This month, OIG updated its work plan to include a new Inpatient Rehabilitation Facility (IRF) Nationwide Audit. In explaining the new workstream, OIG cited high IRF error rates in other reviews and plans to determine whether Medicare IRF payment requirements require clarification.

In the work plan entry, OIG states that in fiscal year 2021, Medicare paid approximately $8.7 billion for 373,000 IRF stays nationwide. OIG noted that CMS has consistently found high IRF error rates through its Comprehensive Error Rate Testing program. OIG explained that it previously issued a nationwide audit of IRF claims in September 2018, available here, where OIG found that medical record documentation for 175 of 220 sampled IRF stays did not support that the IRF care was provided in accordance with Medicare requirements. In addition, OIG states that its Hospital Compliance Audits often include IRF claims and have also found high error rates. OIG acknowledged, however, that IRF providers and other stakeholders have responded that CMS contractors and OIG misconstrue IRF coverage regulations.

Accordingly, OIG states that it plans to determine whether there are areas in which CMS can clarify Medicare IRF claims payment criteria. Specifically, OIG states that it believes “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.”

OIG also plans to follow up on the recommendations to CMS outlined in its prior nationwide IRF audit. Those prior recommendations include additional education on IRF coverage and documentation requirements, increased oversight activities for IRFs, evaluating the Administrative Law Judge hearing process to ensure IRF requirements are fairly represented, and reevaluating the IRF payment system.

The expected issue date of the report related to this new audit is in 2024.

The OIG work plan entry is available here.