[Congressional Record (Bound Edition), Volume 149 (2003), Part 17]
[Senate]
[Pages 22787-22788]
[From the U.S. Government Publishing Office, www.gpo.gov]




              CMS' PROPOSED CHANGES TO THE 75 PERCENT RULE

  Mr. NELSON of Nebraska. Mr. President, I would like to express my 
concern with a proposed rule by the Centers for Medicare and Medicaid 
Services, CMS, that would threaten the ability of rehabilitation 
hospitals to continue to provide critical care.
  In my home State of Nebraska, Madonna Rehabilitation Hospital in 
Lincoln is a nationally recognized premier rehabilitation facility that 
offers specialized programs and services for those who have suffered 
brain injuries, strokes, spinal cord injuries, and other rehabilitating 
injuries. If this proposed rule goes into effect, Madonna would not be 
able to offer the same critical care to its patients as it currently 
does.
  When CMS first looked at whether facilities would qualify as an IRF, 
a list of criteria was created to determine eligibility. The current 
criteria, generally referred to as the 75 percent rule, were 
established in 1984 and have not been updated since then. To qualify as 
an IRF under the 75 percent rule, 75 percent of a facility's patients 
must be receiving treatment for one of 10 specified conditions. Because 
the rule has not been updated in almost 20 years, newer rehabilitation 
specialties are not reflected and, therefore, are not counted in 
determining facility compliance with the 75 percent rule.
  Since the 75 percent rule was implemented, IRFs have argued that the 
list of conditions should be expanded to reflect advances in modern 
rehabilitation medicine. The need for new rehabilitation specialties to 
treat cardiac, pulmonary, cancer, and other conditions was not even 
foreseeable when the 75 percent rule was implemented. Yet CMS has 
repeatedly refused to update the rule--even after implementing a 
payment system that specifically recognizes many more conditions than 
the 10 listed in the 75 percent rule.
  On September 9, 2003, CMS published proposed modifications to the 
outdated 75 percent rule. I commend CMS for recognizing the need to 
update the regulation. Unfortunately, I believe that the proposed 
changes do not go far enough and may have serious consequences for 
Medicare beneficiaries and other patients who need inpatient 
rehabilitative care.
  On its face, it appears that CMS expanded the rule by increasing the 
number of conditions from 10 to 12 and by lowering the percentage 
threshold from 75 percent to 65 percent. However, this ``expansion'' is 
illusory. The proposed rule will, by CMS's own estimate, reduce 
Medicare payments to IRFs by $223 million annually and shift hundreds 
of thousands of patients--both Medicare and non-Medicare--into 
alternative care settings that may be inappropriate.
  It is worth noting that Congress gave CMS a directive to implement 
the rehabilitation prospective payment system in a budget-neutral 
manner. Yet this rule--without any congressional directive--seriously 
cuts rehabilitation hospital funding.
  Although CMS expanded the number of conditions from 10 to 12, it did 
so by replacing one of the existing conditions--polyarthritis--with 
three new conditions that collectively are much more narrow than the 
original condition. CMS acknowledges that the industry historically has 
understood hip and knee replacement cases to fall within the definition 
of ``polyarthritis.'' Unfortunately, CMS now proposes to count joint 
replacement cases only if the patient has made no improvement after an 
``aggressive and sustained course of outpatient therapy.''
  This means that, instead of being directly transferred from an acute 
care hospital to an IRF, the patient will be forced into a skilled 
nursing facility, SNF, and/or outpatient therapy before being eligible 
for inpatient rehabilitation. IRFs would become a setting of last 
resort, and patients who might have returned to function after a brief 
IRF stay will be forced to endure weeks if not months, of therapy in 
other settings that may be inappropriate before being admitted to an 
IRF.
  CMS also proposes to lower the threshold from 75 percent to 65 
percent for a three-year period to give facilities time to come into 
compliance with the new criteria. Although this change is an 
improvement, it simply does not go far enough to prevent a significant 
negative impact on rehabilitation patients and providers.
  RAND data indicate that only about 25 percent of IRFs, at most, could 
meet a 65-percent threshold under the current list of 10 conditions. 
Since the proposed rule actually narrows the agency's interpretation of 
arthritis-related conditions, the percentage of facilities that could 
comply with the revised list of conditions is probably lower. This 
means that, even under a 65 percent standard, at least 75 percent of 
facilities will be deemed out of compliance if CMS finalizes the 
proposed rule.
  The proposed rule glosses over the negative impact that this dramatic 
shift will have on patients by assuming that all sites of care are 
equally effective and equally available. But I am very concerned about 
the impact that the proposed rule would have on patients living in 
rural areas, where alternative sites of rehabilitative care may be 
unavailable or highly inconvenient. Where SNF beds are scarce and few 
home health providers offer physical therapy services, these patients 
could be forced to travel long distances for daily outpatient care in a 
weakened state, risking reinjury and rehospitalization.
  Because compliance with the proposed rule will hinge on an IRF's 
total patient population, not just its Medicare population, CMS 
estimates that the proposed rule ``may have an effect'' on 
approximately 200,000 non-Medicare patients. CMS was not able to 
quantify or describe this effect because of inadequate information. In 
my opinion, it would be irresponsible to implement this rule without 
further studying its likely impact on Medicare beneficiaries, non-
Medicare patients, rehabilitation providers, and the Medicare Program.
  The Medicare Payment Advisory Commission, MedPAC, agrees that the 
rule needs to be updated. In a July 7, 2003, letter to CMS 
Administration Tom Scully, MedPAC Chair Glenn Hackburth proposed that 
CMS lower the threshold to 50 percent for at least a year to enable an 
expert panel of clinicians to reach a consensus on the diagnoses to be 
included in the 75 percent rule.
  I agree with MedPAC and worked with Senator Jim Jeffords to file an 
amendment to the Labor, Health and Human Services and Education 
Appropriations bill that would have implemented MedPAC's 
recommendations.
  I decided against offering my amendment for a vote, but I leave open 
the possibility of offering the amendment on another vehicle if CMS 
does not take appropriate action. I hope that the 75 percent rule can 
be updated to ensure that my constituents and all Americans continue to 
have access to

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necessary medical rehabilitation services.

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