Despite objections from providers and Congress, it appears unlikely that the CMS will back down from its proposal to change the way inpatient rehabilitation facilities are reimbursed.
With changes in rehabilitation payments set to take place in about a month, the healthcare industry and lawmakers are engaging in a massive campaign to get the CMS to reconsider, saying the new rules would jeopardize patient access to such facilities and put many of them out of business.
But industry insiders report that the CMS has given no indication it is willing to re-evaluate its proposal, and it may take an act of Congress to stop the regulatory change from being implemented on Jan. 1, 2004, as planned.
The CMS made its proposal public in September. Since then, a firestorm of protest has quickly mounted, culminating in two Oct. 31 letters signed by nearly 300 members of Congress and sent to HHS Secretary Tommy Thompson and CMS Administrator Tom Scully, asking them to reconsider (Nov. 10, p. 4). As of Nov. 12, the CMS had processed 700 individual comments and 3,000 form letters on the rehabilitation payment change.
Under the proposal, a hospital would qualify for Medicare rehabilitation reimbursement if at least 65% of its patients were diagnosed with at least one of 12 medical conditions requiring intensive rehabilitation. Currently, a hospital needs 75% of its patients to have one of 10 qualifying conditions: amputations, arthritis, brain injury, burns, congenital deformities, hip fractures, major multiple trauma, neurological conditions, spinal cord injury or stroke.
"While we agree that changes to the outdated `75% rule' are desperately needed ... the proposal does not go far enough, leaving out important components and turning a blind eye to significant changes in rehabilitative care," said a letter to Thompson and Scully signed by 218 members of the House.
While the CMS wants to make changes in the qualifying conditions, it has not taken into account new medical procedures that didn't exist 20 years ago when the 75% rule was created, providers argue. For example, 20 years ago, organ transplants and some cardiac care were still in their infancy. Today, such procedures are routine, but needed rehabilitation is not covered by Medicare because it is not listed among the eligible conditions.
"This is a 20-year-old rule that needs to be modernized," said Don May, vice president of policy at the American Hospital Association. "They didn't do any modernization. If anything, they made it worse."
The period for public comment on the issue ended Nov. 3. A spokesperson at the CMS said the agency is forbidden by law to talk specifically about steps it is taking concerning the regulatory change but added that if its proposal is not implemented on Jan. 1 as planned, it will start enforcing the current regulations again. A moratorium was placed on the regulations in June 2002 amid concerns about how fiscal intermediaries were interpreting them and deciding whether hospitals were in compliance with regulations. Some hospitals, the CMS determined, may have been incorrectly deemed to be in compliance with the rules while others may have been incorrectly deemed noncompliant.
In the letters from Congress, lawmakers suggested that the CMS lower the threshold to 50% from 75% while allowing the Institute of Medicine to study what diagnoses should be included as qualifying medical conditions. These proposals are similar to recommendations by Glenn Hackbarth, the chairman of the Medicare Payment Advisory Commission.
"If the 75% rule is not updated to more accurately reflect the types of patients who can benefit from inpatient rehabilitation, rehabilitation facilities in our states could be forced to unnecessarily deny care to hundreds of thousands of patients," said a letter signed by 75 senators.
Even before the CMS proposed its change, lawmakers in both chambers of Congress had introduced bills seeking to expand the list of eligible conditions. Neither of two bills on the topic has emerged from committee consideration.
"While I still hope CMS will change the rule without legislative action, I withhold the right to offer this bill as an amendment to an appropriate legislative vehicle in the future to get this done," Sen. Ben Nelson (D-Neb.) told Modern Healthcare. Nelson is a co-sponsor of the Senate bill introduced in June. On the House side, a bill by Rep. Frank LoBiondo (R-N.J.) introduced in May has 90 co- sponsors so far, and "if the right thing doesn't happen as a result of our letter, I believe we would have success pumping up the number of co-sponsors," LoBiondo said.
The only change the CMS has proposed to the list of qualifying conditions is the removal of "polyarthritis" as a category, to be replaced by three groups of conditions that "more precisely identify the types of arthritis-related ailments appropriate for care in a rehabilitation facility," according to the CMS. Polyarthritis generally means joint inflammation involving many joints.
That one change, however, could have a profound effect on rehabilitation hospitals, providers said. Taking polyarthritis off the list means hip and knee joint replacements would no longer be reimbursable unless a patient underwent a failed course of aggressive and sustained outpatient therapy before being admitted to an inpatient rehabilitation hospital. And for many rehab centers, providers said, that would be a death knell because they rely financially on joint replacement therapies.
Overall, 13% of the 1,400 rehabilitation facilities across the country are now in compliance with the proposed regulations, said Ken Aitchison, chairman of the prospective payment system task force for the American Medical Rehabilitation Providers Association (AMRPA). The industry generates about $8 billion in revenue annually. According to a survey done by the AMRPA and the AHA in October, 94% of responding providers said the CMS' proposal would force them to turn patients away, while 23% said the proposal would force them to close.
Also, 69% said they would have to cut staff, 56% said they would have to reduce the number of beds and 54% said they would need to cut services.
At the George M. Piersol Inpatient Unit at the Hospital of the University of Pennsylvania, Richard Zorowitz, the medical director, said the regulatory change could have profound effects.
"We have a lot of patients who under the new rules would clearly be affected and probably would not be able to come into rehab as easily ... it would mean probably downsizing our unit or even closing it," he said.