AHA Asks CMS to Retract Plans for Inpatient Rehab Facilities Review

The American Hospital Association (AHA) has asked CMS to withdraw the proposed review choice demonstration (RCD) that would implement program integrity audits at inpatient rehabilitation facilities (IRFs) in Alabama, California, Pennsylvania, and Texas.

The demonstration’s purpose is to improve methods of identifying potential Medicare fraud by assessing IRF admission claims for coverage compliance and documentation requirements, according to AHA’s letter.

If the agency will not retract the proposed demonstration, the organization urged CMS to rethink the timing and design and make necessary changes before it goes into effect in 2022.

AHA raised several concerns with the proposed demonstration, including the fact that it would happen during a public health emergency.

The demonstration notice did not address any of the challenges that IRFs are currently facing due to the COVID-19 pandemic. Like many other healthcare facilities, IRFs have seen an influx of patients that have or are recovering from COVID-19. Additionally, patients with long-term effects and complex recoveries often required specialized care.

Many IRFs helped house patients when surrounding hospitals reached their capacity during surges, thanks to a public health emergency waiver. As the pandemic continues, IRFs still face staff shortages, supply shortages, and case-mix shifts, the letter stated.

CMS should not enact a review choice demonstration while IRFs are still dealing with the demands of the pandemic, AHA said.

AHA cited the history of inadequate OIG, RAC, and CERT auditors as another reason the demonstration should not take place. Past audits have used nurse auditors to review claims and many of these audits were consistently inaccurate, AHA indicated.

CMS plans to continue using nurse auditors—many who do not know IRF policy—for the IRF demonstration, which AHA said will likely lead to high error rates and unreliable results. The organization argued that assessing a patient’s eligibility for an IRF admission requires a physician that has experience in medical rehabilitation.

“If CMS does proceed with this demonstration, it should require every potential IRF auditor to demonstrate that they possess comprehensive knowledge of relevant IRF coverage and other key policies in the statute, as well as Medicare regulations and sub-regulatory guidance,” AHA wrote.

AHA also urged CMS to require rehab physicians with relevant credentials to oversee the IRF auditors during the process.

In addition to the inadequate auditors, AHA referenced the history of inaccurate IRF audits. The organization presented several past OIG, CERT, and RAC audits that displayed incorrect practices, yielded incomplete or incorrect results, and extrapolated findings.

For example, an OIG report in September 2018 stated that four out of five IRF stays were not medically necessary or did not have appropriate documentation. AHA found that there was an 84 percent error rate among the 220 cases that OIG reviewed, and OIG extrapolated the results to every Medicare IRF payment in 2013.

AHA stated that if CMS moves forward with the RCD, then it would add to this history of inaccuracies.

The organization raised an issue with the proposed RCD approach, as well. The demonstration would increase administrative burden on IRFs, which is unjustified given the current pandemic, AHA stressed.

IRFs that do not have a history of noncompliance would have to redirect staff and resources to prepare claims for review instead of focusing on patient care. This would hurt patients and providers alike, according to AHA.

If CMS continues with the demonstration, AHA urged the agency to only audit IRFs that have a history of noncompliance. The organization asked CMS to require auditors to review and approve claims faster than the proposed five-day review period, as well, citing that the long process may increase costs and provider burden.  

AHA also requested that CMS differentiate between fraud and improper payments if the demonstration takes place, as the two are frequently conflated.

Lastly, AHA cited the Medicare appeals backlog as a reason for CMS to withdraw the proposed IRF demonstration. HHS is working to clear the appeals backlog by FY 2022, as a result of a lawsuit from AHA.

The Association stated that the IRF demonstration would only add to the appeals backlog and draw out the process of clearing it.