Deeper Than the Headlines: Inpatient Rehabilitation Facilities

According to the OIG’s most recent, published report, many inpatient rehabilitation facility (IRF) stays did not meet Medicare coverage and documentation requirements. According to their review, IRFs complied with all Medicare coverage and documentation requirements specified for reasonable and necessary care for 45 of the 220 sampled stays. However, for 175 of the sampled stays, corresponding to 135 IRFs, medical record documentation did not support that IRF care was reasonable and necessary in accordance with Medicare’s requirements. These errors occurred because many IRFs did not have adequate internal controls to prevent inappropriate admissions. Based on their sample results, OIG estimated that Medicare paid IRFs nation-wide $5.7 billion for care to beneficiaries that were not reasonable and necessary.

Previous OIG reviews showed that there were potential problems with IRFs. Specifically, prior OIG reviews found that some hospitals did not comply with Medicare coverage and documentation requirements for inpatient rehabilitation facilities (IRFs). Additionally, the Centers for Medicare & Medicaid Services’ (CMS’s) Comprehensive Error Rate Testing (CERT) program found that the error rate for IRFs increased, ranging from 9 percent in 2012 to a high of 62 percent in 2016.

Under the prospective payment system, IRFs are reimbursed at a rate generally 2.5 times greater than the acute inpatient prospective payment system (IPPS) rate. In exchange, Medicare requires IRFs to provide intensive rehabilitation to higher severity patients.

For discharges starting in 2010, CMS updated IRF requirements to reflect best practices in medicine that enhance the quality of care for patients. These requirements address the unique responsibility of the rehabilitation physician to closely supervise and coordinate a medical and functional rehabilitation course of care for the patient and to clearly and comprehensively document these decisions and processes in the medical records. As of 2010, CMS no longer considers trial admissions (IRF admissions of 3 to 10 days to allow the physician to determine whether the patient would benefit from IRF treatment) to be reasonable and necessary. A rehabilitation physician must review and approve the need for care only after a comprehensive preadmission screening within the previous 48 hours has been documented. CMS stated that the purpose of the coverage requirements is to clarify that patients who do not require, cannot participate in, or cannot benefit from the intensive rehabilitation therapy program offered in an IRF should be referred to another setting. Additionally, CMS stated that the purpose of the documentation requirements is to provide clear, up-to-date instructions for determining and documenting the medical necessity of the IRF admission.

The OIG found that IRF stays that did not meet coverage requirements were predominantly, but not exclusively, related to the following:

  • generalized weakness, overall fatigue, and impaired mobility for which appropriate therapy would be regular activities, such as walking, use of a wheelchair, or just general exercises (56 stays)
  • simple fractures, single extremity deficits, simple or minor trauma, elective or emergency single joint or other orthopedic repairs without postoperative complications, or no new and acute significant impairing event or condition (48 stays)
  • miscellaneous conditions without complications or other new impairing events to include other orthopedic, central nervous system, cardiac, and pulmonary conditions (25 stays)
  • inability to participate in intense rehabilitation and demonstrate measurable improvement of practical value to the patient (17 stays).

The report also shared some examples of situations discovered in the review where OIG determined it was not reasonable and necessary for the patient to have received care in an IRF:

Example 1: According to the medical review contractor, the patient had his right hip partially replaced after a fall, and there were no significant postoperative complications. At the time of IRF admission, he was able to tolerate bearing weight, perform transfers from sitting to standing and from a bed to a chair with minimal assistance, and walk 40 feet with minimal assistance. There was no expected need to modify the patient’s treatment to maximize the patient’s capacity to benefit from rehabilitation. The patient did not require a physician’s supervision at an acute rehabilitation level of care, interdisciplinary rehabilitation, or the intensity of acute-level rehabilitation. In addition, the documentation did not include all the required elements for the individualized, overall plan of care and the interdisciplinary team meetings.

Example 2: According to the medical review contractor, the patient had been treated during a 2-week, acute-care hospital stay for pneumonia caused by a fungal infection and then had acute kidney failure. Before that admission, she had been functionally independent. After the acute-care hospital stay, she was admitted to an IRF. The IRF preadmission screen identified that the patient had generalized weakness and impaired mobility and was suffering from malnutrition and anemia. At admission, the patient was (1) walking 100 feet without an assistive device, (2) performing activities of daily living with minor assistance, and (3) able to respond cognitively at a high level of complexity. The patient was limited by fatigue. The admitting IRF provider found the patient to be in stable condition and did not identify any further functional defects on the postadmission evaluation. She did not require interdisciplinary rehabilitation or the intensity of an acute-level rehabilitation program. In addition, the documentation did not include all the required elements for the individualized overall plan of care.

Among the many recommendations, the OIG provided as a result of their review were these two which should catch the eye of any compliance professional whose organization is involved in IRF services:

  • educate IRF clinical and billing personnel on Medicare coverage and documentation requirements and work with providers to identify, develop, and share compliance best practices that may lead to improved internal controls
  • increase oversight activities for IRFs, such as post-payment medical review, to determine compliance with coverage and documentation requirements, including a review of a subsample of the 135 IRFs in this review that had 1 or more sampled stays that did not comply with Medicare requirements

If you provide IRF services, it would be wise to read this report in its entirety. As always, if you need help give us a call.

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