I 

110TH CONGRESS 

1ST SESSION H. R. 1459 

To improve Medicare beneficiary access by extending the 60 percent compliance threshold used to determine whether a hospital or unit of a hospital 

is an inpatient rehabilitation facility. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 9, 2007 

Mr. TANNER (for himself, Mrs. LOWEY, Mr. HULSHOF, Mr. LOBIONDO, Mrs. 

CAPPS, Mrs. MALONEY of New York, Mr. ENGEL, Mr. MCNULTY, Mr. 

CUMMINGS, Mr. ALTMIRE, Mr. FOSSELLA, Mr. EHLERS, Ms. MCCOLLUM

of Minnesota, Mr. MCHUGH, Mr. HINCHEY, Mr. ACKERMAN, Ms. WOOLSEY, Mr. ENGLISH of Pennsylvania, Ms. HIRONO, Mr. HIGGINS, Mr. LINCOLN DAVIS of Tennessee, Mr. MURTHA, Mr. PLATTS, Mr. SAXTON, Mr. 

JEFFERSON, Ms. SCHWARTZ, Mr. HALL of Texas, Mr. NEAL of Massachusetts, Mr. GERLACH, Mr. GENE GREEN of Texas, Mr. GORDON of 

Tennessee, Mr. HOLDEN, Ms. BERKLEY, Mr. ORTIZ, Mr. ISRAEL, Mr. 

WAMP, Mr. FERGUSON, Mr. PETERSON of Pennsylvania, Mr. SMITH of 

New Jersey, Mr. BERRY, Mr. MOORE of Kansas, Mr. SESSIONS, Mr. 

UDALL of Colorado, Mr. HOLT, Mr. WALSH of New York, Mr. REYNOLDS, Mr. MCGOVERN, Mr. PORTER, Mr. LAHOOD, Mr. PAYNE, Mr. 

GOODE, Mr. BISHOP of New York, Mr. SHUSTER, Ms. SLAUGHTER, Mr. 

DAVIS of Alabama, Mr. GOHMERT, Mr. DENT, Mr. ROSKAM, Mr. FRANK

of Massachusetts, Mr. MEEHAN, Mr. CAPUANO, Mr. ROGERS of Alabama, 

Mr. LEWIS of Kentucky, Mr. THOMPSON of California, Mr. CRAMER, Mr. 

ABERCROMBIE, Mr. TIM MURPHY of Pennsylvania, Mr. HODES, Mr. 

COHEN, Mr. RAHALL, Mr. ALEXANDER, Mr. GARRETT of New Jersey, 

Mr. BRADY of Pennsylvania, Mr. BOYD of Florida, Mr. REYES, Mr. KING

of New York, Mr. PASCRELL, Ms. GRANGER, Mr. EVERETT, Mr. 

ADERHOLT, Mrs. BLACKBURN, Mr. BACHUS, Mr. CLAY, and Mr. SAM

JOHNSON of Texas) introduced the following bill; which was referred to 

the Committee on Ways and Means 

A BILL 

To improve Medicare beneficiary access by extending the 


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60 percent compliance threshold used to determine 

whether a hospital or unit of a hospital is an inpatient 

rehabilitation facility. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. EXTENDED PHASE-IN OF THE INPATIENT REHA4 BILITATION FACILITY CLASSIFICATION CRI5 TERIA. 

6 (a) IN GENERAL.—Section 5005 of the Deficit Re7 duction Act of 2005 is amended— 

8 (1) in subsection (a), by striking ‘‘apply the ap9 plicable percent specified in subsection (b)’’ and in10 serting ‘‘require a compliance rate that is no greater 

11 than the 60 percent compliance rate that became ef12 fective for cost reporting periods beginning on or 

13 after July 1, 2006’’; and 

14 (2) by amending subsection (b) to read as fol15 lows: 

16 ‘‘(b) CONTINUED USE OF COMORBIDITIES.—For cost 

17 reporting periods beginning on or after July 1, 2008, the 

18 Secretary shall include patients with comorbidities as de19 scribed in section 412.23(b)(2)(i) of title 42, Code of Fed20 eral Regulations (as in effect as of January 1, 2007), in 

21 the inpatient population that counts towards the percent 

22 specified in subsection (a).’’. 


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1 (b) MEDICAL NECESSITY CRITERIA FOR BENE2 FICIARIES SERVED IN REHABILITATION HOSPITALS AND

3 UNITS.—The Centers for Medicare & Medicaid Services 

4 and Medicare fiscal intermediaries, Medicare administra5 tive contractors, recovery audit contractors, and other gov6 ernment agents shall use and apply the criteria established 

7 in HCFA Ruling 85–2, as issued on July 31, 1985 (50 

8 Fed. Reg. 31040), as the sole standard for determining 

9 the medical necessity of services provided by inpatient re10 habilitation hospitals and units to Medicare beneficiaries 

11 under title XVIII of the Social Security Act. 

