Medicare: More Specific Criteria Needed to Classify Inpatient
Rehabilitation Facilities (16-JUN-05, GAO-05-825T).
Medicare classifies inpatient rehabilitation facilities (IRF)
using the "75 percent rule." If a facility can show that during a
12-month period at least 75 percent of its patients required
intensive rehabilitation for 1 of 13 listed conditions, it may be
classified as an IRF and paid at a higher rate than for less
intensive rehabilitation in other settings. Because this
difference can be substantial, it is important to classify IRFs
correctly. GAO was asked to discuss issues relating to the
classification of IRFs, and in April 2005 it issued a report,
Medicare: More Specific Criteria Needed to Classify Inpatient
Rehabilitation Facilities (GAO-05-366). For that report, GAO
analyzed data on all Medicare patients (the majority of patients
in IRFs) admitted to IRFs in fiscal year 2003, spoke to IRF
medical directors, and had the Institute of Medicine (IOM)
convene a meeting of experts to evaluate the use of a list of
conditions in the 75 percent rule. This testimony is based on the
April 2005 report.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-05-825T
ACCNO: A26779
TITLE: Medicare: More Specific Criteria Needed to Classify
Inpatient Rehabilitation Facilities
DATE: 06/16/2005
SUBJECT: Data collection
Eligibility criteria
Eligibility determinations
Health care facilities
Health statistics
Medical services rates
Medicare
Policy evaluation
Evaluation criteria
Inpatient care services
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GAO-05-825T
* Background
* Fewer Than Half of All IRF Medicare Patients in 2003 Were Ad
* IRFs Vary in the Criteria Used to Assess Patients for Admiss
* Experts Differed on Adding Conditions to List in Rule but Ag
* Concluding Observations
* Contact and Staff Acknowledgments
* Order by Mail or Phone
Testimony
Before the Subcommittee on Health, Committee on Ways and Means, House of
Representatives
United States Government Accountability Office
GAO
For Release on Delivery Expected at 1:00 p.m. EDT
Thursday, June 16, 2005
MEDICARE
More Specific Criteria Needed to Classify Inpatient Rehabilitation
Facilities
Statement of Marjorie Kanof
Managing Director, Health Care
GAO-05-825T
Madam Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss our report entitled Medicare:
More Specific Crieria Needed to Classfy Inpatien Rehabilation Facilies,1
which was issued in April 2005. Over the past decade, both the number of
inpatient rehabilitation facilities (IRF)2 and Medicare payments to these
facilities have grown steadily. In 2003, there were about 1,200 such
facilities. Medicare payments to IRFs grew from $2.8 billion in 1992 to an
estimated $5.7 billion 2003 and are projected to grow to almost $9 billion
per year by 2015.
Because patients treated at IRFs require more intensive rehabilitation
than is provided in other settings, such as an acute care hospital or a
skilled nursing facility (SNF),3 Medicare pays for treatment at an IRF at
a higher rate than it pays for treatment in other settings. The difference
in payment to IRFs and other settings can be substantial, and so IRFs need
to be correctly classified to be distinguished from other settings in
which less intensive rehabilitation is provided.
To distinguish IRFs from other settings for payment purposes and to ensure
that Medicare patients needing less intensive services are not in IRFs,
the Centers for Medicare & Medicaid Services (CMS) relies on a regulation
commonly known as the "75 percent rule."4 This rule states that if a
facility can show that during a 12-month period at least 75 percent of all
its patients, including its Medicare patients, required intensive
rehabilitation services for the treatment of at least 1 of the 13
conditions listed in the rule,5 it may be classified as an IRF. The rule
allows the remaining 25 percent of patients to have other conditions not
listed in the rule. IRFs are required to assess patients prior to
admission to ensure they require the level of services provided in an IRF,
and CMS is responsible for evaluating the appropriateness of individual
admissions after the patient has been discharged through reviews for
medical necessity conducted under contract by its fiscal intermediaries.6
An IRF that does not comply with the requirements of the 75 percent rule
may lose its classification as an IRF and therefore no longer be eligible
for payment by Medicare at a higher rate.7
1See GAO, Medicare More Specific Criteria Needed to Classfy Inpatient
Rehabilitation Faciities, GAO-05-366 (Washington, D.C.: Apr. 22, 2005).
