Medicare: More Specific Criteria Needed to Classify Inpatient Rehabilitation Facilities
Highlights
Medicare classifies inpatient rehabilitation facilities (IRF) using the "75 percent rule." If a facility can show that during 1 year at least 75 percent of its patients required intensive rehabilitation for 1 of 13 specified conditions, it may be classified as an IRF and paid at a higher rate than is paid for less intensive rehabilitation in other settings. Medicare payments to IRFs have grown steadily over the past decade. In this report, GAO (1) identifies the conditions--on and off the list--that IRF Medicare patients have and the number of IRFs that meet a 75 percent threshold, (2) describes IRF admission criteria and Centers for Medicare & Medicaid Services (CMS) review of admissions, and (3) evaluates use of a list of conditions in the rule. GAO analyzed data on Medicare patients (the majority of patients in IRFs) admitted to IRFs in FY 2003, spoke to IRF medical directors, and had the Institute of Medicine (IOM) convene a meeting of experts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Centers for Medicare & Medicaid Services | To help ensure that IRFs can be classified appropriately and that only patients needing intensive inpatient rehabilitation are admitted to IRFs, the CMS Administrator should ensure that fiscal intermediaries routinely conduct targeted reviews for medical necessity for IRF admissions. |
Closed – Implemented
On August 3, 2007, CMS reported that 13 fiscal intermediaries have approved local coverage determinations regarding IRFs and that reviews have been conducted by Recovery Audit Contractors in 3 states.
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| Centers for Medicare & Medicaid Services | To help ensure that IRFs can be classified appropriately and that only patients needing intensive inpatient rehabilitation are admitted to IRFs, the CMS Administrator should conduct additional activities to encourage research on the effectiveness of intensive inpatient rehabilitation and the factors that predict patient need for intensive inpatient rehabilitation. |
Closed – Not Implemented
On August 3, 2007, CMS reported that to promote research that better identifies the types of patients whose treatment requires an IRF setting, CMS collaborated with several crucial stakeholders. Working with the National Center for Medical Rehabilitation Research (NCMRR) and the National Institute of Child Health and Human Development at the National Institutes of Health, a panel was convened in February 2005 to develop a research agenda. The NCMRR issued a notice on the need to enhance the evidence base (http://grants.nih.gov/grants/guide/notice-files/NOT-HD-07-005.html). CMS also reported that they have been participating in various NIH panel discussions to foster research. CMS also reported that it has analyzed available data to assess the impact of the 75 percent rule (http://www.cms.hhs.gov/InpatientRehabFacPPS/Downloads/IRF_PPS_75_percent_Rule_060807.pdf)
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| Centers for Medicare & Medicaid Services | To help ensure that IRFs can be classified appropriately and that only patients needing intensive inpatient rehabilitation are admitted to IRFs, the CMS Administrator should use the information obtained from reviews for medical necessity, research activities, and other sources to refine the rule to describe more thoroughly the subgroups of patients within a condition that are appropriate for IRFs rather than other settings, and may consider using other factors in the descriptions, such as functional status. |
Closed – Not Implemented
On August 3, 2007, CMS reported that the 75 percent rule will be refined in the future, but enforcement was resumed after GAO's report was issued.
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