CMS proposes payment increase to lighten 75% rule's therapy impact

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The Centers for Medicare & Medicaid Services is proposing to increase payments to inpatient rehabilitation facilities by approximately $40 million in fiscal year 2007.

This would provide for a 3.4% update to IRF pay rates, based on the rehabilitation, psychiatric, and long-term care marketbasket (inflation index), CMS said. The rule is set to appear in the May 15 Federal Register.

The proposal also would include a gradual phase-in of the 75% rule. This policy change, which was mentioned in the Deficit Reduction Act passed earlier this year, would delay imposition of the 75% threshold by one year to 2008. When it takes effect, 75% of an IRF's patients must have one of 13 qualifying conditions for the facility to be classified as an IRF and receive more Medicare funds.

Those patients who don't meet one of the 13 criteria could be funneled to a skilled nursing facility, home healthcare arrangement or other setting that receives less Medicare funding for rehabilitation.