2IRFs are intended to serve patients recovering from medical conditions
that require an intensive level of rehabilitation. Not all patients with a
given condition may require the level of rehabilitation provided in an
IRF. For example, although a subset of patients who have had a stroke may
require the intensive level of care provided by an IRF, others may be less
severely disabled and require less intensive services.
3In addition to IRFs, acute care hospitals, and SNFs, other settings that
provide rehabilitation services include long-term-care hospitals,
outpatient rehabilitation facilities, and home health care.
4See 42 U.S.C. S:1395ww(d)(1)(B) (2000). The 75 percent rule was initially
issued in 1983 and most recently revised in 2004. See 42 C.F.R.
S:412.23(b)(2) (2004).
5For an annotated list of these conditions, see appendix I.
IRF compliance with the rule has been problematic, and some IRFs have
questioned the requirements of the rule. CMS data indicate that in 2002
only 13 percent of IRFs had at least 75 percent of patients in 1 of the 10
conditions on the list at that time. IRF officials have contended that the
list of conditions in the rule should be updated because of changes in
medicine that have occurred and the concomitant expansion of the
population that could benefit from inpatient rehabilitation services.
The Conference Report that accompanied the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 directed us to issue a report,
in consultation with experts in the field of physical medicine and
rehabilitation, to assess whether the current list of conditions
represents a clinically appropriate standard for defining IRF services
and, if not, to determine which additional conditions should be added to
the list.8 In this testimony, I will discuss our April 2005 report, in
which we (1) identified the conditions-on and off the list-that IRF
Medicare patients have and the number of IRFs that meet the requirements
of the 75 percent rule; (2) described how IRFs assess patients for
admission and whether CMS reviews admission decisions; and (3) evaluated
the approach of using a list of conditions in the 75 percent rule to
classify IRFs.
6Fiscal intermediaries are contractors to CMS that verify compliance with
the rule and conduct reviews for medical necessity to determine whether an
individual admission to an IRF is covered under Medicare.
7In addition to the 75 percent rule, an IRF must meet six regulatory
criteria showing that it had (1) a Medicare provider agreement; (2) a
preadmission screening procedure; (3) medical, nursing, and therapy
services; (4) a plan of treatment for each patient; (5) a coordinated
multidisciplinary team approach; and (6) a medical director of
rehabilitation with specified training or experience. IRFs must also meet
other criteria identified in 42 C.F.R. S:412.22 (2004) and 42 C.F.R.
S:412.25 (2004).
8See H.R. Rep. 108-391, at 649 (2003).
In carrying out our work, we analyzed data from the Inpatient
Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI) records on
all Medicare patients (the majority of patients in IRFs) admitted to IRFs
in fiscal year 20039 (the most recent data available at the time). The
IRF-PAI records contain, for each Medicare patient, the impairment group
code10 identifying the patient's primary condition and the diagnostic code
from the International Classification of Diseases, Ninth Revision,
Clinical Modification (ICD-9-CM) identifying the patient's comorbid
condition (if any).11 We used these codes to determine whether we
considered the patient's primary or comorbid condition to be linked to a
condition on the list in the rule.12 We also spoke to 12 IRF medical
directors, 10 fiscal intermediary officials, and contracted with the
Institute of Medicine (IOM) of the National Academies to convene a 1-day
meeting of 14 clinical experts in physical medicine and rehabilitation to
evaluate the approach of using a list of conditions in the 75 percent
rule. We conducted our work from May 2004 through April 2005 in accordance
with generally accepted government auditing standards.
