Illinois Hospital Association

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June 27, 2007

Ms. Leslie Norwalk, Esq.
Acting Administrator
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Room 445-G, Hubert H. Humphrey Building
200 Independence Avenue, S.W.
Washington, D.C. 20201

ATTN.: CMS-1551-P

Re: Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2008; Proposed Rule, Federal Register, Volume 72, No. 88, Tuesday, May 8, 2007

Dear Ms. Norwalk:

On behalf of our approximately 200 member hospitals and health care systems, the Illinois Hospital Association (IHA) is taking this opportunity to formally comment on the proposed rule establishing new policies and payment rates for hospital inpatient rehabilitation for fiscal year 2008. IHA commends the Centers for Medicare and Medicaid Services (CMS) for its thorough analysis in the development of this rule; however, the Association does have some concerns with several of the provisions. Therefore, in accordance with instructions in the rule, the Illinois Hospital Association presents the following comments for your consideration:

75% Rule Policy:

  • In accordance with recommendations by the Medicare Payment Advisory Commission (Med PAC), CMS should identify the clinical characteristics of those patients who currently fall outside of the qualifying conditions and are appropriate for hospital-level rehabilitation. IHA shares MedPAC’s view that the 75% rule’s current diagnosis-based structure is inadequate to "...identify all patients who need, can tolerate and benefit from intensive rehabilitation." CMS should expand the qualifying conditions based on key clinical indicators of medical necessity for inpatient rehabilitation patients; doing so would reduce the number of denied medical necessity admissions for patients who seek care in rehabilitation hospitals and hospital units. CMS staff should coordinate timely review of these qualifying conditions with industry experts, including physicians, physiatrists, rehabilitation nurses, therapists and providers.
  • IHA is also concerned about the pending termination of the Rule’s temporary "co-morbidities provision," which allows classification of Medicare inpatients as meeting the 75% if certain, secondary medical characteristics are present. The provision is scheduled to sunset on July 1st, 2008 when full phase-in of the 75% rule is implemented. Under this temporary provision, a patient meets the 75% rule requirement is that patient is admitted for a co-morbid condition that falls within one of the thirteen qualifying conditions and also causes a significant decline in the patient’s functional ability. According to CMS’ own analysis, approximately 31,000 patients meet the rule’s criteria because of this provision. Termination of this provision would negatively impact this large number of patients with complicating medical conditions who require medical oversight by a physician and the specialized, advanced nursing care and therapy given in rehabilitation hospitals and units. Therefore, the Illinois Hospital Association urges CMS to permanently include co-morbidities as qualifying cases in the final FY 2008 rule.
  • High Cost Outliers Under the IRF-PPS:

  • CMS has proposed an increase in the outlier threshold amount to $7,522 in FY 2008 from $5,534 in FY 2007. The agency justifies this increase because estimated outlier payments in FY 2005 were 3.8% of total IRF-PPS payments, exceeding the statutory limit of 3%. However, CMS does concede that it is still examining the reasons for this increase. Therefore, IHA recommends that CMS continue examining the causes for the increase and if further analysis suggests that the threshold increase is still valid, CMS should publish these reasons as part of the final rule.
  • Ms. Norwalk, thank you again for the opportunity to comment. The Illinois Hospital Association also welcomes the opportunity to work with your agency in the continued development and refinement of the Medicare payment system for all providers.

    Sincerely,

    Thomas A. Jendro
    Senior Director, Finance
    Illinois Hospital Association
    (630) 276-5516
    tjendro@ihastaff.org