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CMS Guidance to Lower Claim Denials for Inpatient Rehab Facilities

Inpatient rehabilitation facilities can expect fewer claim denials after new CMS guidance stops auditors from denying claims based solely on time-based therapy requirements.

Claim denials and inpatient rehabilitation facilities

Source: Thinkstock

By Jacqueline LaPointe

- CMS recently clarified that contracted auditors should not give inpatient rehabilitation facilities claim denials solely because the services did not meet time-based therapy requirements.

The guidance, which will go into effect on March 23, stated that auditors “shall use clinical review judgment to determine medical necessity of the intensive rehabilitation therapy program based on the individual facts and circumstances of the case, and not on the basis of any threshold of therapy time.”

Medicare currently denies inpatient rehabilitation claims if the services detailed in the claim submission do not include three hours of therapy per day at least five days per week or least 15 hours of intensive rehabilitation therapy within a seven-consecutive day period.

The Medicare reimbursement policy applies to physical therapy, occupational therapy, speech-language pathology, or prosthetics/orthotics.

Inpatient rehabilitation providers can face a claims denial by missing just a couple minutes of therapy unless they properly document the reason a patient missed minutes of therapy. For example, the patient may be also undergoing chemotherapy or dialysis and need to miss therapy time for other healthcare services.

But inpatient rehabilitation facilities can also receive a claim denial even if non-clinical reasons spur patients to miss therapy. The organizations can arrange to make-up the missed time within a certain period, but the time-based requirements have still challenged inpatient rehabilitation facilities.

Under the new guidance, Medicare Administrative Contractors (MACs), Supplemental Medical Review Contractors (SMRCs), Recovery Audit Contractors (RACs), and the Comprehensive Error Rate Testing (CERT) Program will further review any inpatient rehabilitation claims that do not meet time-based therapy requirements, rather than outright deny the claim.

The clarified Medicare reimbursement policy for inpatient rehabilitation claims also stated that auditors cannot deny claims solely because the situation or rationale that justifies group therapy is not submitted in response to an Additional Development Request (ADR).

Although inpatient rehabilitation care is individualized therapy, typically through one-on-one sessions, group and concurrent therapy can be prescribed on a limited basis. Providers need to document in a patient’s medical record at the inpatient rehabilitation facility if group or concurrent therapy better meets the care needs of a patient on a limited basis.

MACs, SMRCs, RACs, and the CERT program typically submit an ADR to inpatient rehabilitation facilities when a justification in the medical review is missing. Providers have a specific amount of time to give Medicare the required documentation or face a claim denial.

However, the recent announcement explained that auditors should not deny these claims solely because an inpatient rehabilitation facility fails to submit the justification for group therapy.

Under the guidance document, inpatient rehabilitation facilities should expect fewer claims denials, explained industry experts at the law firm Hall, Render, Killian, Heath & Lyman PC. But the facilities should focus on maintaining thorough documentation in light of the guidance document.

“IRFs should continue to thoroughly document all coverage requirements, including therapy intensity, as described in the Medicare Benefit Policy Manual to demonstrate compliance with the reasonable and necessary requirements for reimbursement of IRF claims,” experts wrote. “A Medicare beneficiary’s IRF medical record should include sufficient detail to demonstrate the patient required the intensive rehabilitation services provided by IRFs, regardless of whether the therapy hour thresholds were met.”


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