In brief, as noted in the report, in fiscal year 2003 fewer than half of
all IRF Medicare patients were admitted for having a primary condition on
the list in the 75 percent rule. Almost half of all patients with
conditions not on the list were admitted for orthopedic conditions, and
among those the largest group was joint replacement patients. The experts
IOM convened told us that uncomplicated unilateral joint replacement
patients rarely need to be admitted to an IRF, and our analysis suggested
that relatively few of the Medicare unilateral joint replacement patients
had comorbid conditions that suggested a possible need for the IRF level
of services. Additionally, we found that only 6 percent of IRFs in fiscal
year 2003 were able to meet a 75 percent threshold. We also found that
IRFs varied in the criteria used to assess patients for admission, using
patient characteristics such as functional status, as well as condition.
We noted that CMS, working through its fiscal intermediaries, had not
routinely reviewed IRF admission decisions to determine whether they were
medically justified, although it reported that such reviews could be used
to target problem areas. The experts IOM convened and other clinical and
nonclinical experts we interviewed differed on whether conditions should
be added to the list in the 75 percent rule. The experts IOM convened
questioned the strength of the evidence for adding conditions to the
list-finding the evidence for certain orthopedic conditions particularly
weak-and some of them reported that little information was available on
the need for inpatient rehabilitation for cardiac, transplant, pulmonary,
or oncology patients. They called for further research to identify the
types of patients that need inpatient rehabilitation and to understand the
effectiveness of IRFs. There was general agreement among all the groups of
experts we interviewed that condition alone is insufficient for
identifying appropriate types of patients for inpatient rehabilitation,
since within any condition only a subgroup of patients require the level
of services of an IRF, and that functional status should also be
considered in addition to condition.
9We analyzed the 2003 data using the 13 conditions in the current
regulation even though in fiscal year 2003 there were 10 conditions on the
list. Effective July 1, 2004, the number of conditions increased from 10
to 13.
10The impairment group code identifies the medical condition that caused
the patient to be admitted to an IRF, and its sole function is to
determine payment rates. As a result, the impairment group codes describe
every patient in an IRF and include medical conditions that are on the
list in the rule as well as those that are not on the list since IRFs may
treat patients with conditions not on the list. In contrast, the list of
conditions in the rule describes the patient population that is to be
treated in an IRF to ensure that a facility is appropriately classified to
justify payment for the level of services furnished.
11As used in this report, a primary condition is the first or foremost
medical condition for which the patient was admitted to an IRF, and other
medical conditions may coexist in the patient as comorbid conditions, or
comorbidities.
12Throughout this testimony, the "list in the rule" refers to the list of
13 conditions as specified in the 2004 75 percent rule, and when we say
that condition is on (or off) the list, we mean that we have (or have not)
been able to link the condition as identified in the patient assessment
record to a condition on the list in the rule.
We concluded that if condition alone is not sufficient for determining
which types of patients are most appropriate for IRFs, more conditions
should not be added to the list at the present time and the rule should be
refined to clarify which types of patients should be in IRFs as opposed to
another setting. As noted in the report, we recommended that CMS ensure
that targeted reviews for medical necessity are conducted for IRF
admissions; conduct additional activities to encourage research on IRFs;
and refine the 75 percent rule to more clearly describe the subgroups of
patients within a condition that are appropriate for IRFs, possibly using
functional status or other factors in addition to condition. CMS generally
agreed with our recommendations.
