The Office of the Inspector General (OIG) recently discovered $5.7 billion in unreasonable and unnecessary payments to inpatient rehabilitation facilities (IRFs) after a sample audit. The review was prompted by Medicare spending of about $7 billion on IRF stays in 2013, leading the OIG to question the payment system.
The OIG sampled 220 IRFs after prior reviews discovered many hospitals were noncompliant with the Medicare coverage and documentation requirements for inpatient rehab facilities. The Centers for Medicare and Medicaid Services (CMS) also found a significant increase in the IRF error rate from 2012 to 2016 – jumping 53 percent in just four years.
The audit states, in part: “No Medicare payment may be made for items or services that are not reasonable and necessary for diagnosing or treating illness or injury or for improving the functioning of a malformed body member.”
Only 45 out of the 220 sampled IRFs were compliant with Medicare coverage and documentation requirements deemed “reasonable and necessary care.” The OIG attributed the errors of the remaining 175 sampled stays to inadequate internal controls, among other factors. Read the full audit.
Reviewers determined that appropriate care for the 146 stays that failed to meet Medicare coverage requirements should have been met with individual therapy interventions, instead of the intense interdisciplinary program with rehabilitation physician supervision billed to Medicare.
Stays that did not meet coverage requirements were predominately 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 repair 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); or
- Inability to participate in intense rehabilitation and demonstrate measurable improvement of practical value to the patient (17 stays).
The OIG recommended that CMS reevaluate the IRF payment system, increase oversight of IRF activities, and educate IRF clinical and billing personnel on Medicare coverage and documentation requirements. CMS responded by concurring with the OIG’s recommendations.
In a letter to the Inspector General, CMS Administrator Seema Verma said, “CMS uses a robust program integrity strategy to reduce and prevent Medicare improper payments, including automated system edits within the claims processing system, and conducting prepayment and postpayment reviews.”
To view the full audit, visit the OIG’s site.
Check out Fierce Healthcare’s article for their take,
Or read Health Leaders’ piece.