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Inpatient Rehabilitation Facility Nationwide Audit

Inpatient rehabilitation facilities (IRFs) provide intensive inpatient rehabilitation therapy for patients who have complex nursing, medical management, and rehabilitation needs that require hospital-level treatment in an inpatient environment. In fiscal year 2021, Medicare paid approximately $8.7 billion for 373,000 IRF stays nationwide. The Centers for Medicare & Medicaid Services (CMS) has consistently found high IRF error rates through its Comprehensive Error Rate Testing program. For an IRF claim to be considered reasonable and necessary, it must meet certain coverage and documentation requirements. We issued a nationwide audit of IRF claims in September 2018, Many Inpatient Rehabilitation Facility Stays Did Not Meet Medicare Coverage and Documentation Requirements (A-01-15-00500), that found that medical record documentation for 175 of 220 sampled IRF stays did not support that the IRF care was reasonable and necessary in accordance with Medicare requirements. Our Hospital Compliance audits also frequently include IRF claims and have similarly found high error rates. In response to these findings, IRF stakeholders have stated that Medicare audit contractors and OIG have misconstrued the IRF coverage regulations. To better understand which claims IRFs believe are properly payable by Medicare, OIG needs more information from the IRF stakeholders. We plan to determine whether there are areas in which CMS can clarify Medicare IRF claims payment criteria. In addition, we will follow up on recommendations from our prior IRF audit, A-01-15-00500. We believe data and input from IRF stakeholders are critical to identifying any specific areas that might require clarification and will result in more meaningful recommendations and a greater positive impact on the program. This audit will be an independent performance audit in accordance with Generally Accepted Government Auditing Standards.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
Revised Centers for Medicare and Medicaid Services Inpatient Rehabilitation Facility Nationwide Audit Office of Audit Services WA-22-0014 (W-00-22-35891) 2024