12 SEC. 2. RECOMMENDATIONS FOR CLASSIFYING INPATIENT 

13 REHABILITATION HOSPITALS AND UNITS. 

14 (a) REPORT TO CONGRESS.—Not later than 12 

15 months after the date of the enactment of this Act, the 

16 Secretary of Health and Human Services, in consultation 

17 with physicians, administrators of inpatient rehabilitation 

18 and acute care hospitals, Medicare beneficiaries, and trade 

19 organizations representing inpatient rehabilitation hos20 pitals and units, shall submit to the Committee on Ways 

21 and Means of the House of Representatives and the Com22 mittee on Finance of the Senate a report that includes— 

23 (1) an examination of the impact of the 75 per24 cent rule on the Medicare program and the specific 

25 impact of the rule on Medicare beneficiaries; and 


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1 (2) alternatives to the 75 percent rule policy for 

2 determining exclusion criteria for inpatient rehabili3 tation hospital and unit designation under the Medi4 care program, including determining clinical appro5 priateness of inpatient rehabilitation hospital and 

6 unit admissions, and including alternative criteria 

7 based solely on a measure of a patient’s functional 

8 status which is independent of diagnosis. 

9 For the purposes of this section, the term ‘‘75 percent 

10 rule’’ means the requirement of section 412.23(b)(2) of 

11 title 42, Code of Federal Regulations, that 75 percent of 

12 the patients of a rehabilitation hospital or converted reha13 bilitation unit are in 1 or more of 13 listed treatment cat14 egories. 

15 (b) CONSIDERATIONS.—In developing the report de16 scribed in subsection (a), the Secretary shall include the 

17 following: 

18 (1) The effect of the 75 percent rule on access 

19 to inpatient hospital rehabilitation care by Medicare 

20 beneficiaries and the effectiveness of care available 

21 to such beneficiaries in other health care settings. 

22 (2) A comparative analysis of the overall Medi23 care system costs, including Medicare expenditures 

24 to acute care hospitals, home health agencies, skilled 


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1 nursing facilities, and long-term care hospitals, re2 sulting from implementation of the 75 percent rule. 

3 (3) A analysis that compares the quality, cost, 

4 and patient outcomes of inpatient rehabilitation 

5 services among different post-acute care settings, in6 cluding whether the Medicare program and Medicare 

7 beneficiaries may incur higher costs of care for the 

8 entire episode of illness because of factors such as— 

9 (A) readmissions to acute care hospitals 

10 that could have been avoided absent the 75 per11 cent rule; or 

12 (B) extended lengths of stay in post-acute 

13 settings other than a rehabilitation hospital or 

14 unit because beneficiaries were denied access to 

15 care in such a hospital or unit due to the 75 

16 percent rule. 

17 SEC. 3. TECHNICAL CORRECTION FOR INPATIENT REHA18 BILITATION HOSPITALS AND UNITS NOMEN19 CLATURE. 

20 (a) IN GENERAL.—Section 1886(j) of the Social Se21 curity Act (42 U.S.C. 1395ww(j)) is amended— 

22 (1) in paragraph (1)(A), by striking ‘‘(in this 

23 subsection referred to as a ‘rehabilitation facility’), 

24 other than a facility’’ and inserting ‘‘other than a 

25 hospital or unit’’; 


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1 (2) by striking ‘‘rehabilitation facility’’ and ‘‘fa2 cility’’ and inserting ‘‘inpatient rehabilitation hos3 pital or a rehabilitation unit’’ and ‘‘hospital or unit’’, 

4 respectively, each place it appears; 

5 (3) by striking ‘‘rehabilitation facilities’’ and in6 serting ‘‘inpatient rehabilitation hospitals or rehabili7 tation units’’ each place it appears; and 

8 (4) in paragraph (6), by striking ‘‘rehabilitation 

9 facilities’ costs’’ and inserting ‘‘costs of inpatient re10 habilitation hospitals or rehabilitation units’’. 

11 (b) USE OF THE TERM ‘‘IRH/U’’.—The Secretary of 

12 Health and Human Services shall, under regulation and 

13 Medicare program guidance, use the term ‘‘inpatient reha14 bilitation hospital/unit’’ or ‘‘IRH/U’’ to refer to entities 

15 receiving payment for inpatient rehabilitation services 

16 under section 1886(j) of the Social Security Act (42 

17 U.S.C. 1395ww(j)). 

18 SEC. 4. EFFECTIVE DATE. 

19 Sections 1 and 3 of this Act shall take effect on July 

20 1, 2007, and section 2 shall take effect on the date of 

21 the enactment of this Act. 

Æ 


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