Comment Response Document

IRF RCD 60-day Comments and Responses (508).pdf

Pre-Claim Review Demonstration for Inpatient Rehabilitation Facility Services (CMS-10765)

Comment Response Document

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Appendix 1 – Response to 60-day comments
CMS Responses to Public Comments Received for CMS-10765: Review Choice Demonstration
(RCD) for Inpatient Rehabilitation Facility (IRF) Services. CMS received 35 total comments. A
summary of our comments and responses is below.
Many commenters expressed concern about starting a demonstration during the COVID19 public health emergency (PHE). Commenters stated that the timing and magnitude of
the RCD will jeopardize public health goals and will contradict the intent of PHE waivers.
The commenters stated that operational activities and resources, as well as patient care
services, would be diverted to the demonstration, and it would be burdensome to
participate in the demonstration due to the new challenges presented by “long-COVID-19”
survivors. One commenter stated that announcing the RCD is inconsistent with other
health care programs containing new pre-authorization requirements within CMS that
would not apply until 2024. Several commenters stated that at least two years should be
given after the PHE to start a demonstration of this nature.
Response:
The CMS is very concerned with the obvious effects of the Coronavirus Disease 2019 (COVID19) Public Health Emergency (PHE) on the healthcare community’s ability to deliver care that is
immediate and targeted to the specific medical needs of our beneficiaries. During the COVID-19
PHE, CMS has issued several waivers to decrease administrative burden and to provide
flexibility for Inpatient Rehabilitation Facilities (IRF) services to efficiently treat patients.
Reviews under the demonstration will take into account any applicable waivers in effect on the
date of service. For further information, please access the current waiver list covid-19emergency-declaration-waivers.pdf.
CMS is confident that the IRF demonstration will not impede beneficiary access to care or
prohibit providers from delivering services. In addition, CMS has not announced a start date for
the IRF RCD. We will continue to monitor the status of the PHE for potential impact on
proposed dates.
When the IRF RCD begins, providers do not need to wait to begin services and have options to
choose from that to best align with their business model. Once an IRF reaches a pre-claim review
affirmation or postpayment review approval rate of 90% or greater after 6 months, they will have
additional options. IRFs who show compliance with Medicare rules and meet the threshold can
choose to opt-out of reviews, except for a spot check of a small percentage of their claims.
Many commenters stated concerns that the demonstration will increase both
administrative and financial burdens. Commenters stated that the demonstration would
add an increased paperwork burden on IRFs, taking the focus away from quality measures
and enhancing outcomes for patients. Several commenters stated that many smaller and

rural providers would be unable to sustain the financial uncertainty created by this
demonstration. Also, commenters stated that CMS fails to consider multiple factors in its
burden estimate, including the level of personnel needed for these requirements, the time
and expense needed to implement the new processes, tracking ongoing claim requests,
expected appeals, and adjustments hospitals will need to make due to the financial
implications of this demonstration.
Response:
In an effort to create a process that balances provider burden while continuing our fiduciary
responsibility to lower the IRF improper payment rate and prevent fraud, waste, and abuse, CMS
structured the demonstration to offer increased flexibility, provider choice, as well as additional
risk-based changes.
The pre-claim review option does not create any new documents or administrative requirements
and resources should not need to be diverted from patient care. Instead, it requires the currently
needed documents to be submitted earlier in the claim process. Ultimately, having an affirmed
pre-claim review decision will help the cash flow for the provider as an affirmative decision
shows that a claim likely meets Medicare’s coverage and payment rules. Absent evidence of
fraud or gaming, a provider can anticipate payment as long as other payment requirements are
met. IRFs have the flexibility and choice to participate in other options if they do not want to
participate in pre-claim review. Under the postpayment review option, the provider will follow
all of the standard procedures they currently do and submit the claim for payment. As the
provider would already have received payment for the claim, this would not cause a financial
hardship for the providers.
In addition, IRFs that reach a pre-claim review affirmation or postpayment review approval rate
of 90% or greater after 6 months, will have the additional option of a spt-check review of only
5% of claims, to ensure continued compliance. Providers that demonstrate continued compliance
with Medicare rules and regulations may remain in that option for the duration of the
demonstration if they choose.
CMS believes that the additional review options, along with the ability to opt-out of reviews
once a provider demonstrates compliance with Medicare rules will offer providers the flexibility
to choose a review option that will work for them based on their resources and financial needs,
no matter the size of their agency. In addition, providers who have not met the threshold will be
allowed to change options if they believe another option will work better for their resources.
Therefore, CMS does not believe the demonstration will adversely affect IRF business models or
cause decrease availability to Medicare beneficiaries.
The commenters stated concern that medical review contractors (MACs) are nurse
reviewers who lack training and the expertise to review IRF claims. Many commenters
stated that IRFs experience “medical necessity” claim denials from CMS contractors and
audit programs that result from misunderstandings or misapplications of Medicare’s
regulations governing IRF care by non-clinical reviewers. The commenters stated that
many of the denials are reversed on appeal before administrative law judges, especially

