PAYMENT FOR INPATIENT REHABILITATION FACILITY (IRF) SERVICES.

SEC. 115. PAYMENT FOR INPATIENT REHABILITATION FACILITY (IRF) SERVICES.(a) Payment Update.—(1) In general.—Section 1886(j)(3)(C) of the Social Security Act (42 U.S.C. 1395ww(j)(3)(C)) is amended by adding at the end the following: “The increase factor to be applied under this subparagraph for each of fiscal years 2008 and 2009 shall be 0 percent.”.(2) Delayed effective date.—The amendment made by paragraph (1) shall not apply to payment units occurring before April 1, 2008.(b) Inpatient Rehabilitation Facility Classification Criteria.—(1) In general.—Section 5005 of the Deficit Reduction Act of 2005 (Public Law 109–171; 42 U.S.C. 1395ww note) is amended—(A) in subsection (a), by striking “apply the applicable percent specified in subsection (b)” and inserting “require a compliance rate that is no greater than the 60 percent compliance rate that became effective for cost reporting periods beginning on or after July 1, 2006,”; and(B) by amending subsection (b) to read as follows:“(b) Continued Use of Comorbidities.—For cost reporting periods beginning on or after July 1, 2007, the Secretary shall include patients with comorbidities as described in section 412.23(b)(2)(i) of title 42, Code of Federal Regulations (as in effect as of January 1, 2007), in the inpatient population that counts toward the percent specified in subsection (a).”.(2) Effective date.—The amendment made by paragraph (1)(A) shall apply for cost reporting periods beginning on or after July 1, 2007.(c) Recommendations for Classifying Inpatient Rehabilitation Hospitals and Units.—(1) Report to congress.—Not later than 18 months after the date of the enactment of this Act, the Secretary of Health and Human Services, in consultation with physicians (including geriatricians and physiatrists), administrators of inpatient rehabilitation, acute care hospitals, skilled nursing facilities, and other settings providing rehabilitation services, Medicare beneficiaries, trade organizations representing inpatient rehabilitation hospitals and units and skilled nursing facilities, and the Medicare Payment Advisory Commission, shall submit 121 STAT. 2507 to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report that includes the following:(A) An analysis of Medicare beneficiaries’ access to medically necessary rehabilitation services, including the potential effect of the 75 percent rule (as defined in paragraph (2)) on access to care.(B) An analysis of alternatives or refinements to the 75 percent rule policy for determining criteria for inpatient rehabilitation hospital and unit designation under the Medicare program, including alternative criteria which would consider a patient’s functional status, diagnosis, co-morbidities, and other relevant factors.(C) An analysis of the conditions for which individuals are commonly admitted to inpatient rehabilitation hospitals that are not included as a condition described in section 412.23(b)(2)(iii) of title 42, Code of Federal Regulations, to determine the appropriate setting of care, and any variation in patient outcomes and costs, across settings of care, for treatment of such conditions.(2) 75 percent rule defined.—For purposes of this subsection, 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 rehabilitation unit are in 1 or more of 13 listed treatment categories.