A Look Ahead: What’s on the Horizon for IRFs in 2020

The audit environment is unlikely to improve.

On Monday, Jan. 14, the Monitor Mondays panel of experts came together to celebrate the 10th anniversary of the launch of the weekly broadcast, and we provided our listeners with some perspective on what to expect in the coming year. The following is a brief summary of what will be in store for Inpatient Rehabilitation Facilities (IRFs) – and, to some extent, for all post-acute care (PAC) settings.

The entire healthcare arena will be addressing regulatory changes, as well as ongoing audits from multiple programs, throughout 2020. Requirements of the Improving Medicare Post-Acute Care Transformation (IMPACT) Act will continue to be implemented, including increasing requirements for the collection of data that is standardized across PAC settings. Additionally, there appears to be no relief in sight from the myriad of audits that providers routinely face.

IRF Reimbursement Perspective

  • Following the transition to CMG placement, and thus payment for IRF services being based on an algorithm that includes the use of quality indicator GG Scores for functional status, organizations are reporting ongoing training issues with the scoring system. We expect that the Centers for Medicare & Medicaid Services (CMS) will continue providing educational resources and tools to assist all PAC providers in educating staff for appropriate scoring of these quality indicators. Additionally, IRFs will need to address documentation templates to ensure that scores are accurately captured and that there is appropriate documentation to support the scores reporting on the IRF-PAI.
  • While it would be premature to predict actual payment increases for Oct. 1, 2020, it is likely that CMS will follow a pattern similar to the 2-percent averages we have seen in recent years. IRFs should be vigilant about engaging in any discussion of value related to the weighting of the motor scores to establish CMG placement, which was deferred a year ago. It is likely that this issue will resurface in future rules.
  • IRFs should prepare for the increased administrative burden of collecting more data, including items related to the social determinants of health (SDoH) included in the pending changes to the IRF-PAI.
  • We expected continued discussions and movement toward site-neutral/unified payment, wherein the payment is the same across all PAC settings, and based on patient characteristics. We believe that the ongoing alignment of the quality indicators collected across all PAC settings supports our prediction here.

The Audit Environment Is Unlikely to Improve
IRFs remain subject to both pre-payment and post-payment reviews, and IRF cases remain on the issue lists for all key audit programs. Additional documentation requests (ADRs) can come from a variety of auditors, including the following:

  • S. Department of Health and Human Services (HHS) Office of Inspector General (OIG)

IRFs should watch for ongoing OIG audits that focus on IRF patients. The algorithm used to select organizations for OIG review appears to highlight organizations with IRF units, and the OIG typically reports high error rates in IRF cases reviewed. Additionally, the OIG continues to push for a “pre-authorization” process for fee-for-service (FFS) Medicare cases, although there is no precedent for this in other PAC settings.

  • Supplemental Medical Review Contractor (SMRC)

Noridian, the current Supplemental Medical Review Contractor, is conducting an ongoing project for a post-payment review of IRF claims from 2018. The claims reviewed are generally targeted based on the potential for a higher error rate. On a positive note, Noridian appears to be requesting smaller numbers of claims than their predecessor.

  • Recovery Auditors (RAs)

RA reviews also continue, and while there are limits to the number of claims that can be requested in any review cycle – currently half of one percent per year, divided by eight cycles per year – the number of claims that can be reviewed in future cycles can increase dramatically based on your denial rate. Thus, for small organizations with only a few claims being reviewed, a single denial can result in a high error rate, and thus greatly increasing the number of ADRs allowed.

  • Targeted Probe-and-Educate (TPE)

The TPE process continues, and all Medicare Administrative Contractors (MACs) have IRF cases included in their issues lists. Of note, many organizations that were initially involved in TPE have now met the requirements to end the review.

Quality Indicator Data Collection and the IRF-PAI
The updated Inpatient Rehabilitation Facility Patient Assessment Instrument (IRF-PAI) Version 4, along with the change table related to it, is available for download from the CMS website. The change table – 28 pages in length – delineates the revisions to this form, which include substantial increases in data collection.  In addition to the new elements on the form, there is now a requirement for collection of some existing items at both admission and discharge. These changes include the following:

  • Updates to data collected on race and ethnicity.
  • Addition of many items, including hearing, vision, preferred language, health literacy, transportation, social isolation, data on the impact of pain on sleep, day-to-day activities, and participation in therapy.
  • Documentation of the provision of medication reconciliation lists to the patient and the next provider.
  • Significant expansion of items related to mental status and cognition.
  • Addition of data collection on nutritional approaches, high-risk drug classes, and special treatments.

IRFs should review these elements now and ensure that they are included in clinical documentation forms and templates relatively soon, in order to implement training for documentation and collection of these items.

Programming Note: Listen to Angela Phillips’ report this story live during Monitor Mondays, Feb. 3, 10-10:30 a.m. EST.


Angela Phillips, PT

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 almost 45 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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