SINCE JULY 1, 2004, HELENA Regional Medical Rehabilitation Center has turned away between 25 and 50 patients to ensure it didn’t lose a large portion of its Medicare funding.
The number of patients the 18-bed rehab center turns away is certain to grow as it, like other inpatient rehab facilities across the nation, on, complies with a controversial “75 percent rule” from the Centers for Medicare & Medicaid Services (CMS) in order to hold onto its higher Medicare payments.
The rule is designed to save tens of millions of Medicare dollars each year by rerouting patients to the lowest-cost setting adequate for treating their medical conditions, The rule calls for at least 75 percent of patients at inpatient rehabilitation facilities to be treated for one of 13 diagnoses, including stroke and amputation. The 75 percent threshold is being phased in over three years. In the first fiscal year, which ended June 30, the facilities only had to have 50 percent of their patients meet the diagnostic requirements. For the fiscal year that started last month, though, facilities must meet 60 percent. Starting July 1, 2007, it will be 75 percent.
And that is making inpatient rehab facility administrators nervous.
At the Helena rehab center, 60.25 percent of patients meet the CMS requirement, said Director Kevin Spears.
“You’re turning away a lot of patients,” he said.
Spears estimated the 18-bed facility lost between $500,000 and $1 million in revenue as a result of having to direct patients to other care providers.
The 75 percent rule, which has been on the books since 1984 but rarely enforced, could save Medicare $30 million in 2006 and $190 million in 2008 by directing patients into skilled nursing facilities rather than rehab hospitals.
A day of care in a skilled nursing facility averages about $550 less than a day of treatment ‘in an inpatient rehab facility, according to Steve Miller, senior director of legislative affairs for the American Health Care Association in Washington, D.C., which represents longterm care facilities. The rule should, therefore, bring additional patients and revenue to nursing homes.
But rehab facility administrators are hoping for relief. Legislation has been introduced that would delay the implantation of the rule for two years while Congress and the secretary of health and human services study it.
“I find it completely unacceptable that the Centers for Medicare & Medicaid Services has decided to suddenly hold struggling inpatient rehabilitation centers accountable for a rule that is over two decades old,” Rep. Marion Berry, D-Ark., said in a news release last week. “So much has changed in the fields of medicine over the past 20 years that we have a responsibility to re-evaluate our policies to make sure that they satisfy our goals for providing quality affordable health care.”
Berry is one of 48 co-sponsors of the House legislation that was introduced July 21. A similar bill is pending in the Senate.
But the nursing home industry, on the winning end of the CMS rule, is pleased with the 75 percent threshold and is pushing for it to remain.
“Implementing and enforcement [of] the 75 percent rule will help protect limited Medicare funds and ensure that our nation’s frail, elderly and disabled have access to critical rehabilitative services in the most appropriate care setting,” said Hal Daub, president and CEO of the American Health Care Association, in an April news release.
New Regulations
Inpatient rehab facilities have their own Medicare payment system separate from the ones used for regular hospitals or psychiatric hospitals.
In 2004, the estimated Medicare per-case payment for a patient who had major joint and limb replacement of lower leg was $17,135 to an inpatient rehab facility and $6 $6,165 165 to a skilled nursing facility, according to a Government Accountability Office report released in April.
In 2002, CMS realized its 75 percent rule that had been on the books since, 1984 wasn’t being evenly enforced.
“The 75 percent rule has been around since (1984), what we’re discovering because CMS has never audited on it, … a lot of (rehab facilities) were playing games with the numbers and never actually meeting the 75 percent rule,” Miller said. “And now CMS has decided to crack down on it.”
CMS added three more medical conditions that an inpatient rehab facility could treat to reach the 75 percent threshold.
But that didn’t satisfy the inpatient rehab industry.
“Well, medical practice has changed over the past 20-25 years,” said Paul Cunningham, senior vice president of the Arkansas Hospital Association. “So if that goes into effect, rehab hospitals will have a very difficult time in meetmg those qualifications.”
Cunningham said it’s going to be “almost impossible” to hit the 75 percent mark and “we could see rehab hospitals basically shut down.”
At the Helena Regional Medical Rehabilitation Center, Spears said more marketing will be, done to attract patients that meet one of CMS’ approved 13 medical conditions.
That still might not be enough.
The GAO report said only 6 percent of inpatient rehab facilities were able to meet a 75 percent mark in fiscal year 2003.
“Our analysis of Medicare data shows that there are Medicare patients in (inpatient rehabilitation facilities) who may not need the intensive level of rehabilitation services these facilities offer,” the report said.
Baptist Medical
Baptist Health Rehabilitation Institute in Little Rock has had to deny services to about 200 patients since January, said Greg Crain, vice present of patient services and the administrator at the facility.
“We deliver excellent care, but the rule is going to limit our ability to do so,” Crain said.
Crain said he didn’t know how many patients were going to be turned away this year as a result of the new rules. And it was hard to predict how much revenue the rehab hospital will lose as a result.
For 2003, the latest numbers that were available, the rehab hospital had $55.2 million in patient revenue with $5.5 million in net income. St. Vincent Rehabilitation Hospital in Sherwood had $22 million ‘in patient revenue with $2.2 million in net income in 2003.
Baptist Health’s rehab facility sees about 2,000 patients annually, Crain said.
Crain said physicians at rehab facilities now will have more of a burden to make sure their patient falls within one of the 13 categories the CMS listed for approved treatments.
Crain also said there aren’t any studies to show which type of facility provides the best level of care.
“The government by this rule has really rationed health care for this group of patients,” Crain said. “It’s not a logical rule. It’s just based on numbers, not on individual patients’ illnesses.”
Skilled Homes
A vast majority of the patients who wouldn’t qualify to be treated in rehabilitation facilities will probably end up in skilled nursing centers, said the American Health Care Association’s Miller.
Miller said that across the country inpatient rehab facilities are saying they have lost about 40,000 patients over the previous year as a result of the 75 percent rule.
“Which means those patients are either being seen in a skilled nursing facility or a long-term care hospital or being seen at home,” Miller said.
The skilled nursing facilities, the industry Miller represents, stands to see a lot more patients – and to save Medicare a lot of money.
“That’s the key,” he said. “That’s what CMS is saying: ‘Why are we paying $550 more a day for the exact same patient in the exact same services just because they happen to be in a different setting?'”
Miller said inpatient rehab facilities serve the purpose of taking highintensity patient cases and nursing them back to health.
“The problem is they’ve been cherry-picking patients who don’t belong there,” Miller said.
Copyright Arkansas Business Aug 01, 2005
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