).
It is designed to replace the cost-based reimbursement system. The new system would set common payments for the treatment of 177 "patient condition" classifications. The PPS is intended to cut payments to providers by 2%, according to HCFA, which estimated late last year that the PPS would save Medicare $1.5 billion over seven years starting with fiscal 2001.
The proposed regulations implementing the new system were published in the Nov. 3, 2000, Federal Register, but notice of their indefinite delay and a final set of rules were not published in the Register. Notice of the delay appeared on the agency's Web site.
The giant of the rehabilitation industry, Birmingham, Ala.-based HealthSouth Corp., applauded the proposed rules. In a written statement issued when the proposed rules were published, Richard Scrushy, HealthSouth's chairman and CEO, said, "Under the proposed rules, we will have a chance for the first time to earn a margin on our Medicare inpatient rehabilitation business." HealthSouth owns 96 rehabilitation hospitals.
RehabCare's Henderson likes the idea behind the system-that efficient providers will be rewarded-but he also has criticisms. The company, which manages 135 inpatient and 66 outpatient programs, mostly for acute-care hospitals, reviewed the proposal's effects on its clients and concluded: "The best phrase that we can use is that it actually is rocket science," Henderson says. "This is a very, very complicated system."
Despite his concerns, Henderson is eager to see the PPS go into effect. He believes many hospitals are delaying decisions on expanding or opening rehabilitation units until it does. "It certainly would be welcome for our business to have this finalized and have an implementation day set so we can move on with our lives," he says.