271 
graph and the most recent and complete cost re-
port and claims data available. 
‘‘(G) DEFINITIONS.—In this paragraph: 
‘‘(i) 
APPLICABLE
MEDICAL
CONDI-
TION.—The term ‘applicable medical condi-
tion’ means— 
‘‘(I) unilateral knee replacement; 
‘‘(II) unilateral hip replacement; 
and 
‘‘(III) unilateral hip fracture. 
‘‘(ii) OVERHEAD
COSTS.—The term 
‘overhead costs’ means those Medicare-allow-
able costs that are contained in the General 
Service cost centers of the Medicare cost re-
ports for inpatient rehabilitation facilities 
and for skilled nursing facilities, respec-
tively, as determined by the Secretary. 
‘‘(iii) PATIENT
CARE
COSTS.—The 
term ‘patient care costs’ means total Medi-
care-allowable costs minus overhead costs. 
‘‘(H) SUNSET.—The provisions of this 
paragraph shall cease to apply as of the date the 
Secretary implements an integrated, site-neutral 
payment methodology under this title for post- 
acute care.’’; and 
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(C) in paragraph (8), as redesignated by 
paragraph (1)— 
(i) in subparagraph (C), by striking 
‘‘and’’ at the end; 
(ii) in subparagraph (D), by striking 
the period at the end and inserting ‘‘, and’’; 
and 
(iii) by adding at the end the following 
new subparagraph: 
‘‘(E) 
modified 
standardized 
payment 
amounts under paragraph (7).’’. 
(2) SPECIAL RULE FOR DISCHARGES OCCURRING 
IN THE SECOND HALF OF FISCAL YEAR 2008.— 
(A) IN GENERAL.—In the case of discharges 
from an inpatient rehabilitation facility occur-
ring during the period beginning on April 1, 
2008, and ending on September 30, 2008, for ap-
plicable medical conditions (as defined in para-
graph (7)(G)(i) of section 1886(j) of the Social 
Security Act (42 U.S.C. 1395ww(j)), as inserted 
by paragraph (1)(B), in lieu of the standardized 
payment amount determined pursuant to such 
section, the standardized payment amount shall 
be $9,507 for unilateral knee replacement, 
$10,398 for unilateral hip replacement, and 
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$10,958 for unilateral hip fracture. Such 
amounts are the amounts that are estimated 
would be determined under paragraph (7)(C) of 
such section 1886(j) for such conditions if such 
paragraph applied for such period. Such stand-
ardized payment amounts shall be multiplied by 
the relative weights for each case-mix group and 
tier, as published in the final rule of the Sec-
retary of Health and Human Services for inpa-
tient rehabilitation facility services prospective 
payment for fiscal year 2008, to obtain the ap-
plicable payment amounts for each such condi-
tion for each case-mix group and tier. 
(B) 
IMPLEMENTATION.—Notwithstanding 
any other provision of law, the Secretary of 
Health and Human Services may implement 
this subsection by program instruction or other-
wise. Paragraph (8)(E) of such section 1886(j) of 
the Social Security Act, as added by paragraph 
(1)(C), shall apply for purposes of this subsection 
in the same manner as such paragraph applies 
for purposes of paragraph (7) of such section 
1886(j). 
(d) RECOMMENDATIONS FOR CLASSIFYING INPATIENT 
REHABILITATION HOSPITALS AND UNITS.— 
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(1) 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 con-
sultation with physicians (including geriatricians 
and physiatrists), administrators of inpatient reha-
bilitation, acute care hospitals, skilled nursing facili-
ties, and other settings providing rehabilitation serv-
ices, Medicare beneficiaries, trade organizations rep-
resenting inpatient rehabilitation hospitals and units 
and skilled nursing facilities, and the Medicare Pay-
ment Advisory Commission, shall submit to the Com-
mittee on Ways and Means of the House of Represent-
atives and the Committee on Finance of the Senate a 
report that includes— 
(A) an examination of Medicare bene-
ficiaries’ access to medically necessary rehabili-
tation services; 
(B) alternatives or refinements to the 75 
percent rule policy for determining exclusion cri-
teria for inpatient rehabilitation hospital and 
unit designation under the Medicare program, 
including determining clinical appropriateness 
of inpatient rehabilitation hospital and unit ad-
missions and alternative criteria which would 
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