Background
The 75 percent rule was established in 1983 to distinguish IRFs from other
facilities for payment purposes. According to CMS, the conditions on the
list in the rule at that time accounted for 75 percent of the admissions
to IRFs. In June 2002 CMS suspended the enforcement of the 75 percent rule
after its study of the fiscal intermediaries revealed that they were using
inconsistent methods to determine whether an IRF was in compliance and
that in some cases IRFs were not being reviewed for compliance at all. CMS
standardized the verification process that the fiscal intermediaries were
to use, and issued a rule-effective July 1, 2004-that increased the number
of conditions from 10 to 13 and provided a 3-year transition period,
ending in July 2007, to phase in the 75 percent threshold.13
The current payment and review procedures for IRFs were established in
recent years. The inpatient rehabilitation facility prospective payment
system (IRF PPS) was implemented in January 2002. Payment is contingent on
an IRF's completing the IRF-PAI after admission and transmitting the
resulting data to CMS. Two basic requirements must be met if inpatient
hospital stays for rehabilitation services are to be covered: (1) the
services must be reasonable and necessary, and (2) it must be reasonable
and necessary to furnish the care on an inpatient hospital basis, rather
than in a less intensive facility, such as a SNF, or on an outpatient
basis.14 Determinations of whether hospital stays for rehabilitation
services are reasonable and necessary must be based on an assessment of
each beneficiary's individual care needs. Beginning in April 2002, the
fiscal intermediaries, the entities that conduct compliance reviews, were
specifically authorized to conduct reviews for medical necessity to
determine whether an individual admission to an IRF was covered under
Medicare.15
13During the transition period, the threshold increases each year (from 50
percent to 60 percent to 65 percent) before the 75 percent threshold is
effective. The transition period also allows a patient to be counted
toward the required threshold if the patient is admitted for either a
primary or comorbid condition on the list in the rule. At the end of the
transition period, a patient cannot be counted toward the required
threshold on the basis of a comorbidity on the list in the rule.
14Rehabilitative care in a hospital, rather than a SNF or on an outpatient
basis, is considered to be reasonable and necessary when a patient
requires a more coordinated, intensive program of multiple services than
is generally found outside of a hospital (Medicare Benefit Policy Manual,
chapter 1, Section 110.1).
15Prior to this time, Quality Improvement Organizations had this
authority. CMS Transmittal 21 made clear that fiscal intermediaries have
the authority to review admissions to IRFs.
Fewer Than Half of All IRF Medicare Patients in 2003 Were Admitted for
Conditions on List in Rule, and Few IRFs Were Able to Meet a 75 Percent
Threshold
As we reported in April 2005, among the 506,662 Medicare patients admitted
to an IRF in fiscal year 2003, less than 44 percent were admitted with a
primary condition on the list in the 75 percent rule. About another 18
percent of IRF Medicare patients were admitted with a comorbid condition
that was on the list in the rule. Among the 194,922 IRF Medicare patients
that did not have a primary or comorbid condition on the list in the rule,
almost half were admitted for orthopedic conditions, and among those the
largest group was joint replacement patients whose condition did not meet
the list's specific criteria. (See figure 1.)
Figure 1: Distribution of IRF Medicare Patients Who Did Not Have Condition
on List in Rule, by Condition as Defined by Impairment Group, Fiscal Year
2003
aIncludes joint replacement patients who had a unilateral procedure and
those who were under age 85 and therefore did not meet two of the three
specific criteria for joint replacements set out in the 75 percent rule.
(See app. I.) Codes from CMS for the third criterion-body mass index-were
not available.
Although some joint replacement patients may need admission to an IRF,
such as those with comorbidities that affect the patient's function, our
analysis showed that few of these patients had comorbidities that
suggested a possible need for the level of services offered by an IRF. Our
analysis found that 87 percent of joint replacement patients admitted to
IRFs in fiscal year 2003 did not meet the criteria of the rule, and among
those, over 84 percent did not have any comorbidities that would have
affected the costs of their care based on our analysis of the payment
data.
Because the data we analyzed were from 2003, when enforcement of the rule
was suspended, we also looked at newly released data from July through
December 2004, after enforcement had resumed, to determine whether
admission patterns had changed. We focused on the largest category of
patients admitted to IRFs, joint replacement patients, and found no
material change in the admission of joint replacement patients for the
same time periods in 2003 and 2004. Across all IRFs, the percentage of
Medicare patients admitted for a joint replacement declined by 0.1
percentage point.
In conjunction with our finding on the number of patients admitted to IRFs
for conditions not on the list in the rule, we determined that only 6
percent of IRFs in fiscal year 2003 were able to meet a 75 percent
threshold. Many IRFs were able to meet the lower thresholds that would be
in place early in the transition period, but progressively fewer IRFs were
able to meet the higher threshold levels.
