If approved, reviews would impact RAC Regions 1 through 4 in all states.
In November 2017, the Centers for Medicare & Medicaid Services (CMS) announced that proposed Recovery Auditor (RAC) review topics would be posted. These topics, which have been proposed, but not yet approved, are available on the Medicare Provider Resources web page. This process is intended to give organizations a heads-up about what reviews are likely to be coming in the future. While complex medical review for Inpatient Rehabilitation Facilities (IRFs) was proposed at that time of the posting, it too was not approved.
Fast forward to Aug. 8, 2018, when CMS posted 10 more proposed topics, including a potential complex medical review for IRFs: 0A024-Inpatient Rehabilitation Facility (IRF) Stays: Meeting Requirements to be considered Reasonable and Necessary. So clearly, IRFs are back in the spotlight as it pertains to potential RAC reviews.
How Do RACs Choose Issues for Proposed Review?
Recovery Auditors propose issues based on the use of complex and proprietary algorithms to analyze claim data, which focus on the likelihood of error. Based on the error rates the industry has seen in other audits – often initiated using similar data mining – it’s no surprise that the RACs would propose a review of IRFs. And because the criteria in the Medicare Benefit Policy Manual includes specific documentation elements, it’s also not surprising that complex medical reviews are being proposed.
How Many Records Could be Reviewed?
There are additional documentation request (ADR) limits, calculated by CMS and provided to the RACs, based on the total number of paid Medicare claims from the prior year and adjusted based on the provider’s compliance. The annual ADR limit is one-half of one percent (0.5 percent) of the provider’s total claims.
ADR letters are sent on a 45-day cycle, with the cycle limit calculated by dividing the annual limit by eight. As previously noted, CMS will adjust a provider’s ADR limit based on a provider’s compliance, and providers with low denial rates will have ADR limits decreased while providers with high denial rates will have their limits increase.
So, What Now?
If approved, the reviews would impact RAC Regions 1-4 in all states, and will likely include a review of how well each IRF meets the January 2010 clarifications for reasonable and necessary care in an IRF – the same areas that have been consistently reviewed by Medicare Administrative Contractors (MACs) in probe-and-educate reviews, by Special Medical Review Contractors (SMRCs), and in the current Targeted Probe and Education (TPE) program.
What’s the Bottom Line?
Proposed topics are posted for 30 days. We’ll be watching the postings and let our readers know if this issue gets approved.
EDITOR’S NOTE: The author of this article used AI-assisted tools in its composition, but all content, analysis, and conclusions were based on the author’s professional
The Centers for Medicare & Medicaid Services (CMS) operates a surveillance platform called the Fraud Prevention System (FPS) that analyzes Medicare claims across the full
Please log in to your account to comment on this article.
Gain clarity and confidence in OB‑GYN coding with this expert‑led webcast featuring Stacey Shillito, CDIP, CPMA, CCS, CCS‑P, CPEDC, COPC. You’ll learn how to apply global maternity package rules accurately, select the right CPT codes for procedures and visits, and identify documentation gaps that lead to denials. With practical guidance and real examples, this session helps you strengthen compliance, reduce audit risk, and ensure accurate reimbursement for women’s health services.
Uncover essential coding insights with nationally recognized coding authority Kay Piper, RHIA, CDIP, CCS. Through ICD10monitor’s interactive, on‑demand webcast series, Kay walks you through the AHA’s 2026 ICD‑10‑CM/PCS Quarterly Coding Clinics, translating each update into practical, easy‑to‑apply guidance designed to sharpen precision, ensure compliance, and strengthen day‑to‑day decision‑making. Available shortly after each official release.
Uncover critical guidance on the ICD-10-CM/PCS code updates. Kay Piper reviews and explains ICD-10-CM/PCS coding guidelines in the AHA’s fourth quarter 2026 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Uncover critical guidance on the ICD-10-CM/PCS code updates. Kay Piper reviews and explains ICD-10-CM/PCS coding guidelines in the AHA’s third quarter 2026 ICD-10-CM/PCS Coding Clinic in an easy to access on-demand webcast.
Federal auditors are intensifying their focus on inpatient psychiatric facilities, using advanced data analytics to spotlight outliers and pursue high‑dollar repayments. In this high‑impact webcast, Michael Calahan, PA, MBA, Compliance Officer and V.P., Hospital & Physician Compliance, breaks down what regulators are really targeting in IPF-PPS admissions, documentation, treatment and discharge planning. Attendees will learn practical steps to tighten processes, avoid common audit triggers and protect reimbursement and reduce the risk of multimillion-dollar repayment demands.
In this timely session, Stacey Shillito, CDIP, CPMA, CCS, CCS-P, CPEDC, COPC, breaks down the complexities of Medical Decision Making (MDM) documentation so providers can confidently capture the true complexity of their care. Attendees will learn practical, efficient strategies to ensure documentation aligns with current E/M guidelines, supports accurate coding, and reduces audit risk, all without adding to charting time.
Join Ronald Hirsch, MD, FACP, CHCQM for The PEPPER Returns – Risk and Opportunity at Your Fingertips, a practical webcast that demystifies the PEPPER and shows you how to turn complex claims data into actionable insights. Dr. Hirsch will explain how to interpret key measures, identify compliance risks, uncover missed revenue opportunities, and understand new updates in the PEPPER, all to help your organization stay ahead of audits and use this powerful data proactively.
Stay ahead of the 2026-2027 audit surge with “Top 10 Audit Targets for 2026-2027 for Hospitals & Physicians: Protect Your Revenue,” a high-impact webcast led by Michael Calahan, PA, MBA. This concise session gives hospitals and physicians clear insight into the most likely federal audit targets, such as E/M services, split/shared and critical care, observation and admissions, device credits, and Two-Midnight Rule changes, and shows how to tighten documentation, coding, and internal processes to reduce denials, recoupments, and penalties. Attendees walk away with practical best practices to protect revenue, strengthen compliance, and better prepare their teams for inevitable audits.
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 →
BLOOM INTO SAVINGS! Get 25% OFF during our spring sale through March 27. Use code SPRING26 at checkout to claim this offer.
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
