CMS makes few changes in final 75% rule despite numerous protests

Providers in shock over final version  

The Centers for Medicare & Medicaid Services (CMS) promised to take a fresh look at the 75% rule when it released the proposed changes to the rule in September. A coalition of rehab providers said it hoped that the fresh look would incorporate at least some of the changes it says are necessary to save the future of inpatient rehabilitation facilities (IRF).

But even after an overwhelmingly negative response to the proposed rule from the rehab field, the final rule released April 30 was not significantly different from the proposal. Changes include an expansion of the definition of polyarthritis and a three-year transition period that lowers the 75% threshold to 50% for the first year. The number of patients who must have one of the 13 qualifying medical conditions for the facility to qualify for Medicare reimbursement as an IRF rises to 60% for the second year, and 65% for the third year. The rule, which takes effect July 1, is available at

"Frankly, I’m personally frustrated at the failure of CMS to modernize a 20-year-old rule. When I got that rule, I was in shock that little had changed," says Greg Crain, vice president of Baptist Health Rehabilitation Institute in Little Rock, AR. "I felt like the field had given massive amounts of feedback that we were treating more people than this 20-year-old rule allowed us to do. As a frontline caregiver, I’m very frustrated that they won’t listen to the advances in cardiac care and in pulmonary care that have been made," he says.

"We get 400 to 500 people a year who have debility because they’re living longer with a cardiac or pulmonary disease. Common sense dictates that those are appropriate rehab patients. There’s a real disconnect between the rule and the real-life provision of care," Crain explains.

The rule replaces the term polyarthritis with four arthritis-related medical conditions. For example, CMS now will count toward the threshold a patient who has severe or advanced osteoarthritis involving two or more major joints and who meets other outlined medical criteria. The proposed rule had required three or more joints to be affected. The final rule also will count patients who undergo knee or hip joint replacement during an acute hospitalization immediately preceding the IRF stay if they also meet one or more of three other conditions in the rule.

During the three-year transition period, CMS will monitor the impact the revised criteria have on utilization and patient access to rehabilitation services. CMS also plans to promote a research program to assess the efficacy of rehabilitation services in various settings.

"This research would be intended to provide objective, outcomes-oriented answers with respect to the best way to identify those patients who most need the intensive medical rehabilitation resources provided by an IRF," CMS announced in a press release. "The research would also help identify the most frequent conditions that typically require the intensive rehabilitation treatment available only in IRFs. Based on the findings of this research, CMS may revise the qualifying medical conditions or other coverage criteria as appropriate."

If no further action is taken, the compliance percentage will rise again to 75% for cost-reporting periods beginning on or after July 1, 2007.

Carmela Coyle, the American Hospital Associa-tion’s (AHA) senior vice president for policy, said in a statement to AHA members that the time for such a research panel was before the release of a final rule, not after. "Further study is needed to ensure the rule is based on an appropriate clinical foundation and does not yield harmful consequences for patients," she said. "We will continue to seek a legal resolution to protect patients’ access to care."

Other steps taken by CMS in the final rule include:

  • Establishing an administrative presumption that if the facility’s Medicare patient population complies with the rule, the facility’s total population complies.
  • Counting toward the new percentage threshold patients whose principal diagnoses match one of the 13 qualifying medical conditions as well as those who have a secondary medical condition that matches. The secondary condition must cause a significant decline in the patient’s functioning that would require intensive rehabilitation treatment even without the admitting condition.
  • Changing the period of time to review patient data to determine compliance from the most recent 12-month cost-reporting period to the most recent, appropriate and consecutive 12-month time period.

According to CMS, the final rule will allow for appropriate reimbursement as well as improved access to inpatient rehab services. "In developing this final rule, we have tried to make sure our payment system is accurate and promotes access to high quality inpatient rehabilitation services for beneficiaries who need them," said Mark B. McClellan, MD, PhD, CMS administrator, in a press release.

"Based on extensive public comments, we have modified a number of provisions in the proposed rule, and will continue to work with the beneficiary and provider communities to ensure access to high-quality rehabilitation services," he added.