IRFs Vary in the Criteria Used to Assess Patients for Admission, and CMS Does
Not Routinely Review IRFs' Admission Decisions
As we stated in our report, the criteria IRFs used to assess patients for
admission varied by facility and included patient characteristics in
addition to condition. All the IRF officials we interviewed evaluated a
patient's function when assessing whether a patient needed the level of
services of an IRF. Whereas some IRF officials reported that they used
function to characterize patients who were appropriate for admission
(e.g., patients with a potential for functional improvement), others said
they used function to characterize patients not appropriate for admission
(e.g., patients whose functional level was too high, indicating that they
could go home, or too low, indicating that they needed to be in a SNF).
Almost half of the IRF officials interviewed stated that function was the
main factor that should be considered in assessing the need for IRF
services.
IRF officials reported to us that they did not admit all the patients they
assessed. Typically, the IRF received a request from a physician in the
acute care hospital requesting a medical consultation from an IRF
physician, or from a hospital discharge planner or social worker
indicating that they had a potential patient. An IRF staff member-usually
a physician and/or a nurse-conducted an assessment prior to admission to
determine whether to admit a patient.
CMS, working through its fiscal intermediaries, has not routinely reviewed
IRF admission decisions, although it reported that such reviews could be
used to target problem areas. Among the 10 fiscal intermediary officials
we interviewed, over half were not conducting reviews of patients admitted
to IRFs. We concluded that the presence of patients in IRFs who may not
need the intense level of services provided by IRFs called for increased
scrutiny of IRF admissions, which could target problem areas and
vulnerabilities and thereby reduce the number of inappropriate admissions
in the future. We recommended that CMS ensure that its fiscal
intermediaries routinely conduct targeted reviews for medical necessity
for IRF admissions. CMS agreed that targeted reviews are necessary and
said that it expected its contractors to direct their resources toward
areas of risk. It also reported that it has expanded its efforts to
provide greater oversight of IRF admissions through local policies that
have been implemented or are being developed by the fiscal intermediaries.
Experts Differed on Adding Conditions to List in Rule but Agreed That Condition
Alone Does Not Provide Sufficient Criteria
As we reported, the experts IOM convened and other experts we interviewed
differed on whether conditions should be added to the list in the 75
percent rule but agreed that condition alone does not provide sufficient
criteria to identify types of patients appropriate for IRFs.
The experts IOM convened generally questioned the strength of the evidence
for adding conditions to the list in the rule. They reported that the
evidence on the benefits of IRF services is variable, particularly for
certain orthopedic conditions, and some of them reported that little
information was available on the need for inpatient rehabilitation for
cardiac, transplant, pulmonary, or oncology conditions. In general, they
reported that, except for a few subpopulations, uncomplicated, unilateral
joint replacement patients rarely need to be admitted to an IRF. Most of
them called for further research to identify the types of patients that
need inpatient rehabilitation and to understand the effectiveness of IRFs
in comparison with other settings of care. IRF officials we interviewed
did not agree on whether conditions, including a broader category of joint
replacements, should be added to the list in the rule. Half of them
suggested that joint replacement be more broadly defined to include more
patients saying, for example, that the current requirements were too
restrictive and arbitrary. Others said that unilateral joint replacement
patients were not generally appropriate for IRFs. We recommended that CMS
conduct additional activities to encourage research on the effectiveness
of intensive inpatient rehabilitation and factors that predict patient
need for these services. CMS agreed and said that it has expanded its
activities to guide future research efforts by encouraging government
research organizations, academic institutions, and the rehabilitation
industry to conduct both general and targeted research, and plans to
collaborate with the National Institutes of Health to determine how to
best promote research.
