CMS Publishes Final Changes to Inpatient Rehabilitation Facility 75% Rule

On May 7, 2004, the Centers for Medicare & Medicaid Services ("CMS") published a final rule revising the classification criterion, commonly referred to as the "75% Rule," used to determine whether hospitals can be considered inpatient rehabilitation facilities ("IRFs") for purposes of Medicare payment.¹ See 69 Fed. Reg. 25,752 (the "Final Rule"). The Final Rule modifies and expands from 10 to 13 the medical conditions used to determine whether a hospital qualifies as an IRF. In addition, CMS has lowered the compliance threshold percentage effective for cost reporting periods beginning on or after July 1, 2004 and established a three-year timeframe within which that threshold reverts to 75%. The agency also has finalized the conditions under which comorbidities can be used to verify compliance with the 75% Rule. Finally, in the Final Rule, CMS provides additional guidance concerning the timeframe that will be used to determine compliance with the 75% Rule.