when the rehabilitation physician participates in the hearing and explains their decision to
admit and treat the patient. Commenters stated concern that the combination of reviewers
who are not licensed rehabilitation physicians contribute to incorrect review decisions
which incorrectly inflate the improper payment rate, as well as the high number of
overturned appeals that are considered in the report.
Response:
CMS requires the MACs to use Registered Nurses, therapists, or physicians to make coverage
determinations. Reviewers will follow the same review guidelines as they currently do, as no
new documentation will be required under the demonstration. The MACs are not substituting
their judgment for the physician’s, but ensuring that the documentation meets Medicare rules and
clearly demonstrates the physician’s reasons for ordering services. CMS requires a medical
review of beneficiary paperwork and records to verify medical necessity, compliance with
Medicare rules, and statutes medical reviewers must complete appropriate education
requirements and/or certification and these requirements will not change for the IRF
demonstration. CMS has published numerous educational materials to inform IRFs and Medicare
beneficiaries of the policies and documentation requirements for IRF services.
CMS will ensure there is continued oversight of all MAC activities under this demonstration.
The MAC reviewers will undergo training to ensure consistency prior to beginning the reviews.
Both the MAC and CMS will monitor the reviewers’ accuracy throughout the demonstration and
CMS staff will conduct reviews on a selection of requests/claims to ensure the MAC decisions
are accurate and consistent across reviewers. Additionally, these reviews will be subject to
accuracy reviews by the designated contractor.
CMS believes that the qualified reviewers for the IRF demonstration will provide the necessary
expertise to check records for accuracy and missing or incomplete information in the medical
record. If a pre-claim review request is non-affirmed due to a documentation issue, the MAC will
proactively reach out to the provider to discuss the issue and encourage the provider to resubmit
the request. CMS and the MACs will work together to ensure that errors are evaluated for further
action, as in education or the need to investigate for fraud and or waste.
Many commenters expressed concerns that the RCD would disrupt and create delays in
care or lack of access for Medicare beneficiaries. Commenters stated that delaying
hospital-level IRF care because of the process required by the RCD could have an
irreversible, negative effect on patients’ course of recovery. Other commenters stated that
providers choosing pre-claim review may experience denials or non-affirmation decisions
during the course of treatment, and may be forced to discharge patients, creating
disruptions in care due to review decisions which may be overturned on appeal.
Response:
CMS does not believe this demonstration will disrupt or create delays in care or lack of access
for Medicare beneficiaries. Pre-claim review will allow the beneficiary to begin receiving
services before an affirmative (i.e., approved) decision is received, unlike prior authorization,

