CMS created an uproar in the health care industry when it published the final rule revising the so-called "75 Percent Rule" under the PPS for inpatient rehabilitation facilities (IRFs). 69 Fed. Reg. 25,752 (May 7, 2004). The industry decried the revision, citing CMS's failure to revise the 20-year-old qualifying conditions for IRF classification in a meaningful way that reflects current medical practice. (The final rule and its anticipated effect on the IRF industry are discussed in greater detail in Ms. Hedlund's article, "IRFs Challenged by Revised 75 Percent Rule and Medical Necessity Guidelines," which appeared in the Spring/Summer 2004 Health Law Alert.)

Relief is on the way at least temporarily, with permanent relief a distinct possibility. Section 219 of the FY 2005 appropriations package (Consolidated Appropriations Act, 2005, Pub. L. No. 108-447, § 219, 118 Stat. 2809, 3141) blocks implementation of the 75 Percent Rule until 60 days after the GAO completes a study to assess the rule's appropriateness. The moratorium was added to the FY 2005 Labor, Health and Human Services, and Education spending bill by the House Appropriations Committee, after a survey conducted by the American Hospital Association and the American Medical Rehabilitation Providers Association found that nearly 25 percent of IRFs will not meet the new standards during the first year the rule is in effect, and therefore will have to either discontinue services or close. By the fourth year of enforcement, according to the survey, 80 percent of IRFs would be in the same predicament. The GAO report will examine whether the current list of qualifying conditions is a clinically appropriate representation of IRF services and, if not, will identify which additional conditions should be added to the list. The report, expected in March 2005, had not been released as of this writing.