RACs Expected to Target IRFs in 2012

The Centers for Medicare & Medicaid services (CMS) has reported to the AHA that their contracted Recovery Audit Contractors (RAC) plan to begin auditing whether inpatient rehabilitation facilities (IRF) are submitting key data in compliance with Medicare deadlines. This new RAC focus is likely based on a June 2010 report by the Department of Health and Human Services Office of the Inspector General (OIG) that found that IRFs were frequently submitting patient assessment data used to assign beneficiaries to a payment unit after the Medicare deadline. IRFs are required to submit patient assessment data, collected through the IRF-Patient Assessment Instrument (IRF-PAI), to the National Assessment Collection Database within 27 days of patient discharge or face a 25 percent payment reduction. The OIG audited 200 IRF claims from 2006 and 2007 and found that 57 percent of IRF claims were submitted after the deadline, but did not receive the associated payment reduction. The Appendix of the OIG report notes that CMS was targeting July 2011 for implementation of a system change to implement the 25 percent reduction on a prepayment basis. However, the system change is still being tested by CMS and has not yet been implemented.