The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) published in May an updated edition of the 2015 work plan that outlines OIG audits, evaluations, and ongoing legal and investigative initiatives.

The mid-year update removed items that have been completed, postponed, or canceled and includes items that have been added since October 2014. One of those changes – a newly added focus on the inpatient rehabilitation facility (IRF) payment requirements introduced in January 2010 – sends a strong message to IRFs that there will be ongoing and stringent review of those technical and documentation requirements, and the healthcare industry needs to take notice!

Adverse Effects in Post-Acute Care

As part of the original 2015 work plan, the OIG planned to estimate the national incidence of adverse and temporary harm events for Medicare beneficiaries receiving post-acute care in IRFs. Part of that work includes the identification of factors that contributed to the events, determination of the extent to which the events were preventable, and estimation of the associated costs to Medicare of treating the results of adverse effects. While there were no changes made to this portion of the work plan constituting efforts made in 2014, we expect to see a report on the extent and cost of adverse effects for patients in inpatient rehabilitation in the near future. 

While we only have seen a few requests for records from IRFs within our client base filed by the Office of Evaluation and Inspections (OEI), which is handling this issue, we believe that the future report will provide a measurement of the extent and cost of adverse effects, along with recommendations to reduce the number of such events where possible. 

Newly Added: IRF Payment System Requirements

This work project will be completed by the Office of Audit Services (OAS) and will involve the review of all documentation and coverage requirements specified in 42 CFR § 412.622(a) (3) (4) and (5). These are the updated requirements for IRF documentation that went into effect in January 2010 and which we have addressed repeatedly in prior articles. It’s no surprise that the OIG has noted how poorly IRFs have fared in audits performed by other auditing groups.

What This Means for IRFs

As we’ve noted in prior articles, while IRFs have had some relief from Recovery Auditors, inpatient rehabilitation claims are still under scrutiny from a wide range of other auditors, including Medicare Administrative Contractors (MACs), Comprehensive Error Rate Testing (CERT) contractors, Zone Program Integrity Contractors (ZPICs), and Supplemental Medical Review Contractors (SMRCs). Historically, audits by these groups have resulted in very high rates of denial and/or reports of high error rates. Now, IRFs can expect increasing focus by the OIG. 

Reports of work done at all levels consistently show that IRF claims continue to be denied at high rates due to issues related to the requirements for preadmission screening, post-admission physician evaluation, individualized plans of care, team meetings, physician oversight, and intensity of therapy services. There are both time frame requirements and documentation content requirements that frustrate IRF stakeholders and can result in denials when claims are audited. Even when the patient’s clinical picture documented in the medical record supports that it is “reasonable and necessary” for a patient to receive care in an IRF, the claim can be denied for failure to meet these technical requirements that the Centers for Medicare & Medicaid Services (CMS) has clearly outlined in various manuals.

The biggest concern is that the regulations being addressed in the reviews have been in effect for quite some time, yet IRFs continue to struggle with meeting both the time frames for completion of specific tasks and the documentation requirements to support reasonable and necessary care. It is critical that IRFs address these deficiencies immediately though internal and external auditing processes and performance improvement projects that result in compliance, or they will face exposure to ongoing claim denials for failure to do so. 

About the Author

Angela M. Phillips, PT, is president and chief executive officer of Images & Associates. A graduate of the University of Pennsylvania’s 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 inpatient rehabilitation facilities in operating effectively under the Medicare Prospective Payment System (PPS) and in addressing key issues related to compliance.

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