RACs Plan to Spotlight IRFs

CMS has announced that their contracted Recovery Audit Contractors will focus their attention on Inpatient Rehabilitation Facilities (IRFs) in 2012 to determine if IRFs are submitting data compliantly.

Section 1886(j)(2)(D) of the Social Security Act requires Inpatient Rehabilitation Facilities to transmit sufficient patient data to allow the program to administer the IRF prospective payment system. In order to do so, CMS requires IRFs to electronically submit the patient assessment instrument for each IRF stay to CMS’s National Assessment Collection Database no more than 27 calendar days from the beneficiary’s discharge date. If the assessment is not submitted within this timeframe, the IRF’s payment rate is reduced by 25 percent.

In a report dated June 9, 2010, the Inspector General of the Department of Health and Human Services informed the Centers for Medicare & Medicaid Services that of their sample of 200 claims, 113 claims with patient assessment instruments were transmitted after the 27 day deadline. However, the payments were not adjusted to reflect the 25 percent penalty. Based on these sample results, it is estimated that fiscal intermediaries made a total of $20.2 million in overpayments to IRFs during calendar years 2006-2007.

Based on this report, CMS has reported their contracted Recovery Audit Contractors (RAC) plan to turn their attention to IRFs in 2012. The focus of the auditors will be to determine whether IRFs are submitting the data compliantly. All claims within the audit window found to be noncompliant will be subject to the recoupment of the 25 percent reduction.

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