which ensures that all relevant coverage, coding, and payment requirements are met before the
service is rendered to the beneficiary and before the claim is submitted for payment. An IRF may
begin providing inpatient rehabilitation therapy services prior to submitting the pre-claim review
request and may continue to do so while waiting for a decision. In that way, beneficiary access to
treatment will not be delayed. There is no requirement to discharge patients when a nonaffirmative decision is received, providers should resubmit any additional information the MAC
request. An IRF has an unlimited number of resubmissions for the pre-claim review request to
make any needed changes to receive a provisional affirmed decision, though IRF providers
should not be admitting patients who don’t meet Medicare requirements. In addition, the
postpayment review option does not impact care, as services have already been rendered.
Commenters stated that pre-claim review under the RCD is inconsistent with CMS
requirements for an individual care plan. The commenters noted that the individualized
plan of care is due within four days of a patient’s admission, and is required for all preclaim review submissions. Additionally, commenters are concerned about the 10-day
review timeframe for possible resubmissions of pre-claim review requests. If there is a nonaffirm decision, there is concern that the IRF stay will be completed before the IRF can
receive their decision on the resubmitted request, since the average IRF stay is 12 days.
Several commenters suggested that CMS revise the review period so that MACs are
required to respond on the same day of the IRF’s submission and have the capability to
respond 24 hours a day.
Response:
CMS structured the Review Choice Demonstration to offer increased flexibility, provider choice,
as well as additional risk-based changes. IRFs are offered a choice between a pre-claim review or
postpayment review to meet their individual facility needs. Ultimately, having an affirmed preclaim review decision will help the cash flow for the provider as an affirmative decision shows
that a claim likely meets Medicare’s coverage and payment rules. Claims for which there is an
associated provisional affirmative pre-claim review decision will be paid in full, so long as the
inpatient rehabilitation claim was billed and submitted correctly. Additionally, CMS has changed
the resubmission of pre-claim review request with a 5-day turnaround decision from the MACs.
IRFs have the flexibility and choice to participate in other options if they do not want to
participate in pre-claim review. Under the postpayment review option, the provider will follow
all of the standard procedures currently in place, and submit the claim for payment. As payment
have been received for the claim, this would not cause a financial hardship for the providers.
In addition, IRFs that reach a pre-claim review affirmation or postpayment review approval rate
of 90% or greater after 6 months, will have the additional option of a spot-check review of only
5% of claims, to ensure continued compliance. Providers that demonstrate continued compliance
with Medicare rules and regulations may remain in that option for the duration of the
demonstration if they choose.
Commenters stated that the CMS resource entitled “Review Choice Demonstration for
Inpatient Rehabilitation Facility Services” included a section on “Additional Required
Documentation” where documents are no longer required in the FY 2021 IRF PPS Final

Rule (85 Code of Federal Regulations 48424-48463 - Medicare Program; Inpatient
Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2021). The
commenters stated that the following was removed in the pre-admission screening:
expected frequency and duration of treatment, anticipated post-discharge treatments, and
other information relevant to the beneficiary's care needs. Commenters stated that the
post-admission physician evaluation was entirely removed. One commenter stated that if
the post-admission physician evaluation is provided, that the MAC accepts it to support the
claim, no matter what timeframe it is performed. Other commenters stated that face-toface visits have an allowance for use of non-physician practitioners to meet some of the
documentation requirements for the visits/encounters by rehabilitation physicians.
Response:
CMS thanks the commenters for bringing this to our attention and agrees that these required
documents will not be required as part of the demonstration. This demonstration will not create
new clinical documentation requirements; rather, it will only require submission of the same
information providers are currently required to maintain. This will help guarantee that all
relevant coverage and clinical documentation requirements are met.
Documentation requirements that have been removed in 85 FR 48424 are not required for the
demonstration; however, if a provider wants to submit these documents, they will be accepted
regardless of the timeframe in which they were completed. For example, the post-admission
physician evaluation that was previously required to be submitted within 24 hours of an
admission may be completed at any time. During the PHE, pursuant to authority granted under
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that broadens the waiver
authority under section 1135 of the Social Security Act, the Secretary has authorized additional
telehealth waivers. CMS recognizes that the Face-to-Face visits have an allowance of nonphysician practitioners to meet some of the documentation requirements for the visits/encounters
by rehabilitation physicians under 42 CFR § 412.622(a)(3), (4), and (5).
The commenters stated that CMS has “lack of authority” to implement the RCD under 42
U.S.C. § 1395b-1(a)(1)(J). Commenters stated that the provision explicitly requires fraud to
be the target and CMS is not alleging fraud in the information collection notice. Other
commenters stated that CMS should allocate its time and resources to target facilities with
evidence of fraudulent activities, rather than penalizing all IRFs. Commenters stated that
any IRFs in the RCD should be exempt from an audit by an auditing agency unless there is
a credible fraud investigation.
Response:
CMS disagrees that it lacks authority to implement this demonstration under 42 U.S.C. § 1395b1(a)(1)(J). Based on previous CMS experience, the Department of Health and Human Services’
(HHS) Office of Inspector General (OIG) reports, and Government Accountability Office (GAO)
reports, there is evidence of fraud and abuse in the Medicare IRF benefit. Additionally, a high
improper payment rate is seen for IRF services. This demonstration is not intended to change any
of the payment requirements or structures in Medicare or to test new value-based purchasing