There was general agreement among all the groups of experts we
interviewed, including the experts IOM convened, that condition alone is
insufficient for identifying appropriate types of patients for inpatient
rehabilitation, because not all patients with a condition on the list need
to be in an IRF. For example, stroke is on the list, but not all stroke
patients need to go to an IRF after their hospitalization. Similarly,
cardiac condition is not on the list, but some cardiac patients may need
to be admitted to an IRF. Among the experts convened by IOM, functional
status was identified most frequently as the information required in
addition to condition. Half of them commented on the need to add
information about functional status, such as functional need, functional
decline, motor and cognitive function, and functional disability. However,
some of the experts convened by IOM recognized the challenge of
operationalizing a measure of function, and some experts questioned the
ability of the current assessment tools to predict which types of patients
will improve if treated in an IRF.16
We concluded that if condition alone is not sufficient for determining
which types of patients are most appropriate for IRFs, more conditions
should not be added to the list at the present time, and that future
efforts should refine the rule to increase its clarity about which types
of patients are most appropriate for IRFs. We recommended that CMS 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 require IRF
services, possibly using functional status or other factors, in addition
to condition. CMS stated that while it expected to follow our
recommendation, it would need to give this action careful consideration
because it could result in a more restrictive policy than the present
regulations, and noted that future research could guide the agency's
description of subgroups.
Concluding Observations
As we stated in our report, we believe that action to conduct reviews for
medical necessity and to produce more information about the effectiveness
of inpatient rehabilitation could support future efforts to refine the
rule over time to increase its clarity about which types of patients are
most appropriate for IRFs. These actions could help to ensure that
Medicare does not pay IRFs for patients who could be treated in a less
intensive setting and does not misclassify facilities for payment.
16For example, one fiscal intermediary official reported that the
instrument that is currently used does not adequately measure progress in
small increments, such as a quadriplegic patient might experience. Another
respondent also reported that the current instrument only measures
functional status at a point in time, but does not predict functional
improvement.
Madam Chairman, this concludes my prepared statement. I would be happy to
respond to any questions you or other Members of the Subcommittee may have
at this time.
Contact and Staff Acknowledgments
For further information about this testimony, please contact Marjorie
Kanof at (202) 512-7114. Linda Kohn and Roseanne Price also made key
contributions to this statement.
Appendix I: List of Conditions in CMS's 75 Percent Rule
A facility may be classified as an IRF if it can show that, during a
12-month period1 at least 75 percent of all its patients, including its
Medicare patients, required intensive rehabilitation services for the
treatment of one or more of the following conditions:2
1. Stroke.
2. Spinal cord injury.
3. Congenital deformity.
4. Amputation.
5. Major multiple trauma.
6. Fracture of femur (hip fracture).
7. Brain injury.
8. Neurological disorders (including multiple sclerosis, motor
neuron diseases, polyneuropathy, muscular dystrophy, and
Parkinson's disease).
9. Burns.
10. Active, polyarticular rheumatoid arthritis, psoriatic
arthritis, and seronegative arthropathies resulting in significant
functional impairment of ambulation and other activities of daily
living that have not improved after an appropriate, aggressive,
and sustained course of outpatient therapy services or services in
other less intensive rehabilitation settings immediately preceding
the inpatient rehabilitation admission or that result from a
systemic disease activation immediately before admission, but have
the potential to improve with more intensive rehabilitation.
11. Systemic vasculidities with joint inflammation, resulting in
significant functional impairment of ambulation and other
activities of daily living that have not improved after an
appropriate, aggressive, and sustained course of outpatient
therapy services or services in other less intensive
rehabilitation settings immediately preceding the inpatient
rehabilitation admission or that result from a systemic disease
activation immediately before admission, but have the potential to
improve with more intensive rehabilitation.
12. Severe or advanced osteoarthritis (osteoarthritis or
degenerative joint disease) involving two or more major weight
bearing joints (elbow, shoulders, hips, or knees, but not counting
a joint with a prosthesis) with joint deformity and substantial
loss of range of motion, atrophy of muscles surrounding the joint,
significant functional impairment of ambulation and other
activities of daily living that have not improved after the
patient has participated in an appropriate, aggressive, and
sustained course of outpatient therapy services or services in
other less intensive rehabilitation settings immediately preceding
the inpatient rehabilitation admission but have the potential to
improve with more intensive rehabilitation. (A joint replaced by a
prosthesis no longer is considered to have osteoarthritis, or
other arthritis, even though this condition was the reason for the
joint replacement.)
