Enforcement of the Inpatient Rehabilitation Facility (IRF) Classification Criteria
On May 7, 2004, the Centers for Medicare & Medicaid Services (CMS) published a final rule
(69 FR 25752) revising the IRF regulatory requirements specified in §412.23(b)(2) that are commonly referred to as the "75 percent rule". The revised regulatory requirements were effective for IRF cost reporting periods starting on or after July 1, 2004. On January 25, 2005, the Center for Medicare Management (CMM) issued a joint signature memorandum to the Regional Offices (ROs) and WPS suspending enforcement of the regulatory requirements specified under §412.23(b)(2). The CMM is now directing that effective immediately enforcement of the regulatory requirements specified under §412.23(b)(2) is to resume.
Background
In order to receive payment under the IRF prospective payment system (PPS), a hospital or unit of a hospital must first be excluded from the acute care hospital PPS in accordance with the requirements specified in subpart B of Part 412 of the regulations, which includes §412.23(b)(2). In addition, under subpart P of Part 412 of the regulations the requirements at §412.23(b)(2) must be met to in order for an IRF to be paid under the IRF PPS. Section 412.23(b)(2) specifies the compliance percentage threshold that a facility must meet in order to be classified as an IRF. WPS is responsible for determining the compliance percentage threshold a facility met and reporting that result to the RO. A facility that failed to meet any of the requirements to be classified as an IRF may be reclassified as an acute care hospital and paid under the inpatient PPS, or, if applicable, may be classified as a portion of a critical access hospital.
The January 25, 2005, joint signature memorandum stated that in accordance with the Consolidated Appropriations Act, 2005 (Pub. Law 108-447 enacted on December 8, 2004), CMS could not use the revised §412.23(b)(2) requirements to change the classification of facilities that were classified as IRFs as of June 30, 2004, until CMS either: (1) Determined that our regulations at §412.23(b)(2) were not inconsistent with the recommendations of a soon-to-be-released Government Accountability
Office (GAO) IRF report; or (2) In accordance with the recommendations of the soon-to-be-released GAO IRF report issued an interim final rule revising the criteria at §412.23(b)(2) used to classify a facility as an IRF. The GAO issued the final IRF report in late April 2005. In addition, to comply with the Consolidated Appropriations Act, 2005 the joint signature memorandum instructed WPS to perform the compliance review on all IRFs in accordance with Change Requests (CRs) 3334, 3503, and any subsequent CRs regarding compliance with §412.23(b)(2). However, CMM instructed the ROs to not make any changes to the status of a hospital or a unit of a hospital that was classified as an IRF on or before June 30, 2004, and failed to meet the requirements specified in §412.23(b)(2).
CMS' Action
On June 21, 2005, we issued a Federal Register notice stating that the Secretary has determined that the recommendations in the GAO's IRF report are not inconsistent with our regulations as revised in the May 7, 2004, final rule. Therefore, effective immediately ROs and WPS are to take appropriate enforcement action if a facility does not meet any of the criteria used to classify a facility as an IRF, including the regulatory requirements specified under revised §412.23(b)(2). A facility will not be classified as an IRF at the start of its next cost reporting period if it does not meet the regulatory requirements specified under §412.23(b)(2) or any of the other requirements a facility must meet to be classified as an IRF.
If you have any questions, please contact either:
Carey Miller at (866) 734-9444 extension 2178
Krystal Wyatt at (866) 734-9444 extension 6238
Ken Curran at (866) 734-9444 extension 6686
Page Last Updated: Wednesday, 31-Dec-2008 10:49:06 CST