That’s not the way some rehab advocates see it. "While the temporary reduction in the threshold and the reduction in the number of qualifying joints for osteoarthritis patients are helpful, the final rule clearly shows that the administration didn’t hear the stop-study-modernize message sent by Congress and the field through extensive communication," says Rochelle Archuleta, the AHA’s senior associate director for policy.

The Medicare prescription drug bill signed into law in December included language that directs delayed implementation and further analysis of the 75% rule.

"As a result, access to care for Medicare beneficiaries will be threatened, even under the temporary reduction to a 50% threshold, and especially in subsequent years," Archuleta says. "Despite the restructuring of the polyarthritis definition, the reality is that very few additional patients will count under the final rule’s four arthritis-related categories. In practice, the 75% rule conditions under the final rule are substantially the same conditions authorized 20 years ago."

The AHA supports the idea of a research panel but fears the language concerning that idea is too vague in the rule, she notes. "We strongly urge CMS to commit to authorizing the Institute of Medicine to convene an independent panel of experts in medical rehabilitation to establish a clinical consensus on whether and how to modify the 75% rule qualifying conditions and whether and how to modify the national medical necessity guidelines," she says.

If nothing changes, the rule has the potential to create problems for the whole health care delivery system, adds Crain of Baptist Health.

"CMS has created a potential for a huge logjam. I don’t believe there’s capacity in many areas of the nation in nursing homes and acute-care facilities for this rule to be carried out the way CMS intends it to be," he says. "I think patients are going to stay in medical-surgical beds longer. That’s going to back up critical care patients who are waiting for those beds and, ultimately, emergency departments are going to suffer.

"Common sense tells you this is an unworkable plan. I personally am deeply disturbed by the ethical implications of the 75% rule. It puts rehab facilities in the terrible position of rationing health care on a first-come, first-serve basis," Crain explains. "I can say, Today, I can admit you and treat you, but if you come in tomorrow with the same condition, the government says I can’t admit you.’ If you’re approved to treat a diagnosis, you should be able to treat it and not set some arbitrary limit."

He says the positive aspect of the final rule is the temporary reduction of the threshold to 50%. "That was a big thing for the field. Also, they did pledge to convene a research panel, and that at least gives us hope to get a reasonable rule. One of my big concerns is who makes up that panel. I want to make sure we get people from the front lines, people who are credible in rehab to say, Let’s debate the issue of what is appropriate to being an inpatient rehab facility.’

"I don’t have any problem discussing and debating what is and is not appropriate," Crain says. "What I have issue with is when they take the standard of care and try to change that without any scientific proof. Rehab is very attuned to outcomes, and we’ve got to be willing to debate those issues. But let’s do it the right way."

The American Medical Rehabilitation Providers Association (AMRPA) has been one of the leaders in the fight against the 75% rule. Like the AHA, the AMRPA was disappointed in the final rule, says Carolyn Zollar, vice president for government relations.

In a statement on the final rule, the AMRPA expresses concern that Medicare beneficiaries may lose access to care. "AMRPA perceives that there is very little relief to the field and beneficiaries under this final rule. We believe that in the long run, there will be large-scale denial of access as facilities will be compelled to revise their admission policies to comply with the rule’s requirements," the statement said.

The AMRPA also took issue with CMS’ apparent lack of response to congressional directives, as well as CMS’ assertion "that the lack of scientific evidence to support IRF care for patients justifies their exclusion." The statement added, "There is overwhelming evidence that IRFs care for significantly more patients than those defined by the limited number of diagnostic categories proposed by CMS. It is clinically unconscionable to limit medical practice by narrowly delineating the conditions without compelling evidence to argue against current standards of medical practice."

Need more information?

Rochelle Archuleta, Senior Associate Director, American Hospital Association. Phone: (202) 638-1100. E-mail:

Greg Crain, Vice President, Baptist Health Rehabilitation Institute, 9601 Interstate 630, Exit 7, Little Rock, AR 72205. Phone: (501) 202-7008.

Carolyn Zollar, Vice President for Government Relations, American Medical Rehabilitation Providers Association, 1710 17th St. NW, Washington, DC 20036. Phone: (888) 346-4624.