CMS: Results show 75% rule detractors have flawed reasoning

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A new governmental report reinforces the importance of the 75% rule, a good sign for long-term care providers. The new report also discredits an earlier hospital-industry supported paper that sought to undermine the rule amid lawmaker efforts to revise it.

Inpatient rehabilitation facility classification criteria "help to ensure that care is being furnished to Medicare beneficiaries in the appropriate settings," argues the Centers for Medicare & Medicaid Services report, which was sent to analysts and investment groups. A letter signed by Lambert van der Walde, capital markets advisor to the administrator, introduces the Nov. 30 report.

The 75% rule, which went into effect last summer, requires that IRFs have 75% of patients with at least one of 13 qualifying conditions to be classified as an IRF and therefore receive higher Medicare funding. The rule has generated more residents for skilled nursing facilities. While IRFs cost the government about $800 per patient day, reimbursement to nursing homes is closer to just $350 per day.

Earlier this year, the Moran Company released a report that said IRFs have turned away a vast number of patients because of the 75% rule. It based its findings on differences between CMS' May 2004 regulatory impact analysis and actual provider experience since July 2004. But according to the CMS report, the Moran report included assumptions that "are based on a misunderstanding of the purpose and scope of a regulatory impact analysis."

The CMS report continues: Five categories cited by the Moran Company that experienced lower IRF admissions between 2003 and 2005 are precisely those conditions that the 75% rule was expected to have an impact on "because they are not generally thought to require the intensive rehabilitation provided by IRFs."