BP - Health Care Compliance Association

RAC demonstrations and inpatient rehabilitation – Vision of things to come? ...continued from page 21
The impact on inpatient rehabilitation
The RAC demonstration project resulted in the
identification of approximately $1.03 billion in
improper payments (actual figures vary slightly,
based on source). Of that amount, $59.7 million
or 6% of the total was identified from inpatient
rehabilitation providers. (These figures represent
the dollar amounts without adjustment for
successful appeal processes.) The efforts focusing
on inpatient rehabilitation providers did not take
place in all three RAC demonstration states, but
only in California. The most recent evaluation
of the demonstration project reports: “The RAC
demonstration had a limited financial impact
on most providers,” however this was clearly not
the case for the inpatient rehabilitation providers
in California. Moreover, even an informal
extrapolation to all of the 50 states will provide
the reader with the potential impact of these
denials on a larger scale.
The following table depicts the circumstances,
or noted errors that resulted in the improper
payments.
Table 1: Overpayments Collected by Error
and Provider Type 2
Error Type
Percent of Total
Medically Unnecessary 5.63
Incorrectly Coded 0.00
No/Insufficient Documentation
0.44
Other 0.00
Total 6.07
When considering the error type, it is clear
that the comprehensiveness and accuracy of
the documentation of the patient’s stay in an
inpatient rehabilitation program is a key factor
in the denial process; that is, the ability of the
medical record to “tell the story” and demonstrate,
without a doubt, that the patient required
an admission to an inpatient rehabilitation program
to care for their medical and rehabilitation
needs, and that the diagnoses identified were
treated during the hospital stay.
Medical necessity – What does that mean?
There is no standardized definition or interpretation
of ‘medical necessity,’ which leads to
confusion as to the necessary content of medical
record documentation and what to review
as part of a proactive audit. It is important to
keep in mind that inpatient rehabilitation beds
are licensed as acute care beds and certified
by Medicare as inpatient rehabilitation beds.
Therefore, it is important to document that the
patients have a medical condition(s) that, in
conjunction with their needs for an intensive,
inpatient rehabilitation program, require
admission to a licensed acute care bed that has
been certified by Medicare as a ‘rehabilitation
bed.’ If a patient does not exhibit the medical
need or does not need, cannot tolerate therapy,
or could make as much progress from another
level of care, then it is the perception of the
RAC that the patient could be admitted to
another level of care and medical necessity for
inpatient rehabilitation is not demonstrated.
When describing medical necessity for
inpatient rehabilitation, all sources refer
to the Medicare Beneficiary Manual, 3
Chapter 1, Section 110: Inpatient Stays for
Rehabilitation Care, and the Code of Federal
Regulations. 4 In the Medicare Beneficiary
Manual, the following caveats are provided:
n “The services must be reasonable and
necessary (in terms of efficacy, duration,
frequency and amount) for the treatment
of the patient’s condition; and
n 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, on an outpatient basis.”
In order for the admission to be medically
necessary, patients admitted to an exempt
inpatient rehabilitation program must require
and receive care as described in Medicare
Beneficiary Manual, Chapter 1, Section
110. There are several components in the
chapter that note: if a particular component
in isolation was not provided, that, in and
of itself, would not be justification of denying
payment. However, although the RAC
identification of improper payment for
“medical necessity” did not identify specific
components of the referenced chapter as not
having been demonstrated, it stands to reason
that when documentation does not support
several of the components, medical necessity
may be questioned. The specific components
identified in this document are:
1. Preadmission screening
2. Admission orders
3. Inpatient assessment of individual’s status
and potential for rehabilitation
In addition to these issues, there are basic
Hospital Screening Criteria as identified in
the Code of Federal Regulations, Section 42:
1. Close medical supervision by a physician
with specialized training or experience in
rehabilitation;
2. Rehabilitation nursing;
3. Relatively intense level of rehabilitation
services;
4. Multi-disciplinary team approach to
delivery of program;
5. Coordinated program of care;
6. Realistic goals; and
7. Significant practical improvement.
What is interesting to note is that although
most inpatient rehabilitation providers are
knowledgeable about these conditions, they
have not internalized them into practice
within their delivery of care. Therefore, the
documentation of the patient’s care is unlikely
to focus on the issues to demonstrate the
medical necessity as described in the Manual
chapter. It is this situation that places an inpatient
rehabilitation provider at risk under the
March 2009
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