Medicare Compliance & Reimbursement

Compliance review periods governed by tricky CMS guidelines.

Inpatient rehabilitation facility qualification could become more difficult if a facility waits until July 2005 to apply for an IRF classification review.

The Centers for Medicare & Medicaid Services (CMS) clarified its IRF classification process, which allows facilities to receive reimbursement under the IRF Prospective Payment System, in an April 20 Medlearn Matters article. Your Medicare fiscal intermediary and CMS RO will determine a facility's IRF status annually at the beginning of its cost-reporting period.

How? The FI uses data from a facility's most recent, consecutive and appropriate 12-month cost reporting time period to review compliance with IRF classification
criteria. This compliance review period could include only one cost-reporting period or two periods spanning the sample 12 months.

A facility must meet a compliance threshold percentage to qualify as an IRF. If an FI uses two cost-reporting periods in its compliance review, both periods' average percentages are added together to determine a facility's compliance threshold percentage. This applies to cost-reporting periods starting on or after July 1, 2004.

Exception: If the review spans two cost-reporting periods starting on or after July 1, 2005, each portion must separately meet the compliance threshold percentage.