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OIG: CMS overpaid $5.9 million for interrupted rehab stays

Compliance Monitor, January 11, 2006

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TThe OIG has recommended that CMS direct its fiscal intermediaries to recover $5.9 million in overpayments to rehabilitation facilities (IRF). The overpayments were billed in noncompliance with regulations for interrupted stays, according to the OIG.

To perform the audit, the OIG used a nationwide computer match designed to identify interrupted stays billed as multiple claims. The audit found that found that during 2002 and 2003, Medicare made net overpayments of $5.9 million to 589 IRFs for interrupted stays billed as two or more claims.

The OIG further recommended that CMS use the audit results to clarify guidance to IRFs regarding the correct billing of interrupted stays and strengthen the edit in its Common Working File to detect all interrupted stays incorrectly billed as two or more claims.

CMS implemented the prospective payment system for cost reporting periods beginning on or after January 1, 2002. The IRF payment system uses federal prospective payment rates across 100 distinct case-mix groups. A number of adjustments may apply to the case-mix-group payment, including adjustments for interrupted stays in which a Medicare inpatient is discharged from an IRF and returns to the same IRF within three consecutive calendar days. For payment purposes, the IRF should combine the interrupted stay into a single claim and receive a single discharge payment.

Click here to read the audit report, "Nationwide Review of Compliance With the Interrupted Stay Provision of the Inpatient Rehabilitation Facility Prospective Payment System for Calendar Years 2002 and 2003," (A-01-04-00525) issued December 19, 2005.

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