"The 75 percent rule is not only arbitrary, it results in what amounts to Medicare patient quotas so that the rehabilitative needs of many seniors are not met. This threatens the very entitlement to care for those seniors," remarked Chip Kahn, President of the Federation of American Hospitals.

The rehabilitation field strongly supports legislation that would prevent further escalation of the percentage threshold because the rule, in three years, has far exceeded the government's fully-implemented savings and policy objectives. The Centers for Medicare & Medicaid Services (CMS) estimated that during the first two years of the 75 Percent Rule's phase-in, only 7,000 fewer patients would be treated. However, a study conducted by The Moran Company found a caseload decline of 88,000 patients in rehabilitation hospitals or units during that time period because of the 75 Percent Rule.


Inpatient rehabilitation hospitals and units provide acute hospital-level care that is overseen by specialty-trained physicians and registered nurses who coordinate care for patients' medical and rehabilitation needs. Rehabilitation physicians and rehabilitation nurses must be available on a 24-hour basis and a physician must regularly see the patient. The multi-disciplinary care provided by inpatient rehabilitation hospital doctors, nurses, and therapists is unmatched by other health settings.

In other health settings, such as nursing homes, there is no physician-on-duty requirement, no requirement for an interdisciplinary team approach or coordination among therapists, and no minimum requirements for the amount of therapy provided. In addition, the Medicare Payment Advisory Commission (MedPAC) has reported that the quality of care in nursing homes is deteriorating -- while hospital readmissions are rising, discharges to the community are falling, and patients cared for in skilled nursing facilities are more frequently readmitted to general acute hospitals for follow-up care, increasing cost of care and further delaying patients' return to their homes.

A case in point: an article published January 2006 in the American Journal of Physical Medicine and Rehabilitation by Walsh, et al, found that patients recovering from single joint replacement surgery spent twice as long in the nursing home setting as in the rehabilitation hospital, had lower function on discharge despite being the same on admission, were more likely to require transfer back to the acute hospital from the nursing home, and were less likely to return home.

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