13. Knee or hip joint replacement, or both, during an acute
hospitalization immediately preceding the inpatient rehabilitation
stay and also meet one or more of the following specific criteria:
a. The patient underwent bilateral knee or bilateral hip joint
replacement surgery during the acute hospital admission
immediately preceding the IRF admission.
b. The patient is extremely obese, with a body mass index of at
least 50 at the time of admission to the IRF.
c. The patient is age 85 or older at the time of admission to the
IRF.
1The time period is defined by CMS or the CMS contractor.
2See 42 C.F.R. S:412.23(b)(2)(iii) (2004).
(290472)
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www.gao.gov/cgi-bin/getrpt? GAO-05-825T .
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For more information, contact Marjorie Kanof at (202) 512-7114.
Highlights of GAO-05-825T , a report before the Subcommittee on Health,
Committee on Ways and Means, House of Representatives
June 16, 2005
MEDICARE
More Specific Criteria Needed to Classify Inpatient Rehabilitation
Facilities
Medicare classifies inpatient rehabilitation facilities (IRF) using the
"75 percent rule." If a facility can show that during a 12-month period at
least 75 percent of its patients required intensive rehabilitation for 1
of 13 listed conditions, it may be classified as an IRF and paid at a
higher rate than for less intensive rehabilitation in other settings.
Because this difference can be substantial, it is important to classify
IRFs correctly. GAO was asked to discuss issues relating to the
classification of IRFs, and in April 2005 it issued a report, Medcare:
More Specific Critera Needed to Cassify Inpatient Rehabilitation
Facilities (GAO-05-366). For that report, GAO analyzed data on all
Medicare patients (the majority of patients in IRFs) admitted to IRFs in
fiscal year 2003, spoke to IRF medical directors, and had the Institute of
Medicine (IOM) convene a meeting of experts to evaluate the use of a list
of conditions in the 75 percent rule. This testimony is based on the April
2005 report.
What GAO Recommends
In its April 2005 report, GAO recommended that CMS take several actions,
including describing more thoroughly the subgroups of patients within a
condition that require IRF services, possibly using functional status or
other factors in addition to condition. CMS generally agreed with the
recommendations.
As noted in the April 2005 report, GAO found that in fiscal year 2003
fewer than half of all IRF Medicare patients were admitted for having a
primary condition on the list in the 75 percent rule. Almost half of all
patients with conditions not on the list were admitted for orthopedic
conditions, and among those the largest group was joint replacement
patients. The experts IOM convened said that uncomplicated unilateral
joint replacement patients rarely need to be admitted to an IRF, and GAO
analysis suggested that relatively few of the Medicare unilateral joint
replacement patients had comorbid conditions that suggested a possible
need for the IRF level of services. Additionally, GAO found that only 6
percent of IRFs in fiscal year 2003 were able to meet a 75 percent
threshold.
GAO also found that IRFs varied in the criteria used to assess patients
for admission, using patient characteristics such as functional status, as
well as condition. The Centers for Medicare & Medicaid Services (CMS),
working through its fiscal intermediaries, had not routinely reviewed IRF
admission decisions to determine whether they were medically justified,
although it reported that such reviews could be used to target problem
areas.
The experts IOM convened and other clinical and nonclinical experts GAO
interviewed differed on whether conditions should be added to the list in
the 75 percent rule. The experts IOM convened questioned the strength of
the evidence for adding conditions to the list-finding the evidence for
certain orthopedic conditions particularly weak-and some of them reported
that little information was available on the need for inpatient
rehabilitation for cardiac, transplant, pulmonary, or oncology patients.
They called for further research to identify the types of patients that
need inpatient rehabilitation and to understand the effectiveness of IRFs.
There was general agreement among all the groups of experts interviewed
that condition alone is insufficient for identifying appropriate types of
patients for inpatient rehabilitation, since within any condition only a
subgroup of patients require the level of services of an IRF, and that
functional status should also be considered in addition to condition.
GAO concluded that if condition alone is not sufficient for determining
which types of patients are most appropriate for IRFs, more conditions
should not be added to the list at the present time and the rule should be
refined to clarify which types of patients should be in IRFs as opposed to
another setting.
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