Inpatient Rehabilitation Facility (IRF) Classification FAQs

IRF Excluded Unit Review Frequently Asked Questions

1. Who at WPS do I contact for questions on the IRF review and who do I submit related documentation to?

At WPS, our Audit Advisement team is responsible for reviewing and fielding questions on the IRF Classification Review process. Below are the contact names and email addresses for the two main provider-based contacts at WPS.

Name: Mindy Chesnut
Title: IRF Excluded Unit Review Coordinator
Email: Mindy.Chesnut@wpsic.com
Name: Chris Severson
Title: Audit Advisement Supervisor
Email: Chris.Severson@wpsic.com

IRF Excluded Unit Review Submission Address:

Delivery/Overnight Service:

WPS Medicare
Attn: Chris Severson
Medicare Audit Advisement
3333 Farnam Street, Suite 700
Omaha, NE 68131

Regular Mail Service:

WPS Medicare
Attn: Chris Severson
Medicare Audit Advisement
P.O. Box 8310
Omaha, NE 68108-0310

2. How do I know when the review is scheduled to begin?

Approximately four months prior to your next scheduled fiscal year begin date you should receive a letter requesting that you submit your initial information for review. The request letter will detail what should be submitted, by when, and to whom. More detail is discussed below as well.

3. It is already past four months prior to our next fiscal year begin date and we still haven't received a request letter. What happened?

When we send the initial request letters out we rely on contact information that was originally submitted through your enrollment application. If you have changed contact names, addresses, or phone numbers without reporting them to us, your request letter may be delayed or sent to the old contact as a result. It is extremely important that you update us with any changes in administrators, addresses, or other contact information so that we can ensure your request is sent to the proper contact. This updating is done by completing all or part of the CMS Enrollment Form 855 (see next question.)

Per 42 CFR 424.520(b), failure to report such changes through the CMS form 855 within 90 days may result in the deactivation or revocation of the provider's Medicare billing privileges.

4. Who at WPS do I contact for questions on the CMS Form 855 (Enrollment Application Form) and who do I submit related documentation to?

At WPS, our Provider Enrollment team is responsible for reviewing and fielding questions on the provider-based attestation process. Below are the contact names and email addresses for the two main Provider Enrollment/855 contacts at WPS.

Name: Catherine Hughes
Title:Provider Enrollment Program Analyst
Email: Catherine.Hughes@wpsic.com
Name: Nic Chesnut
Title: Provider Enrollment Supervisor:
Email: Nic.Chesnut@wpsic.com

CMS Form 855 Submission Address:

Delivery/Overnight Service:

WPS Medicare
Attn: Nic Chesnut
Medicare Provider Enrollment
3333 Farnam Street, Suite 700
Omaha, NE 68131

Regular Mail Service:

WPS Medicare
Attn: Nic Chesnut
Medicare Provider Enrollment
P.O. Box 8310
Omaha, NE 68108-0310

5. How is the IRF Classification Review performed?

We are required to review a specified compliance period to determine whether a required percentage of patients from your total patient population (Medicare and Non-Medicare patients) fall under one of the allowed list of 13 medical conditions that would classify them as rehab patients. A list of these medical conditions can be found via a link on the front page of this section.

There are two different levels of reviews that may be performed, depending on the situation. These levels of review are known as the "presumptive" method and the "medical review" method.

Under the presumptive method, we review previously submitted IRF-PAI data related to your Medicare patient population to "presume" that the total patient population would meet the criteria as well. It is important to note that the presumptive method can only be used if the following two criteria are met:

  • There are more than 100 total inpatients in your population.
  • More than 50% of the total population consists of Medicare Part A fee for service patients. Note that only Medicare Part A inpatients are counted in this 50%. Medicare Part C (aka HMO, Medicare Advantage) do not count towards the initial 50% test.

