About 81 percent of inpatient rehabilitation facility (IRF) claims examined in a recent Office of Inspector General (OIG) report were overpaid.

Inpatient rehabilitation facilities must electronically transmit the patient assessment instrument for each stay within 27 days of the beneficiary’s discharge date or face a 25-percent cut in their payments.

OIG sampled 108 claims with dates of service in 2009 and 2010 and found 88 claims that did not receive reduced payments even though the patient assessment instruments were submitted to the National Assessment Collection Database after the 27-day deadline, the report stated.

As evidence that late-submission payments are problematic, all four recovery auditors (RACs) have seized on this issue and posted it as a target.

Fraud news

Two whistleblower cases are in the news:

  • The government has intervened in a whistleblower case alleging that Orlando, Fla.-area Hospice of the Comforter Inc. submitted false claims to Medicare for patients who were not terminally ill, a requirement of the hospice benefit, the Justice Department stated. The lawsuit, brought by the hospice’s former vice president of finance, states that the hospice’s CEO instructed employees to admit Medicare patients even when it was not clear they were eligible, the Justice Department states. When the hospice was notified it would be audited, it discharged at least 150 patients as being ineligible, according to the Justice Department.
  • New York Downtown Hospital will pay $13.4 million to settle charges that it ran an uncertified inpatient detoxification program from July 1998 through February 2006, according to the U.S. Attorney’s Office in eastern New York. The hospital was not allowed to bill Medicare and Medicaid without the certification. A government investigation also discovered that the hospital paid Special Care Hospital Management Corporation for patient referrals, a violation of state and federal anti-kickback laws, the U.S. Attorney’s Office stated.

RAC News

Just one RAC, Region A’s Performant Recovery, posted an issue this week. It relates to complex acute care hospital-to-hospital transfers erroneously reported as discharges.

Inpatient hospital

Name of issue

Date posted or approved

Regions/states where it is active

Description of issue

Document sources

Complex acute care hospital-to-hospital transfers


Conn., D.C., Del., Maine, Mass., N.H, N.J., N.Y., Pa., R.I., Vt.

Identification of overpayments resulting from transfers incorrectly reported as discharges.

42 CRF 412.4; CMS Pub. 100-08 chapter 6; CMS Pub. 100-04 chapter 3; CMS Transmittal 87 CR 2934; OIG reports A-06-00-00041, A-06-93-00095

About the Author

Karen Long is the editor of Physician Solutions for DecisionHealth and oversees products that relate to fraud and abuse and HIPAA compliance for physician offices and home health agencies, and accreditation compliance for hospitals. In her almost four years at DecisionHealth, Karen also has been the compliance editor and a reporter for Home Health Line, nation’s leading independent authority on home healthcare business, regulation and reimbursement.

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