A Medicare rule now says all required therapy rather than the required therapy, and rehabilitation hospitals asked for flexibility that CMS declined to give

The change is one word.

Until now the regulation at 42 CFR 412.622(a)(3)(ii) said that the required therapy had to begin within 36 hours of the midnight following a patient's admission to an inpatient rehabilitation facility. From 1 October it says all required therapy. A claim that does not comply is not reasonable and necessary, and Medicare does not pay it.

The Centers for Medicare and Medicaid Services filed the FY 2027 payment rule for these facilities on Thursday afternoon. Most of it is arithmetic. The market basket rises 3.2 percent, a productivity adjustment takes 0.9 percentage point back, and the update lands at 2.3 percent, a tenth below what was proposed. The standard payment conversion factor goes from $19,371 to $19,868. CMS puts the whole rule at about $340m more flowing to rehabilitation hospitals next year.

Where the word came from

CMS says the ambiguity is its own. Guidance it posted in 2010 left open whether one therapy or every therapy had to start inside the window, and the agency writes that although the guidance came off its website a long time ago, some providers still cite it. The rule closes that reading by changing the article.

Commenters asked for room. They suggested 48 to 72 hours instead of 36. They asked for exceptions where a patient's tolerance changes, for latitude at smaller facilities and at facilities short of rehabilitation physicians or therapists, and for a year to prepare. Several asked how compliance would even be measured.

CMS answered each and moved on none. Its sentence is flat: it did not propose flexibilities and it is not finalising any. Compliance stays a matter of auditing medical records. The agency adds that claims for admitted patients who cannot tolerate an intensive therapy programme may be denied.

Two smaller things did move. The initial interdisciplinary team meeting must now happen within four days of admission, aligning it with the plan of care. And a proposal to require current functional status in the preadmission screening was dropped.

The rural adjustment runs out

Facilities counted as rural in FY 2024 that became urban in FY 2025, when CMS adopted the revised statistical area boundaries, have been losing a payment adjustment in stages. FY 2027 is the last stage. They now take the full wage index with no rural adjustment at all.

The adjustment they are losing is worth 14.9 percent, a figure frozen since FY 2014. Commenters supported finishing the phase-out and asked CMS to keep watching what it does to rural access. CMS said it would.