As the CMS implemented its final regulations last week on when to clas-sify hospitals as inpatient rehabilitation facilities, momentum gathered for legislative action to block its enforcement.
On July 1, changes to the so-called "75% rule" went into effect. The regulations determine which facilities receive inpatient rehabilitation rates-which are higher than Medicare payments for general acute-care hospital services. Among the changes was the elimination of polyarthritis from a list of 10 qualifying conditions and the addition of four other arthritis-related conditions, as well as post-surgical care for certain joint replacements.
The CMS also relaxed the timeframe within which a facility has to meet the 75% threshold required to receive the higher reimbursement. As of July 1, 50% of a hospital's patients will have to have at least one of 13 conditions for the facility to qualify for rehabilitation rates. Over the next three years that figure will rise incrementally until it reaches 75% in 2007.
As the changes took effect, industry critics pledged an all-out legislative effort to have it rescinded. "We're going to try to overturn the regulations," said Carmela Coyle, senior vice president of policy at the American Hospital Association. "Our reaction is that the final rule was a temporary postponement" to the CMS' original proposal made in September 2003. Though no bills have been proposed to rescind the regulations, the AHA plans to continue speaking with legislators to push for one, she said.
"The final rule issued in (April) does not solve the problem of access to inpatient rehabilitation for patients who need it and can benefit from it," said Mary Beth Walsh, medical director and chief executive officer of Burke Rehabilitation Hospital in White Plains, N.Y. Burke and others from the industry met with members of Congress in June to discuss the industry's worries. "What has to happen now is for Congress to legislate a moratorium while a study is designed and carried out to help define which patients are appropriately, cost-effectively cared for in which post-acute-care setting."
No promises came out of those meetings, however, Walsh said.
Last year Sen. Ben Nelson (D-Neb.) and Rep. Frank LoBiondo (R-N.J.) introduced legislation to expand the list of qualifying conditions, but neither bill made it out of committee. A spokesman for Nelson said that he has been trying to work with the CMS to iron out issues related to the 75% rule but had not heard back from the CMS or HHS in response to a June 17 letter; that letter, which expressed opposition to the regulations, was sent to HHS Secretary Tommy Thompson and CMS Administrator Mark McClellan and was signed by more than 80 senators.
As the July 1 implementation date drew nearer, David DiMartino, Nelson's spokesman, said that if the senator's concerns were not addressed, he would push for legislation to enact change. "The senator is prepared to do that," DiMartino said.
The new regulations represent the CMS' second attempt in the past year to update the 75% rule. Last September, the CMS announced its original revisions to the rule, which had been suspended since June 2002 because of concerns that fiscal intermediaries were deeming some hospitals to be in compliance when in fact they weren't and vice versa.
Originally, the proposal was to bring the threshold down to 65% and replace polyarthritis with three groups of conditions that "more precisely identify the types of arthritis-related ailments appropriate for care in a rehabilitation facility," the CMS said in the fall. That proposal sparked letters from Congress asking the CMS to lower the threshold to 50% while allowing the Institute of Medicine to study what diagnoses should be included in the set of qualifying clinical conditions. Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission, had made similar recommendations.
The CMS had planned to implement those revisions in January, but amid concerns the agency delayed implementation to make further changes. Despite the revisions announced in April, providers and lawmakers continued to voice their opposition and as July 1 approached, the CMS faced intense lobbying pressure.
"We continue to believe that additional information must be gathered and an autonomous analysis must be conducted before the 75% rule is re-implemented," said a June 21 letter signed by 250 members of the House.
However, Bill Pierce, an HHS spokesman, said that further postponing the implementation was not feasible. "To not implement a final rule is unprecedented," said Pierce, adding "HHS will get back to (the legislators) to address their concerns."
Providers said that even with the change in the qualifying diagnoses, the list remains antiquated, leaving out many new procedures that are becoming commonplace. When the list of qualifying conditions was first created, transplants and cardiac care were less common, said Paul Rao, a vice president at the 141-bed National Rehabilitation Hospital in Washington, D.C. But today, the two conditions, which are not among the 13 qualifying diagnoses, make up about 10% of his hospital's patient load.
"We think CMS still has some homework to do," he said.
Walsh said that 150-bed Burke Hospital would have to reject about 567 patients it had treated in 2003 to meet the 50% threshold under the new regulations. To comply with the rule change, hospital administrators are considering not seeing patients who have conditions that are excluded from the 13 conditions, such as certain pulmonary, orthopedic or cardiac care.
"Operationally we're not sure what we are going to do," she said.