If either of these requirements is not met, or if the presumptive method yields a failed compliance percentage, we are unable to rely on the presumptive method and must continue with a more detailed review of the entire population (or a sample thereof).

This second type of review is known as the Medicare Review method. If the Medical Review method is used, we will request more detailed information for all of your inpatients (if fewer than 100 total) or a sample of your inpatients (if over 100 total.) This detailed information will consist of:

  • Acute Admission H&P and Discharge Summary
  • IRF Admission H&P
  • Patient's height and weight (note that there is one Medical Condition in the allowed list that is based on BMI)
  • PT/OT/SLP Evaluation only
  • IRF PAI Detailed Data

If you have 100 or fewer inpatients you are requested to send this detailed information for all of your patients at the time of initial submission. However, if you have more than 100 inpatients, we will request the detailed information at a later time if we need it. If you have fewer then 50% Medicare patients or if the presumptive method resulted in a failed compliance percentage we will identify a sample and request information for that sample of patients in a separate letter.

6. What compliance period will this review cover?

For most ongoing reviews, the end of this compliance period will be four months prior to your upcoming fiscal year begin date, and it will extend back 12 months from that compliance period end date. As an example, if you are a 12/31 provider and your next fiscal year begins on 1/1/09, then your compliance period will be 9/1/07 through 8/31/08. The review of data from this compliance period will determine whether you will continue to be classified as an IRF in the period beginning 1/1/09. Note that this compliance review period, by definition will include portions of two cost reporting periods. Because this review determines your status for the upcoming period, four months are built in for review time for the FI/MAC and CMS. There are certain instances discussed below where new providers may have a longer compliance period.

7. What compliance percentage must be met?

Historically the compliance percentage was set at 75%, thus it is often referred to as the "75% compliance review". However, past legislation has amended this compliance percentage. It is currently set at 60% for all periods beginning on or after July 1, 2005. In summary, 60% or more of your total patients must fall under one of the allowable medical conditions.

8. How does this review apply to a new rehab hospital?

Per CMS Pub. 100-04, Chapter 3, Section 140.1.5, a hospital that has not previously participated in the Medicare program (or one that has undergone a change of ownership), and seeks exclusion from the acute care hospital PPS for the entire hospital, may provide a written certification that the inpatient population the hospital intends to serve will meet the compliance requirements, instead of showing that it has treated such a population during its most recent, consecutive, and appropriate 12-month time period (as defined by CMS or the FI).

The written certification is effective for the first full 12-month cost reporting period that occurs after the hospital becomes a Medicare participating hospital, and for any cost reporting period of not less than 1 month and not more than 11 months occurring between the date the hospital began participating in Medicare and the start of the hospital's first regular 12-month cost reporting period of Medicare participation. See the main page of the IRF section of this website for a sample written certification letter.

Please note that if you are a new rehab hospital, this will affect the first compliance review that will determine whether you can continue IRF classification into your second twelve month period. The compliance period will be from the first date the facility provided services through four months prior to the fiscal year begin date for your second twelve month cost reporting period. If this review reveals that the facility did not meet the criteria during the period that was attested to, CMS may recoup any of this excess payments to the hospital retroactively. The FI/MAC effectuates this payment adjustment to the hospital by calculating the difference between the amount actually paid for services to Medicare patients in the hospital during the period of provisional exclusion and the amount that would have been paid if the hospital, unit or beds had not been excluded from the acute care PPS.

The FI/MAC then takes action to recover the resulting overpayment or corrects the underpayment to the hospital.

9. How does this review apply to a new rehab unit of a hospital or a unit that is converting from providing acute care services to providing rehab services?

The answer to this question depends on whether the unit qualifies as a new or converted unit. Per CMS Pub. 100-04, Chapter 3, Section 140.1.7, a unit qualifies as a new IRF unit if the hospital:

  • Has not previously sought exclusion from the acute care hospital PPS for any rehabilitation unit; and
  • Has obtained approval, under State licensure and Medicare certification, for an increase in its hospital bed capacity that is greater than 50 percent of the number of beds in the unit. In other words, a unit of a currently participating hospital that includes some beds that were previously licensed and certified, and some new beds, is recognized as a new inpatient rehabilitation unit only if more than one-half of the beds are new.

