Grassley budget aims to extend therapy cap moratorium, water down "75% Rule"

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The Senate Finance Committee plans to mark up a reconciliation budget package today, and numerous points could have significant impact for long-term care providers.

Last week, Republicans in the committee approved the package that would cut $10 billion from Medicaid and Medicare over five years.

One provision would extend a moratorium on Medicare therapy caps by another year. The $1,590 annual limits are set to be effective again in January if another moratorium is not passed. That's the good news for long-term care therapy providers.

Senate Finance Chairman Charles Grassley (R-IA), however, also wants to include a measure that would water down the "75% Rule." The proposal is to freeze the 75% threshold at 50% until June 30, 2007 -- and also allow inpatient rehabilitation facilities that aren't now at the 50% level a six-month grace period to get there. The percentage denotes the level of patients that must have one of 13 conditions in order for the facility to meet criteria to qualify as an inpatient rehabilitation facility (IRF), which receives higher Medicare payments than nursing facilities.

Another possible hit to providers: The bill includes a proposal from President Bush's fiscal 2006 budget that wouild reduce Medicare's reimbursement of skilled nursing facility bad debt from 100% to 70% of allowable costs.

Also included are longtime favorites of Grassley's: an incentive for consumers to buy long-term care insurance and the closure of certain asset-transfer loopholes for would-be Medicaid beneficiaries.