What Is The So-Called “75% Rule”?

The Centers for Medicare and Medicaid Services (CMS) established by regulation seven criteria that facilities must meet before being classified as an inpatient rehabilitation facility. One of these criteria is known as the “75% Rule”, which requires that 75% (see compliance threshold requirements below) of a facility’s caseload fall within certain diagnostic categories.

In its original form, the 75% Rule required rehabilitation facilities to show that 75% of patients required intensive rehabilitative treatment for stroke, spinal cord injury, congenital deformity, amputation, major multiple trauma, fracture of femur, brain injury, polyarthritis, neurological disorders, and/or burns. The regulation, which went into effect in 1984, was never strictly enforced and was ultimately suspended in 2002.

In September 2003, CMS decided to amend, reinstate, and enforce the Rule as a way of reining in rehabilitation costs for Medicare. However, rehabilitation is used to treat a much wider range of illnesses today than it was when the Rule was first implemented. Yet, the agency failed to update the Rule to adequately reflect medical advances made over the last twenty years.

What diagnostic categories are included in the revised 75% Rule?

Currently, there are a total of 13 diagnostic categories, including nine of the original ten conditions-stroke, spinal cord injury, congenital deformity, amputation, major multiple trauma, hip fracture, brain injury, neurological disorders, and burns. It also splits the tenth condition, polyarthritis, into four subcategories of arthritic-related conditions.

When did the revised “75% Rule” go into effect?

The revised Rule went into effect on July 1, 2004.

The compliance threshold schedule for the rule is as follows:

50%-cost reporting periods beginning July 1, 2004 through June 30, 2005
60%-cost reporting periods beginning July 1, 2005-June 30, 2007
65%-cost reporting periods beginning July 1, 2007 through June 30, 2008
75%-cost reporting periods beginning July 1, 2008

What is the AAPM&R’s position on the “75% Rule”?

While the Academy works toward the long term goal of passing legislation that will remove admissions quotas and return the physiatrist to the position of freely determining what type of rehabilitation is medically necessary for any given patient, the Academy supports S.543/H.R. 1459 as an intermediate step in improving access to acute comprehensive rehabilitation for people with disabilities. We support access to medically reasonable and necessary rehabilitative services provided in the appropriate setting, whether that setting is an inpatient rehabilitation hospital or unit, skilled nursing facility, or on an outpatient basis.

H.R. 1459 & S.543, Preserving Patient Access to Inpatient Rehabilitation Hospitals Act of 2007 would:

• indefinitely extend the compliance threshold at 60% (the threshold is currently 65% as the legislation predates July 1, 2007);

• continue the use of comorbidities;

• codify current medical necessity standards; and

• require CMS to provide Congress with information on patients care denials.

The Academy believes patients should receive appropriate services that will enable them to function as fully as possible in their homes and communities.
 

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