If you meet the requirements as a new rehab unit then the same provisions apply as in question #8 above for new rehab hospitals.

Please see the main page for a sample of this written attestation letter.

If you do not meet the requirements for "new" status then the unit will be considered a "converted" unit. In such a case, the unit will have to meet the same compliance review requirements as an existing IRF facility. In this case, although the unit will be providing rehab services, it will still be reimbursed under the IPPS (Acute Care) DRG methodology for the period of time needed to meet the compliance review requirements. Once the provider has acquired sufficient data for that compliance period to support their compliance with the required compliance percentage, they may then qualify for reimbursement under IRF PPS for the next period. This will not affect how they were paid during their compliance period (sometimes referred to as the DRG year.)

Please note that there are required compliance periods related to every possible fiscal year begin date. Each compliance period must be 12 months in length and must end prior to 4 months before the next fiscal year begin.

10. How do these review requirements apply if we are adding beds to an existing rehab unit?

Similar to a new unit, expansions of beds can only be considered as "new" if more than one-half of the beds are new, as opposed to simply being converted from prior acute care status. If the provider meets the requirements for "new bed" status, then they may use the written certification discussed above to attest that they intend to meet the compliance criteria.

If the expanded beds do not meet the requirements for "new" status then they will be considered "converted" and must submit data to show that they actually served a patient population equal to or greater than the required compliance percentage. Similar to the converted unit, they will be paid under the IPPS DRG methodology for the period of time until they become classified as IRF beds. They must follow the same compliance period as the converted units in question #9 above.

Note that per CMS Publication 100-04, Chapter 3, Section 140.1.3Q (last paragraph), any change in bed size, or space occupied by the units must occur at the beginning of the cost reporting period. Any beds that are added to the unit in the middle of a cost reporting period will continue to be paid under the acute care DRG system (rather than the IRF PPS system) until the beginning of the next cost reporting period.

11. How do these review requirements apply if we are adding beds to an existing rehab hospital?

Although there is a distinction between new and converted beds in an IRF unit of an acute care hospital, there is no similar distinction in an IRF hospital. In an acute care hospital with an IRF unit, beds can be converted from the acute care portion of the hospital to the IRF unit of the hospital. In an IRF hospital, there is no acute care portion to convert beds from. As such, all beds that are added to an IRF hospital are considered to be "new" beds, thus they can be added provisionally using the written attestation discussed in an above section.

Furthermore, there is no specific requirement under CMS Publication 100-04, Chapter 3, Section 140.1.1 (the hospital counterpart to the Section 140.1.3 discussed above) that the beds only be added at the beginning of the period. As such, a change in bed size in an IRF hospital can be made at any time as long as the facility follows the correct procedures through their State Licensing Agency to increase the licensed number of beds, and as long as the facility notifies the FI/MAC prior to the change.

12. How do these review requirements apply if our facility does not qualify as a "new" unit, or our added beds do not qualify as "new" beds.

For units or beds that do not qualify as "new", we are required by CMS to review twelve months of data related to the patients served in the converted unit or in the converted beds. This twelve months of data must END four months prior to the next fiscal year begin, and it must BEGIN twelve months prior to that. If twelve months of data is not available for submission by four months prior to the next fiscal year begin date, then the new unit or new beds will not be available for classification as IRF until a later fiscal year.

For example, if a provider has a 1/1/09 upcoming Fiscal Year Begin, we MUST review data from 9/1/07 through 8/31/08. If data is not available for this entire time period, then the unit or beds can not be classified as IRF until 1/1/2010.

Page Last Updated: Monday, 31-Oct-2011 09:00:03 CDT