I 
110TH CONGRESS 
1ST SESSION H. R. 1459 
To improve Medicare beneficiary access by extending the 60 percent compli-
ance 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. WOOL-
SEY, Mr. ENGLISH of Pennsylvania, Ms. HIRONO, Mr. HIGGINS, Mr. LIN-
COLN DAVIS of Tennessee, Mr. MURTHA, Mr. PLATTS, Mr. SAXTON, Mr. 
JEFFERSON, Ms. SCHWARTZ, Mr. HALL of Texas, Mr. NEAL of Massa-
chusetts, 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. REY-
NOLDS, 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. EXTENDED PHASE-IN OF THE INPATIENT REHA-
BILITATION FACILITY CLASSIFICATION CRI-
TERIA. 
(a) IN GENERAL.—Section 5005 of the Deficit Re-
duction Act of 2005 is amended— 
(1) in subsection (a), by striking ‘‘apply the ap-
plicable percent specified in subsection (b)’’ and in-
serting ‘‘require a compliance rate that is no greater 
than the 60 percent compliance rate that became ef-
fective for cost reporting periods beginning on or 
after July 1, 2006’’; and 
(2) by amending subsection (b) to read as fol-
lows: 
‘‘(b) CONTINUED USE OF COMORBIDITIES.—For cost 
reporting periods beginning on or after July 1, 2008, the 
Secretary shall include patients with comorbidities as de-
scribed in section 412.23(b)(2)(i) of title 42, Code of Fed-
eral Regulations (as in effect as of January 1, 2007), in 
the inpatient population that counts towards the percent 
specified in subsection (a).’’. 
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(b) MEDICAL NECESSITY CRITERIA
FOR BENE-
FICIARIES SERVED IN REHABILITATION HOSPITALS AND 
UNITS.—The Centers for Medicare & Medicaid Services 
and Medicare fiscal intermediaries, Medicare administra-
tive contractors, recovery audit contractors, and other gov-
ernment agents shall use and apply the criteria established 
in HCFA Ruling 85–2, as issued on July 31, 1985 (50 
Fed. Reg. 31040), as the sole standard for determining 
the medical necessity of services provided by inpatient re-
habilitation hospitals and units to Medicare beneficiaries 
under title XVIII of the Social Security Act. 
SEC. 2. RECOMMENDATIONS FOR CLASSIFYING INPATIENT 
REHABILITATION HOSPITALS AND UNITS. 
(a) REPORT
TO CONGRESS.—Not later than 12 
months after the date of the enactment of this Act, the 
Secretary of Health and Human Services, in consultation 
with physicians, administrators of inpatient rehabilitation 
and acute care hospitals, Medicare beneficiaries, and trade 
organizations representing inpatient rehabilitation hos-
pitals and units, shall submit to the Committee on Ways 
and Means of the House of Representatives and the Com-
mittee on Finance of the Senate a report that includes— 
(1) an examination of the impact of the 75 per-
cent rule on the Medicare program and the specific 
impact of the rule on Medicare beneficiaries; and 
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(2) alternatives to the 75 percent rule policy for 
determining exclusion criteria for inpatient rehabili-
tation hospital and unit designation under the Medi-
care program, including determining clinical appro-
priateness of inpatient rehabilitation hospital and 
unit admissions, and including alternative criteria 
based solely on a measure of a patient’s functional 
status which is independent of diagnosis. 
For the purposes of this section, the term ‘‘75 percent 
rule’’ means the requirement of section 412.23(b)(2) of 
title 42, Code of Federal Regulations, that 75 percent of 
the patients of a rehabilitation hospital or converted reha-
bilitation unit are in 1 or more of 13 listed treatment cat-
egories. 
(b) CONSIDERATIONS.—In developing the report de-
scribed in subsection (a), the Secretary shall include the 
following: 
(1) The effect of the 75 percent rule on access 
to inpatient hospital rehabilitation care by Medicare 
beneficiaries and the effectiveness of care available 
to such beneficiaries in other health care settings. 
(2) A comparative analysis of the overall Medi-
care system costs, including Medicare expenditures 
to acute care hospitals, home health agencies, skilled 
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