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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Nationwide Review of Inpatient Rehabilitation Facilities' Compliance With Medicare's Transfer Regulation," (A-04-04-00008)

September 11, 2006

PDF File Complete Text of Report is available in PDF format (509 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objective was to determine whether inpatient rehabilitation facilities (IRFs) coded claims as “discharged to home” in compliance with Medicare’s transfer regulation during fiscal year (FY) 2003. IRFs did not always code claims in compliance with Medicare’s transfer regulation. Nationwide we identified 2,473 IRF claims coded and paid as discharges to home that potentially should have been paid as transfers. We visited or contacted seven IRFs that were responsible for 112 of these claims and found that all 112 claims should have been coded as transfers rather than as discharges. 

We recommended that CMS: (1) instruct the fiscal intermediaries to review the claims in question and to recover, as appropriate, the estimated $11,967,555 in potential overpayments, (2) instruct the fiscal intermediaries to review claims paid after our audit period for possible coding errors like those found in this review, and (3) implement edits in the Common Working File that match beneficiary discharge dates with admission dates to other providers to identify potentially miscoded claims. CMS concurred with the recommendations and requested that we furnish the necessary data to initiate recovery of the overpayments. We have provided CMS with the requested data.