IRF Classification Requirements
| Related Change Request (CR) #: | 3334 |
| Related CR Release Date: | June 25, 2004 |
| Related CR Transmittal #: | 221 |
| Effective Date: | July 1, 2004 |
| Implementation Dates: | July 1, 2004 |
| MLN Matters Number: | MM3334 |
Background
Sections 1886(d)(1)(B)(ii) of the Social Security Act provide authority for defining which inpatient facilities may be classified as inpatient rehabilitation hospitals and as acute care hospital rehabilitation units. An inpatient rehabilitation hospital and an acute care rehabilitation unit are collectively referred to as an inpatient rehabilitation facility (IRF) under the IRF prospective payment system (PPS).
The regulations at 42 CFR 412.25, 412.29, and 412.30 refer to 42 CFR 412.23(b)(2) as one of the criteria a provider must meet to be classified as an IRF. Hospitals and units that met the criterion specified in 42 CFR 412.23(b)(2), as well as other criteria, were eligible to be paid under the IRF PPS.
An IRF that has already been excluded from the acute care hospital PPS is always subject to verification that it continues to meet the criteria necessary to allow the facility to be excluded from the acute care hospital PPS. The results of the verification procedure are used in determining each facility's classification status at the beginning for the next cost reporting period.
An IRF that has already been excluded from the acute care hospital PPS need not reapply to be classified as an IRF. However, on an annual basis, an IRF must self-attest (except for the medical condition criterion specified above and certain other criteria) that it still meets all the criteria for being classified as an IRF. The FI is always required to verify that a facility has met the medical condition criterion.
Changes to the Classification Criteria
On December 29, 2007, Section 115 of the Medicare, Medicaid, and State Children's Health Insurance Program (SCHIP) Extension Act of 2007 amended Section 2005 of the Deficit Reduction Act of 2005 to revise the following elements of the 75 percent rule that are used to classify IRFs:
Percentages
- The compliance percentage that IRFs must meet to be excluded from the acute care inpatient hospital prospective payment system (PPS) and to be paid under the IRF PPS will be set permanently at 60 percent for cost reporting periods beginning on or after July 1, 2005.
- This statutory change effectively eliminates the increase to 65 percent that had already taken effect for cost reporting periods beginning on or after July 1, 2007, and also eliminates the increase to 75 percent that was scheduled to take effect for cost reporting periods beginning on or after July 1, 2008. All IRF cost reporting periods (or portions of cost reporting periods) beginning on or after July 1, 2005, will be evaluated using the 60 percent threshold.
- Patient comorbidities that satisfy the criteria specified in 42 Code of Federal Regulations (CFR) §412.23(b)(2)(i) will be permanently included in the calculations used to determine whether an IRF meets the 60 percent compliance percentage.
To minimize the level of effort required from Medicare contractors and IRFs, contractors may now combine the two portions of cost reporting periods that are both reviewed at the 60 percent level into one continuous 12-month review period.
For example, an IRF's compliance review period for the cost reporting period beginning May 1, 2008, was divided into two periods: one from January 1, 2007, through April 30, 2007, and a separate review period from May 1, 2007, through December 31, 2007. Since both of these review periods will now be evaluated at the 60 percent compliance threshold, contractors may now instead draw one combined random sample of the IRF's cases from the 12-month period as a whole (from January 1, 2007, through December 31, 2007) to determine the facility's compliance with the 60 percent threshold.
List of Medical Conditions
The list of medical conditions is shown in the table below:
| Medical Condition | Additional comments relating to the Medical Condition | |
1. |
Stroke |
|
2. |
Spinal Cord Injury |
|
3. |
Congenital Deformity |
|
4. |
Amputation |
|
5. |
Major Multiple Trauma |
|
6. |
Femur Fracture |
|
7. |
Brain Injury |
|
8. |
Neurological Disorders |
Includes Multiple Sclerosis, motor neuron disease, polyneuropathy, muscular dystrophy and Parkinsons |
9. |
Burns |
|
10. |
Active polyarticular rheumatoid arthritis, psoriatic arthritis and seronegative arthropathies. |
The noted conditions must result in significant functional impairment of ambulation and other activities of daily living that:
The related CR 3334 provides guidance regarding therapy. However, the medical review staff of the FI has the discretion to define:
|
11. |
Systemic vasculidities with joint inflammation |
The noted condition must result in significant functional impairment of ambulation and other activities of daily living that:
The related CR 3334 provides guidance regarding therapy. However, the medical review staff of the FI has the discretion to define:
|
12. |
Severe or advanced osteoarthritis (osteoarthritis ordegenerative joint disease) involving two or more major weight bearing joints (elbow, shoulders, hips or knees, but not counting a joint with a prosthesis) with joint deformity and substantial loss of range of motion, atrophy of muscles surrounding the joint. |
The noted condition must result in significant functional impairment of ambulation and other activities of daily living that:
The related CR 3334 provides guidance regarding therapy. However, the medical review staff of the FI has the discretion to define:
Please note, a joint replaced by a prosthesis is no longer considered to have osteoarthritis, or other arthritis, even though this condition was the reason for the joint replacement. |
13. |
Knee or hip joint replacement or both, during an acute hospitalization immediately preceding the inpatient rehabilitation stay. |
This condition must also meet one or more of the following specific criteria; the patient:
|
Written Certification
A hospital that seeks classification as an IRF for a cost reporting period that occurs after it becomes a Medicare-participating hospital must provide a written certification that the inpatient population that it intends to serve meets the medical condition requirement specified above, instead of showing that it has treated an inpatient population that met the medical condition requirement during its most recent cost reporting period.
The written certification is also effective for a cost reporting period of not less than one month and not more than 11 months occurring between the dates the hospital began participating in Medicare and the start of the hospital's regular 12-month cost reporting period.
If a hospital, hospital unit, or group of beds is paid under the IRF PPS for a cost reporting period based on a written certification that it will meet the medical condition requirement specified above but does not actually meet the requirement for that cost reporting period, CMS adjusts its payments to the hospital retroactively.
The FI effectuates this payment adjustment to the hospital by calculating the difference between:
The amount actually paid for services to Medicare patients in the hospital, hospital unit, or beds during the period of provisional exclusion; and
The amount that would have been paid if the hospital, unit or beds had not been excluded from the acute care PPS.
The FI then takes action to recover the resulting overpayment or corrects the underpayment to the hospital.
Additional Information
The official instruction issued to the intermediary regarding this change may be found by going to http://www.cms.hhs.gov/Transmittals/01_overview.asp 
.
If you have any questions regarding this newsletter, please contact the Enrollment Supervisor at 1.866.734.9444 x2178.
You can find this information in our August 15, 2004 Medicare Newsletter.
Page Last Updated: Friday, 20-Jun-2008 09:59:39 CDT
