Edits and Audits: MAC Activities Related to IRFs

Inpatient rehabilitation facilities (IRFs) continue to face audits for multiple agencies, and additional documentation requests (ADRs) have become routine rather than the exception. In our last article, we encouraged IRFs to stay focused through 2017 on establishing processes to monitor compliance with the documentation requirements to support IRF claims. The question seems to be not “who’s auditing now?” but “who isn’t?”

In this article, we will look at some of the Medicare Administrative Contractors’ (MACs’) activities over recent months and provided some updates based on their reported activities from their own websites. While not all the MACs have posted issues and/or results of recent reviews, several MACs are actively reviewing IRFs, and we’ve summarized that information below.

WPS Government Health Administrators

WPS completed prepayment reviews for CMGs 0701-0704 and/or 0801-0806, regardless of tier level, during the period of Oct. 1, 2016 through Dec. 31, 2016.  Of the 288 claims reviewed, 97 of them were denied in full related to the following documentation issues:

  • Documentation did not support that upon admission to the IRF, the patient required intensive rehabilitation therapy services that are uniquely provided in IRFs;
  • Documentation did not support that the patient’s medical management and rehabilitation needs demanded an inpatient stay and close physician involvement; and
  • Documentation was insufficient to support that the service(s) billed met Medicare technical requirements and medical necessity guidelines.

Cahaba

Current prepayment reviews continued for CMGS A0801-A0804 and A2001-A2004 in Alabama, Georgia, and Tennessee, as well as D0801-D0804 in the state of Alabama.

These issues have been ongoing for Cahaba, and there doesn’t appear to be an end date. Orthopedic and debility cases are frequently denied for several reasons.

CGS Administrators

On Jan. 9, 2017, CGS posted an informational article on Comprehensive Error Rate Testing (CERT) errors and common denial reasons noted in CGS’s CERT reviews. Five common reasons for denial by CERT were listed as:

Noridian

Noridian has been completing focused reviews in California and Nevada since September 2014, and we have previously reported findings from those reviews. The most recent review period was from Oct. 1, 2016 through Dec. 31, 2016. Of 346 claims reviewed, 247 of them were denied for the following reasons: 

  • Documentation did not support that the minimum intensity requirements were consistently met for the provision of therapy services (reason for the largest majority of claims denials); and
  • Documentation requirements were not consistently met for the post-admission physician evaluation, preadmission screening, individualized overall plan of care, interdisciplinary team conference, and medical necessity of the IRF.

In Oregon, 55 of 179 claims reviewed from May 2, 2016 through Nov. 8, 2016 were denied – an overall error rate of 31 percent. Not surprisingly, the reasons for denial were identical to those in California and Nevada. 

In Washington, 255 claims were reviewed from Feb. 27, 2016 through Oct. 25, 2016, with 55 claims being denied in full for an error rate of 22 percent. Again, the denial reasons matched those in Noridian’s other samples.

Novitas

Novitas continues to have active edits for prepayment review for the following CMGs: A0701, A0702, A0703, A0704, A0801, A0802, A0803, A0804, A0805, and A0806 – all of them orthopedic, and these include hip fractures, which are important to IRFs in meeting CMS-13 compliance.

Other communications from Novitas list the common documentation errors for claims reviewed: 

  • Missing documentation to support that the rehabilitation physician has specialized training or experience in inpatient rehabilitation;
  • The beneficiary did not receive the required amount of therapies, or a significant portion of the therapies were provided in group or concurrent settings;
  • Time requirements for preadmission screening and post-admission evaluations were not met; and
  • The interdisciplinary team meeting notes were missing.

Palmetto GBA

On Dec. 5, 2016, Palmetto posted notifications of prepayment review on all fracture of the lower extremity CMG codes, 0701-0704 for all tier levels (A thru D).

In Palmetto’s web-based IRF training on Feb. 15, 2017, it outlined the common reasons for denial on recent CERT reviews, mainly due to documentation issues:

  • Missing required documentation;
  • One or more of the following documents were missing:  preadmission screening, post-admission physician evaluation, interdisciplinary team meeting notes, plan of care developed by rehabilitation physician;
  • Signatures were:
    • Missing, incomplete, or illegible, including the lack of professional credentials and/or inconsistent e-signature entry;
  • Missing or unsigned admission order to the IRF; and
  • Timeliness of completion for the preadmission assessment and post-admission physician evaluation.

And Don’t Forget the OIG

The 2017 U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) Work Plan continues prior reviews of whether IRFs billed claims in compliance with Medicare documentation and coverage requirements, and it adds a new focus on doing case reviews of IRF patients who might not be suited for intensive therapy.

And Supplemental Medical Review Contractor (SMRC) Reviews

StrategicHealthSolutions, the current SMRC, is conducting post-payment medical review of IRF services. Prior reviews by the SMRC have resulted in error rates as high as 90 percent being recorded, although StrategicHealthSolutions reports improvements in performance in more recent audits.

What Are the Trends?

While the focus of the reviews continues to be on the detailed documentation requirements to support medical necessity that were updated in January 2010, we see two things trending in the process:

  • Technical Denials

There are many denials that occur because IRFs fail to meet specific timing or detail requirements for the payment of services. And while there has been some improvement in this area, these errors and subsequent denials continue to plague the industry.