options to improve and reduce costs. Rather this demonstration will test if implementing a
review choice for IRFs that includes pre-claim review, will improve the detection and
prosecution of fraud, while reducing improper payments. It is important to note that the
improper payment rate is not a measure of fraud. They are payments that did not meet statutory,
regulatory, administrative, or other legally applicable requirements, which may include
fraudulent occurrences. In 2019, The Medicare Payment Advisory Commission (MedPAC), a
nonpartisan, legislative branch agency that provides the U.S. Congress with Medicare program
analysis and policy advice, reported that IRFs’ marginal profit—a measure of providers’
financial incentive to expand the number of Medicare beneficiaries they serve—has risen
steadily since 2009. While high profit margins are not inherently indicative of fraud, it could
incentivize IRFs to increase inappropriate admissions. While CMS will monitor to ensure
appropriate beneficiary access to necessary care throughout the demonstration, the primary intent
of the demonstration design is not to improve quality under this Medicare benefit program.
Therefore, the most appropriate authority for this demonstration is Section 402(a)(1)(J).
CMS believes this demonstration will also allow the agency to better understand the scope and
causes of improper payments and work with IRFs to reduce documentation errors. This will
allow CMS to focus on the prevention of improper or fraudulent claims and will reduce
Medicare’s current reliance on the practice of “pay and chase” for inappropriate billing, which
occurs when the service is paid and CMS relies on postpayment review and recoupment of
improper payments, particularly through the utilization of pre-claim review.
To evaluate compliance options beyond a “pay and chase” approach, this demonstration will
enable CMS to test the level of resources required for an inpatient rehabilitation payment
procedure that determines whether applicable Medicare coverage and clinical documentation
requirements are met before the claim is submitted for payment. This demonstration will also
determine the feasibility of performing either pre-claim review or postpayment review for
services that have historically demonstrated high instances of potential fraud and to determine a
return on investment (or other metrics) for different types of reviews of IRF claims. CMS
believes this approach has the benefit of assuring that IRFs submit evidence demonstrating that
the beneficiary’s condition meets the Medicare coverage policies for IRF services, thereby
ensuring beneficiaries appropriately receive care and reducing the incidence of improper
payments. The IRF and beneficiary are also assured that the claim meets Medicare coverage
policies for inpatient rehabilitation therapy and is likely to be paid.
IRF claims for which there is an associated provisional affirmative pre-claim review decision
will be paid in full, so long as the claim was billed and submitted correctly. Absent evidence of
possible fraud or gaming, claims will not be subject to postpayment review by MAC, RAC, or
SMRC. Claims could still be selected for review based on potential fraud or for purposes of
measuring the Medicare improper payment rate.
One commenter stated that Medicare should require prior authorization for admissions to
IRFs.
Response:

CMS thanks the commenter for their feedback. CMS will test different review options through
the review choice demonstration, while offering choices to providers to best meet their needs,
incorporating risk, and rewarding providers who show compliance with Medicare IRF policies.


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AuthorJaclyn Gray
File Modified2021-08-24
File Created2021-08-24

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