Medicare Compliance & Reimbursement

Newly enforced requirement comes as a surprise to many.

Medicare's fiscal intermediaries have received their marching orders to clamp down on inpatient rehab facilities whose documentation doesn't prove medical necessity - and the aftermath could shutter 40 percent of IRFs.

That's according to consultant Fran Fowler with Fowler Healthcare Affiliates in Atlanta, who has seen some IRFs receive a 60-80 percent denial rate on medical necessity, she tells MLR.

The key to success: IRFs need to prove to FIs that their patients require therapy in an inpatient setting. The situation: When the Centers for Medicare & Medicaid Services released the revised 75-percent rule in May 2004, the agency gave FIs the green light to audit for medical necessity - not just rehab necessity. That means instead of merely showing why the patient needs inpatient rehab, IRFs must have documentation to show why the patient needs the care of a physician. Without medical necessity, rehab necessity is a moot point.

CMS now is urging FIs to throw down the gauntlet on this front, and IRFs can expect to see therapy denials piling up for lack of medical necessity. Intermediaries are under "a lot of pressure to tighten up their review, and you're going to see them get more and more aggressive," Fowler predicts. In fact, "every IRF should assume they will be audited," warns consultant Ann Lambert Kremer with Beacon Rehab Solutions in Portland, ME. Physician Education Is Key The challenge: The real kicker in this situation is that the IRF must rely primarily on the physician's documentation to prove medical necessity, notes Jason Levine with Murer Consultants Inc. in Joliet, IL. "The smart people are getting physicians educated and doing chart audits all the time," Fowler says.

When auditing charts, IRFs should start by asking why the patient is receiving inpatient rehab services. If the chart alone doesn't answer that question with perfect clarity, there's a problem.

A common reason for medical necessity denials for IRF services stems from the referring physician noting that the patient had an "uneventful stay" in the hospital or was "stable" in acute care, Fowler says. In the FI's view, if either of these scenarios was really the case, then the patient has no need for therapy in the IRF - thus, the FI will deem the therapy medically unnecessary.

You also must ensure that the physician assessments, orders and progress notes contain the following, Kremer counsels:   Documentation of the patient's potential to benefit from inpatient rehab. 
  Specific skilled therapy and nursing services required to achieve medically desired results.
  Expected frequency and duration of services.
  Description of comorbidities that enable coders to code to the necessary level of specificity. "The pivotal person is the physician," Fowler insists. "If he [...]