Considering the increasing scrutiny of Inpatient Rehabilitation Facilities (IRFs) under Recovery Audit Contractor (RAC) review, IRFs are seeking ways to reduce their risk of denial under audits for medical necessity.

Regardless of the IRFs’ RAC region, such audits are focusing not only on the clinical issues that support medical necessity, but on the IRFs’ ability to meet the technical requirements of certain rules and regulations. While most of these requirements have been present in some form since the mid-1980s, the updated language that became effective on Jan. 1, 2010[i] added significant structure and clarity to the expectations for performance in these areas.

Recent RAC audits have demonstrated that the reviewers are applying these requirements when making claims determinations. Several areas in particular have presented difficulties for IRFs seeking to establish compliance; this is due to the time frames listed the regulations. With respect to time frames, IRFs are experiencing significant issues in three compliance areas: the pre-admission assessment (PAS), the post-admission physician evaluation (PAPE), and the individualized plan of care (IPOC).

Because successful performance in these areas demands not only timeliness but also proper content, organizations are being challenged to meet requirements connected to both.

The pre-admission assessment must be completed within 48 hours of admission to an IRF. In addition, the rehabilitation physician must review the assessment and make a determination of appropriateness for an IRF admission.

The physician approval must be issued in writing and must be signed, dated and timed before the patient is admitted to the IRF. If your organization utilizes a process that allows for the “pre-admission” of the patient though the business office, it is essential that you ensure that the actual admission time is recorded and that the date and time of the pending admission does not post to the account inadvertently. Since this requirement is based on clock hours, it is essential that all documentation be signed, dated and time-stamped.

The post-admission physician evaluation must be completed within 24 hours of patient admission. Again, the requirement is in clock hours. There is potential for denial with even a brief delay beyond the required time frames. 

The individualized plan of care must be developed no later than the fourth day of the patient stay. This requirement is listed in terms of calendar days, with the day of admission serving as day one. in other words, the plan of care for a patient admitted on Monday must be completed by Thursday (day four of the stay).

What can organizations do to improve their compliance, and how can they ensure that they meet the time requirements and reduce risk of denials in these areas? We recommend the following:

  • Educate key stakeholders.

    Key stakeholders, including clinical and administrative staff, should engage in ongoing education related to the time frame requirements and the difference between clock time and calendar days. When the requirement is in hours, the rules require clock time. When the requirement is in days, the rules allow a full calendar day(s) for completion. What this means is that treatment of a patient admitted on Monday at noon would meet the following requirements:

    • The pre-admission assessment would be completed and/or updated no earlier than noon on Saturday.
    • Post-admission physician evaluation, including the history and physical, would be completed, documented, signed, dated and timed no later than noon on Tuesday.
    • The interdisciplinary plan of care would be developed, signed, dated and timed by the end of the day on Thursday. 
  • Audit in multiple ways.

    Since process routines must be established in order to complete these tasks on time, it’s important to monitor how well you are doing now and whether you have an opportunity to improve. We recommend that you audit in three ways: first, with real-time audits – have a staff member audit current patients’ charts. How are you doing in terms of meeting the requirements? What are the barriers to your success? Next should be internal audits – periodically audit closed cases using a precise audit tool to see how well you are doing. Are your processes effective? Are there patterns of noncompliance you need to address?  Finally, consider a third-party audit. An external expert can provide very good information for you to use in evaluating your processes as well as your performance. As in any compliance review, be sure you engage your third-party auditor with legal counsel to assure that the report is privileged.

  • Create failsafe mechanisms to ensure compliance. Remember that failure to meet the time frames often represents a process issue rather than a people issue. While your organization should have processes in place that promote success, there are always opportunities to create better forms of checks and balances. Consider using electronic tools to trigger reminders that certain tasks should be completed. Build in layers of protection so that several individuals validate that those tasks are done. A best practice we have seen in some IRFs is this: when the nurse accepts reports just prior patient transfers, there is a “timeout,” during which the nurse validates that the preadmission has been approved, signed, dated and timed by the rehabilitation physician. There are many other options available to ensure that the time frame requirements are met.

The success of your IRF is dependent on meeting the requirements for payment. Don’t let time get away from you!

About the Author

Angela M. Phillips, PT is President & Chief Executive Officer of Images & Associates.  A graduate of the University of Pennsylvania, School of Allied Health Professions, she has over 35 years of experience as a consultant, healthcare executive, hospital administrator, educator and clinician.  Ms. Phillips is one of the nation’s leading consultants assisting acute rehabilitation units and hospitals in operating effectively under the Medicare Prospective Payment System (PPS) and in address key issues related to compliance.

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[i] The updated regulatory language can be found in the Medicare Benefits Payment Manual, Chapter 1, Section 110, Revision 119:

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