Presumptive Compliance for IRFs: Are You Facing A Desk Audit?

A formal letter from your Medicare Administrative Contractor (MAC) is rarely a welcome surprise. For inpatient rehabilitation facilities (IRFs), a letter informing the provider that they have not met IRF classification requirements related to the 60 percent rule based on “presumptive methodology” and thus will be subject to “medical review methodology” is pretty much never welcome.

With a reported increase in IRFs undergoing medical review to validate compliance with the Centers for Medicare & Medicaid Services (CMS)-13 diagnostic categories, it is wise for providers to understand the process for ensuring ahead of time that they are adhering to the rules.

What is the requirement?

The classification requirements for IRFs specify that 60 percent of the total patient population served by the IRF must be treated for a condition listed in the CMS-13 list of diagnostic categories. Compliance with this requirement is tested annually by the MACs in order to ensure that the providers continue to meet the standard. The “test” for compliance can be done either through “presumptive” methodology or through medical review.

What is Presumptive Compliance?

“Presumptive methodology” allows a MAC to access the IRF-PAI data submitted for Medicare and Medicare Advantage patients. The software used to generate the IRF compliance review report automatically uses the specific diagnosis and impairment group codes listed in compliance rule specification files provided by Medicare. These are the same files utilized by third-party software vendors to generate similar reports for IRFs. The software program runs an algorithm that compares the coding on the IRF-PAI data submitted to a list of compliant ICD-10 codes and Impairment Group Codes (IGCs) to determine the number of cases that fall under certain qualifying criteria. If this percentage meets or exceeds the 60 percent compliance threshold, the IRF is presumed to be compliant with the requirement for the entire population (across all payers) and the IRF is approved for the reporting period.

What prompts a “desk audit” or medical review?

There are cases, however, when the presumptive methodology does not yield a positive result. In these cases, the IRF is then subject to a more in-depth validation process that requires medical review of a sampling of cases admitted during the review period. This same process of utilizing medical review versus the presumptive methodology also occurs when the IRF’s Medicare inpatient population (including both Medicare Fee-for-Service and Medicare Advantage patients) is less than 50 percent.

How does the audit process work?

When the medical review process is triggered, either through a Medicare utilization rate of under 50 percent or failure to meet the 60 percent requirement through the electronic review of the IRF-PAI date, the provider will be notified of the need for a medical review. This process includes:

  • Notification of the provider by the MAC
  • A request for a sample of inpatients for detailed review (this request will include a sample from the total IRF inpatient population, including Medicare and non-Medicare)
  • Review of the sample claims by medical review professionals at the MAC
  • A determination of CMS-13 compliance

Our own clients who have gone through this process have been successful in meeting compliance at this stage. However, if this stage of the audit yields a negative outcome, there is a process for appealing the decision.

What to do if you get a request?

  • Don’t panic – the request is part of normal operations at the MAC.
    • While the number of these types of audits is reportedly increasing, the process is not a new one; it has been in place for many years to ensure that providers have an opportunity to support their own calculations of compliance with the diagnostic categories.
  • Be responsive. The request for data is time-sensitive and the results will impact an IRF’s ability to maintain IRF status for the upcoming reporting period. It is imperative that the information be collected and submitted as quickly as possible. Additionally, IRFs should follow the specific instructions for presentation and submission of the record(s) for review.
  • Have someone who understands both inpatient rehabilitation and the rule review the record. Since the time frame for review is very short and the MAC will not accept additional information, IRFs should carefully review the documentation that will be submitted to ensure that it is complete, accurate, and readable.
  • Create a cover sheet for each claim. To assist the medical review staff in identifying documentation that supports the IRF’s belief that the patients meet one of the required diagnostic categories, prepare a cover sheet that indicates:
    • Whether you believe the case is compliant
    • Whether the case met “presumptive compliance” based on your third-party software report
    • Which of the diagnostic categories/clinical conditions the IRF determined were being met
    • An explanation of where the supporting documentation can be found in the record
    • For specific cases that might have fallen out due to coding issues, indicate any additional information that might support a CMS-13 condition
      • Arthritis: Detail the systemic activation or failed outpatient treatment and where to locate the supporting detail in the record.
      • Total joints related to age and/or weight: Indicate the date of birth and age at the time of admission and/or the BMI
      • Hip fractures: Detail the specific location of the fracture and where it is noted in the record (H&P, radiology report, surgical report from acute, etc.)

What’s the bottom line?

Failure to meet the CMS-13 requirement is extremely serious for an IRF. This would lead to being unable to continue as a Medicare-certified IRF for the coming year, as well as repayment/readjustment of the prior year’s revenues from Medicare. That combination can be extremely costly and could force an IRF to close. Careful attention to compliance rates throughout the year is critical to ensure success in the annual validation.