Examples include: 

  • Completion of the post-admission physician evaluation more than 24 Hours after admission;
  • Failure to meet the intensity-of-therapy requirements – three hours of therapy a minimum of five days per week, or in well-documented exceptions, at least 15 hours per week; and
  • Attendance at the weekly team meeting of the required attendees.
  • A Higher Scrutiny of Therapy Services

In recent audits, we have seen denials specifically related to therapy services, including: 

  • Patients denied because the preadmission assessment did not demonstrate that “at the time of admission” the patient could reasonably be expected to participate in intensive therapy;
  • Denials based on lack of specificity of therapy intensity, frequency, and duration in the individualized plan of care;
  • Lack of documentation to support that the patient received the requisite levels of therapy service; and
  • Denials when the preponderance of therapy minutes was not 1:1 but the patient had a high percentage of group and/or concurrent care.

The Bottom Line

IRFs should be well-prepared for the bigger focus on therapy requirements as the auditing process continues to evolve, and they should incorporate practices into each phase of the IRF care delivery and documentation process to ensure compliance.

Our next article will focus on therapy compliance and provide some tips and tools for IRFs in monitoring this area.

Facebook
Twitter
LinkedIn

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.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

The Cost of Ignoring Risk Adjustment: How HCCs Impact Revenue & Compliance

The Cost of Ignoring Risk Adjustment: How HCCs Impact Revenue & Compliance

Stop revenue leakage and boost hospital performance by mastering risk adjustment and HCCs. This essential webcast with expert Cheryl Ericson, RN, MS, CCDS, CDIP, will reveal how inaccurate patient acuity documentation leads to lost reimbursements through penalties from poor quality scores. Learn the critical differences between HCCs and traditional CCs/MCCs, adapt your CDI workflows, and ensure accurate payments in Medicare Advantage and value-based care models. Perfect for HIM leaders, coders, and CDI professionals.  Don’t miss this chance to protect your hospital’s revenue and reputation!

May 29, 2025
I050825

Mastering ICD-10-CM Coding for Diabetes and it’s Complications: Avoiding Denials & Ensuring Compliance

Struggling with ICD-10-CM coding for diabetes and complications? This expert-led webcast clarifies complex combination codes, documentation gaps, and sequencing rules to reduce denials and ensure compliance. Dr. Angela Comfort will provide actionable strategies to accurately link diabetes to complications, improve provider documentation, and optimize reimbursement—helping coders, CDI specialists, and HIM leaders minimize audit risks and strengthen revenue integrity. Don’t miss this chance to master diabetes coding with real-world case studies, key takeaways, and live Q&A!

May 8, 2025

Trending News

Featured Webcasts

Navigating the 3-Day & 1-Day Payment Window: Compliance, Billing, and Revenue Protection

Navigating the 3-Day & 1-Day Payment Window: Compliance, Billing, and Revenue Protection

Struggling with CMS’s 3-Day Payment Window? Join compliance expert Michael G. Calahan, PA, MBA, CCO, to master billing restrictions for pre-admission and inter-facility services. Learn how to avoid audit risks, optimize revenue cycle workflows, and ensure compliance across departments. Critical for C-suite leaders, providers, coders, revenue cycle teams, and compliance teams—this webcast delivers actionable strategies to protect reimbursements and meet federal regulations.

May 15, 2025
Audit-Proof Your Wound Care Procedures: Expert Insights on Compliance and Risk Mitigation

Audit-Proof Your Wound Care Procedures: Expert Insights on Compliance and Risk Mitigation

Providers face increasing Medicare audits when using skin substitute grafts, leaving many unprepared for claim denials and financial liabilities. Join veteran healthcare attorney Andrew B. Wachler, Esq., in this essential webcast and master the Medicare audit process, learn best practices for compliant billing and documentation, and mitigate fraud and abuse risks. With actionable insights and a live Q&A session, you’ll gain the tools to defend your practice and ensure compliance in this rapidly evolving landscape.

April 17, 2025
Utilization Review Essentials: What Every Professional Needs to Know About Medicare

Utilization Review Essentials: What Every Professional Needs to Know About Medicare

Dr. Ronald Hirsch dives into the basics of Medicare for clinicians to be successful as utilization review professionals. He’ll break down what Medicare does and doesn’t pay for, what services it provides and how hospitals get paid for providing those services – including both inpatient and outpatient. Learn how claims are prepared and how much patients must pay for their care. By attending our webcast, you will gain a new understanding of these issues and be better equipped to talk to patients, to their medical staff, and to their administrative team.

March 20, 2025

Rethinking Observation Metrics: Standardizing Data for Better Outcomes

Hospitals face growing challenges in measuring observation metrics due to inconsistencies in classification, payer policies, and benchmarking practices. Join Tiffany Ferguson, LMSW, CMAC, ACM, and Anuja Mohla, DO, FACP, MBA, ACPA-C, CHCQM-PHYADV as they provide critical insights into refining observation metrics. This webcast will address key issues affecting observation data integrity and offer strategies for improving consistency in reporting. You will learn how to define meaningful metrics, clarify commonly misinterpreted terms, and apply best practices for benchmarking, and gain actionable strategies to enhance observation data reliability, mitigate financial risk, and drive better decision-making.

February 25, 2025

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24