Published on:

The OIG’s Report on Inpatient Rehabilitation Facility Claims Could Lead to RAC Reviews

The Office of Inspector General of the U.S. Department of Health and Human Services (OIG) released a report of its review of inpatient rehabilitation facilities’ transmission of patient assessment instruments for 2006 and 2007. Inpatient rehabilitation facilities (IRFs) are required to submit patient assessment instruments for each stay to the Centers for Medicare and Medicaid Services (CMS) National Assessment Collection Database. In 2001, CMS released guidance that required the assessments to be submitted by the 17th calendar day from the date of the beneficiary’s discharge. If the submission date is 10 calendar days late, the payment rate for the applicable case mix group should be reduced by 25 percent.

In its report released in June, the OIG reviewed calendar years 2006 and 2007 to determine if Medicare contractors were reducing case mix patient claims by 25 percent as required by the 2001 CMS rule. The CMS audit evaluated 10,338 claims, totaling $166 million in claims, for which the patient assessment instrument was submitted after 27-day deadline. Out of the over 10,000 claims, the study focused on 192 claims. The OIG report showed that in 113 of the 192 cases, the IRFs did not receive reduced payments despite the transmission of the patient assessment data past the 27-day deadline. CMS estimated that these payment errors totaled approximately $20.2 million overpayments to IRFs in 2006 and 2007.

The OIG determined that the overpayments were the result of inadequate internal controls at IRFs to ensure that the transmission date reported on the claim matched the actual date the IRF transmitted the instrument to the database. In addition, the OIG found that Medicare did not have “prepayment controls” to compare the actual dates of the patient assessment data submission with the date on the claim submitted to the fiscal intermediary.

As a result of the OIG report, CMS has decided to immediately reopen 10,138 non-sampled claims and recover any overpayments. In addition, CMS has indicated that it will explore whether Recovery Audit Contractors should review these types of IRF claims to recover any overpayments.

If you need assistance with a RAC or third party payor audit or for more information, please visit or contact a Wachler & Associates attorney at 248-544-0888.

Contact Information