This notice is a reissue of the Provider Notice 04-018.

Background:

Section 1886 (j) of the Social Security Act provides for the implementation of a prospective payment system under Medicare for inpatient hospital services furnished by a rehabilitation hospital or a rehabilitation unit of a hospital (IRF).  Existing regulations at 42 CFR 412.604 describe the conditions that must be met for an IRF to be paid under the IRF PPS.  The Medicare Program Integrity Manual, Section 1.1.2 describes the types of facilities reviewed by the fiscal intermediary, including Inpatient Rehabilitation Facilities.  In accordance with the Centers for Medicare and Medicaid Services (CMS) instructions, Highmark Medicare Services plans to issue periodic education articles to promote compliance with regulatory guidelines and minimize claim denials related to coverage and medical necessity issues.

Purpose

The purpose of this notice is to remind the provider community of the general requirements, orders, plan of care, and physician supervision for inpatient rehabilitation facilities.

General

Patients that require intense, multi-disciplinary, coordinated care to improve their ability to function may need an inpatient hospital level of care.  There are 2 basic requirements that must be met for inpatient hospital stays for rehabilitation care to be covered:

1. The services must be reasonable and necessary (in terms of efficacy, duration, frequency, and amount) for the treatment of the patient’s condition; and
2. It must be reasonable and necessary to furnish the care on an inpatient hospital basis, rather than in a less intensive facility such as a SNF, or on an outpatient basis.

Reasonable and Necessary Determinations

Determinations of whether inpatient rehabilitation hospital stays are reasonable and necessary are based on an assessment of each Medicare beneficiary’s individual care needs using the information available in the patient’s medical record.

Section 1862 (a)(1)(a) of the Social Security Act states, “Notwithstanding any other provision of this title, no payment may be made under Part A or Part B for any expenses incurred for items or services which…are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

Preadmission Screening

Preadmission screening is generally done before a patient is admitted for treatment in an inpatient rehabilitation hospital program.  The screening is a preliminary review of the patient’s condition and previous medical record(s) to determine if the patient is likely to benefit significantly from an intensive inpatient rehabilitation hospital program.  However, preadmission screening cannot be expected to eliminate all unsuitable candidates for inpatient rehabilitation services.

Admission Orders

At the time of admission, the IRF must have physician orders for the patient’s care during the time the patient is hospitalized.

Inpatient Assessment of Individual’s Status and Potential for Rehabilitation

Upon admission to and discharge from an IRF, Medicare beneficiaries must be assessed by a clinician using the CMS mandated patient assessment instrument, the IRF-PAI.  The assessment instrument consists of 9 sections, with different categories of patient information including identification, demographics, medical information, quality of care, and basic patient safety issues.  IRFs must computerize and electronically report the patient assessment data.

The admission assessment must have an assessment reference date of the 3^rd day of the IRF stay, be based upon observations done in the first 3 days of the IRF stay and be completed by the 4^th day of the IRF stay.

Coverage is available, for an inpatient assessment of a patient’s potential to benefit from an intensive coordinated rehabilitation program, only if it is reasonable and necessary to perform the assessment in the hospital.  The assessment process is an onsite professional review of the patient’s condition by the necessary disciplines.  Rather than simple screening assessments, inpatient assessments conducted by the rehabilitation team usually require between 3 and 10 calendar days while the patient is receiving therapies.  When the initial assessment results in a conclusion that the patient is a poor candidate for rehabilitation care, coverage for further inpatient hospital care is limited to a reasonable number of days needed to permit appropriate placement of the patient.

The discharge assessment must have an assessment reference date that is either the actual day the patient is discharged from the IRF; the day on which the patient dies; or when Part A benefits exhaust.  The discharge assessment is used to record co-morbidities that developed during the patient’s stay.  Clinical staff must observe the patient during the stay to record motor and cognitive data on the discharge PAI.  This assessment is based on observations done in the 3 calendar days prior to and including the assessment reference date; and completed by the 5^th calendar day that follows the discharge assessment reference date (with the reference date itself being counted as day 1 of the 5 calendar day period).