Print Friendly, PDF & Email
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

Pediatric SDoH: An Essential Guide to Accurate Coding and Reporting

Pediatric SDoH: An Essential Guide to Accurate Coding and Reporting

This webcast, presented by Tiffany Ferguson, LMSW, CMAC, ACM, addresses the critical gap in Social Determinants of Health (SDoH) reporting for pediatric populations. While SDoH efforts often focus on adults, this session emphasizes the unique needs of children. Attendees will gain insights into the current state of SDoH, new pediatric Z-codes, and the importance of interdisciplinary collaboration. By understanding and applying pediatric-specific SDoH factors, healthcare professionals can improve data capture, compliance, and care outcomes. This webcast is essential for those looking to enhance their approach to pediatric SDoH reporting and coding.

August 8, 2024
Oncology and E/M Services: Compliance, Medical Necessity, and Reimbursement

Oncology and E/M Services: Compliance, Medical Necessity, and Reimbursement

Join Becky Jacobsen, BSN, RN, MBS, CCS-P, CPC, CPEDC, CBCS, CEMC, VP of CDM, for a webcast addressing oncology service coding challenges. Learn to navigate coding for infusions and injections alongside Evaluation and Management (E/M) services, ensuring compliance and accurate reimbursement. Gain insights into documenting E/M services for oncology patients and determining medical necessity. This webcast is essential to optimize coding practices, maintain compliance, and maximize revenue in oncology care.

July 30, 2024
The Inpatient Admission Order: Master the Who, When, and How

The Inpatient Admission Order: Master the Who, When, and How

During this webcast Dr. Ronald Hirsch delves into the inpatient admission order process including when to get it, when it becomes effective, its impact on billing and payment, who can write it, how to cancel it, the effects on the beneficiary, and more. You’ll leave with a clear understanding of inpatient orders and guidelines for handling improper orders that you can implement immediately.

June 20, 2024
Navigating AI in Healthcare Revenue Cycle: Maximizing Efficiency, Minimizing Risks

Navigating AI in Healthcare Revenue Cycle: Maximizing Efficiency, Minimizing Risks

Michelle Wieczorek explores challenges, strategies, and best practices to AI implementation and ongoing monitoring in the middle revenue cycle through real-world use cases. She addresses critical issues such as the validation of AI algorithms, the importance of human validation in machine learning, and the delineation of responsibilities between buyers and vendors.

May 21, 2024
Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Optimize your inpatient clinical documentation and gain comprehensive knowledge from foundational practices to advanced technologies, ensuring improved patient care and organizational and financial success. This webcast bundle provides a holistic approach to CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. Participants will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.

June 26, 2024
Advanced Inpatient Clinical Documentation Integrity: Harnessing Technology, Analytics, and Compliance

Advanced Inpatient Clinical Documentation Integrity: Harnessing Technology, Analytics, and Compliance

Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P., as she helps you navigate advanced inpatient CDI technologies, regulatory changes, and system interoperability. Angela will provide actionable strategies for integrating AI and predictive analytics into CDI practices, ensuring seamless system interoperability, and maintaining compliance with evolving regulations. Attendees will learn to select and implement advanced EHR systems and CDI software, leverage data analytics to enhance documentation accuracy, and stay audit-ready with the latest compliance updates. Real-world case studies and practical tools will empower you to drive continuous improvement in CDI, improve patient outcomes, and enhance organizational efficiency. Don’t miss this opportunity to advance your CDI practices and stay ahead in this dynamic field.

July 11, 2024
Foundations of Inpatient Clinical Documentation Integrity: Enhancing Accuracy and Compliance

Foundations of Inpatient Clinical Documentation Integrity: Enhancing Accuracy and Compliance

Join expert Angela Comfort, MBA, RHIA, CDIP, CCS, CCS-P, for an insightful webcast on improving inpatient clinical documentation integrity (CDI). Inaccurate documentation can lead to misdiagnosis, improper treatment, and compromised patient safety. High workloads, lack of standardized practices, and outdated EHR systems contribute to these issues, affecting care quality and financial outcomes. Angela will offer practical strategies and tools to enhance accuracy, consistency, and timeliness in documentation. Attendees will learn to use standardized templates, checklists, and advanced EHR systems, while staying compliant with regulations. Improve patient care, ensure accurate billing, and reduce audit risks with actionable insights from this essential webcast.

June 26, 2024
Mastering E/M Coding: Navigating the Evolving Landscape

Mastering E/M Coding: Navigating the Evolving Landscape

Join industry expert, Kathy Pride, RHIT, CPC, CPMA, CCS-P, for an in-depth exploration of Evaluation and Management (E/M) coding, tailored for healthcare professionals navigating recent guideline changes. Dive into advanced topics beyond mere code selection, including shared visits, criteria for selecting E/M levels, and documentation best practices. Gain clarity on complex guideline terminology and ensure compliance with regulatory standards. This comprehensive session is essential for coders, auditors, educators, and practitioners seeking to enhance their proficiency in E/M coding and maximize revenue capture.

June 19, 2024

Trending News

Get 15% OFF on all educational webcasts at RACmonitor with code JULYFOURTH24 until July 4, 2024—start learning today!

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 →