GAO: Medicare risks overpaying for therapy at non-SNFs

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Medicare might save more money treating therapy patients at skilled nursing facilities and other long-term care settings instead of inpatient rehabilitation facilities, a report issued Friday by the Government Accountability Office suggests.

"Medicare is at risk of overpayment for individual patients in an IRF if patients are admitted who could be treated in a less intensive setting," according to the GAO report, entitled "Medicare: More Specific Criteria Needed to Classify Inpatient Rehabilitation Facilities."

Only 6% of IRFs in fiscal year 2003 were able to meet a 75% threshold, the GAO said. The "75% rule" phases in clinical criteria to distinguish between those patients who should undergo rehab in SNFs and those who would benefit from more expensive rehab in an IRF. 

Not coincidentally, nursing home providers praise the 75% rule, saying it could save taxpayers as much as $370 million per year – and send many more patients to an a skilled nursing facility or into home health care.