An interrupted stay is defined as one in which an IRF patient is discharged from the IRF and returns to the same IRF within 3 consecutive calendar days that begin with the day of discharge and end on midnight of the 3^rd day.  If the interruption is less than 3 calendar days, the IRF does not need to complete a new admission assessment.  However, if the patient is discharged and returns after 3 consecutive calendar days, the IRF is required to complete a new admission assessment.

Rehabilitation Hospital Care Screening Criteria

Rehabilitative care in a hospital, rather than in a SNF or on an outpatient basis, is reasonable and necessary for a patient who requires a more coordinated, intensive program of multiple services than is generally found out of a hospital.  A patient probably requires a hospital level of care if they have either one or more conditions requiring intensive and multidisciplinary rehabilitation care, or a medical complication in addition to their primary condition, so that the continuing availability of a physician is requires to insure safe and effective treatment.

1. Close Medical Supervision by a Physician with Specialized Training or Experience in Rehabilitation
   
   A patient’s condition must require the 24 hour availability of a physician with special training or experience in the field of rehabilitation.  The medical record should reflect frequent, direct, and medically necessary physician involvement in the patient’s care, i.e., at least every 2 to 3 days during the patient’s stay.
   
   
2. 24 Hour Rehabilitation Nursing
   
   Twenty-four hour availability of a registered nurse with specialized training or experience in rehabilitation is required by the patient.
   
   
3. Relatively Intense Level of Rehabilitation Services
   
   The general threshold of establishing the need for IRF services, is that the patient must require and receive at least 3 hours a day of physical and/or occupational therapy.  In some cases, the 3 hour a day requirement can be met by a combination of therapeutic services instead of, or in addition to, physical therapy and/or occupational therapy.  Furnishing services no less than 5 days a week satisfies the requirement for “daily” services.
   
   
4. Multidisciplinary Team Approach to Delivery of Program
   
   A multidisciplinary team usually includes a physician rehabilitation nurse, social worker, and/or psychologist, and those therapists involved in the patient’s care.  At a minimum, a team must include a physician, rehabilitation nurse, and one therapist.
   
   
5. Coordinated Program of Care
   
   The patient’s records must contain documentation that periodic team conferences are held in at least every 2 weeks to:
   
   
   • Assess the individual’s progress or the problems impeding progress
   • Consider possible resolutions to such problems
   • Reassess the validity of the rehabilitation goals initially established
     

A team conference may be formal or informal.  The decision made during such conferences, and any changes to the care plan and/or treatment goals must be recorded in the clinical record.

6. Significant Practical Improvement
   
   Hospitalization is covered only in those cases where a significant, practical, improvement can be expected in a reasonable period of time.  The expectation of improvement must be of practical value to the patient, measured against the patient’s condition at the start of the rehabilitation program.
   
   
7. Realistic Goals
   
   The most realistic rehabilitation goal for most Medicare beneficiaries is self-care or independence in the activities of daily living, or sufficient improvement to allow the individual to live at home with assistance, rather than in an institution.  The aim of treatment is to achieve the maximum level of function possible.

Length of Rehabilitation Program

The length of a rehabilitation program is based on the degree of improvement that has occurred and the type of program required to achieve further improvement.  Coverage stops when further progress toward the established rehabilitation goal is unlikely, or when further progress can be achieved in a less intensive setting.

When discharge or transfer to another facility is appropriate, the cut-off point for coverage is not the last day on which improvement actually occurs.  Rather, coverage continues through the time it would be reasonable for the physician, in convert with the rehabilitation team, to conclude that further improvement would not occur and to initiate the patient’s discharge.  That is why discharge planning is an integral part of any rehabilitation program and should begin upon the patient’s admission to the IRF.

References

Social Security Act 1886 (j) defines the current IRF-PPA

Social Security Act 1862 (a)(1)(a) prohibits payment for services that are not medically reasonable and necessary.

42 CFR Part 412.604, Conditions of Payment under the prospective payment system for inpatient rehabilitation facilities.

Pub 100-2, Medicare Benefit Policy Manual, Chapter 1, Section 110, Inpatient Hospital Stays for Rehabilitation Care

Pub 100-8, Medicare Program Integrity Manual, Chapter 1, Section 1.2, Types of Claims for which Contractors are Responsible

You can contact Highmark Medicare Services for additional information at the following site:  http://www.highmarkmedicareservices.com/contact/index.html