Noridian Healthcare Solutions, LLC, (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare and Medicaid (CMS), has conducted post-payment review of claims for Medicare Part A billed on dates of service from January 1, 2023, through December 31, 2023. Below are the review results:

Background

Inpatient rehabilitation hospitals and rehabilitation units of acute-care hospitals, collectively known as Inpatient Rehabilitation Facilities (IRFs), provide intensive rehabilitation therapy in a resource-intensive, inpatient hospital environment. These are for patients who, because of the complexity of their nursing, medical management, and rehabilitation needs, require and can be expected to benefit from an inpatient stay and an interdisciplinary team approach to the delivery of rehabilitation care.

Over the years, the IRF benefit has been reviewed by the Office of the Inspector General (OIG). It continues to be a part of the work done by the OIG. In a 2018 OIG report, titled “Many Inpatient Rehabilitation Facility Stays Did Not Meet Medicare Coverage and Documentation Requirements” (A-01-15-00500), the OIG found that for many IRFs, medical record documentation did not support that IRF care was reasonable and necessary in accordance with Medicare’s requirements.

Comprehensive Error Rate Testing (CERT) data from 2023 reflects a projected improper payment amount for IRF services of $1.9 billion, resulting in an improper payment rate of 27.3 percent. The Supplemental Medical Review Contractor (SMRC) completed prior IRF medical review projects between 2015 and 2022. Findings supported additional review and education on the IRF benefit was indicated.

Reason for Review

The SMRC was tasked to perform data analysis and conduct medical record reviews on claims billed with Type of Bill (TOB) 11X, with Revenue (REV) Code 0024 billed with date of service January 1, 2023, through December 31, 2023.

The SMRC conducted medical record reviews in accordance with statutory, regulatory, and sub-regulatory guidance

Common Reasons for Denial

• Supervision by the Rehabilitation Physician
  • The documentation does not support the beneficiary required supervision by a rehabilitation physician. Refer to 42 CFR 412.622(a)(3)(iv), Medicare Benefit Policy Manual Chapter 1, Section 110.2. This was appended when the documentation of IRF physician supervision was incomplete or invalid.For example,, the required face-to-face progress notes lacked updates to the patient’s medical or functional status at least three days per week throughout the IRF stay.
• Non-Response to the Additional Documentation Request (ADR)
  • No medical record documentation was received. Refer to Internet-only Manual Pub 100-08, Chapter 3, Section 3.2.3.8, 42 CFR 424.5(a)(6) and Social Security Act Title XVIII, Section 1815(a), 1833(e), and 1862(a)(1)(A). This requires providers to respond to requests for documentation within 45 calendar days of the additional documentation request. No documentation was received in response to the ADR letter to support reasonable and necessary criteria for the IRF stay.
• Missing Preadmission Screening (PAS)
  • The documentation does not include a preadmission screening. Refer to 42 CFR 412.622(a)(4)(i)(B), Medicare Benefit Policy Manual Chapter 1, Section 110.1.1. In these instances, the preadmission screening was not submitted for review.

References

Social Security Act (SSA), Title XI

• §1135 Authority to Waive Requirements During National Emergencies

Social Security Act (SSA), Title XVIII

• §1814(a)(2)(B) Conditions of and Limitations on Payment for Services
• §1815(a) Payment to Providers of Services
• §1833(e) Payment of Benefits
• §1834(m)(4) (F) Special Payment Rules for Particular Items and Services
• §1862(a)(1)(A) Exclusion from Coverage and Medicare as a Secondary Payer
• §1879(a)(1) Limitation on Liability of Beneficiary where Medicare Claims are Disallowed.
• §1886(j) Prospective Payment for Inpatient Rehabilitation Services

42 Code of Federal Regulations (CFR)

• §400.200 General Definitions
• §411.15(k)(1) Particular Services Excluded from Coverage
• §412.29 Classification Criteria for Payment Under the Inpatient Rehabilitation Facility Prospective Payment System
• §412 Subpart A Prospective Payment Systems for Inpatient Hospital Services. General Provisions
• §412 Subpart P Prospective Payment for Inpatient Rehabilitation Hospitals and Rehabilitation Units
• §424.5(a)(6) Basic Conditions

Public Law

• Robert T. Stafford Disaster Relief and Emergency Assistance Act, Pub. L. No. 100-707, 102 Stat. 4689 (1988), Codified as Amended 42. U.S.C. § 5121. Disaster Relief and Emergency Assistance Amendments. May 2021. Retrieved from Stafford Act, as Amended – FEMA P-592 vol. 1 May 2021

Federal Register

• Final Rule Volume 87, No. 146. Medicare Program; Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2022. August 1, 2022. Retrieved from https://www.govinfo.gov/content/pkg/FR-2022-08-01/pdf/2022-16225.pdf

Internet-Only Manual (IOM), Medicare Benefit Policy Manual (MBPM), Publication (Pub.) 100-02

• Chapter (Ch) 1, §110 Inpatient Rehabilitation Facility (IRF) Services

IOM, Medicare Claims Processing Manual (MCPM), Pub. 100-04

• Ch. 3, §140.3 Billing Requirements Under IRF PPS

IOM, Medicare Program Integrity Manual (MPIM), Pub. 100-08

• Ch. 3, §3.2.3.8 No Response or Insufficient Response to Additional Documentation Requests
• Ch. 3, §3.3.2.1 Documents on which to Base a Determination
• Ch. 3, §3.3.2.4 Signature Requirements
• Ch. 3, §3.6.2.2 Reasonable and Necessary Criteria

Other

• Comprehensive Error Rate Testing (CERT). 2023 Medicare Fee-for Service Supplemental Improper Payment Data. December 7, 2023. Retrieved from 2023 Medicare Fee-for-Service Supplemental Improper Payment Data | CMS
• Office of Inspector General (OIG), Report A-01-15-00500. Many Inpatient Rehabilitation Facility Stays Did Not Meet Medicare Coverage and Documentation Requirements. September 2018

Last Updated Dec 23, 2025