Irf Medical Necessity

Medically Necessary Defense for IRF
Cases Denied Payment on Audit

Darlene L. D’Altorio-Jones, PT. MBA HCM
Clinical Consultant, MediServe
OARF presentation 5/21/09 (modified)

MediServe Confidential © 2009 MediServe, Inc. All Rights Reserved.

Medical Necessity as Defined by the ‘RULE’

This in-service is intended to be used as:
 1.) An understanding of the 85-2 Medical Necessity
Ruling
 2.) Background information leading up to intensified
medical necessity audits/defense requirements
 3.)Provide readily usable templates that help staff
perform medical necessity rebuttal documentation for
records challenged prior to 1/1/2010 given ‘new’
conditions of participation

MediServe Confidential 2 © 2009 MediServe, Inc. All Rights Reserved.

LEARNING OBJECTIVES:
 Medical Necessity – How is it defined for admission to an
IRF?
 Compliance – 60/40 vs. Medically Necessary; the
importance and understanding that each is different!
 85-2 / WHAT exactly does it mean; where did that rule
come from?
 Preparing a short and long term STRATEGIC
DOCUMENTATION PLAN is critical for financial survival.
 A template to successfully defend denied IRF cases.
 A second template that demonstrates why Skilled
WASN’T the appropriate level of care for round 2
rebuttals.
 Outpatient Medical Necessity Review


IRF – Special Purpose Facility
with Special Purpose Regulations
 Prior to IRF PPS, Rehabilitation Hospitals/Units
were exempted from standard Medicare Part A
DRG payment
 Defined by patient populations that generally required a
rehabilitation level of care.
 Annual facility attestation required that 75% of
TOTAL admissions had to meet 10 rehab
classified diagnoses to meet DRG exemption.
(Changed SB514 12/07 =freeze 60%)

 Rehab ‘10’ was maintained until 2004 when ‘13’
more defined categories were established and
more thoroughly defined.
Medicare Benefits Policy Manual Chapter 1; Fed Register Section 412.29


IRF PAI – Beginning & Purpose
 Prospective Payment System
 Implemented in 2002 to cover Part A Medicare Rehab
Patients – Enforced Balanced Budget Act expectation
 Near 20 year wait for promised IRF PPS roll-out after acute
DRG’s took effect with specialty carve outs 10/83.
 Tool uses patient burden/resource care needs to define costs
rather than diagnosis alone because scope of functional
independence & severity of disablement is a complex
equation.


IRF PAI – Beginning & Purpose

 Prospective Payment System
 Instrument completion defines payment & guides
length of stay – Accuracy and detail to guidelines
are paramount to ensure reimbursement
compliance.
 18 item; Functional measurement scale embedded in tool
 Captures diagnosis/demographics & scores to define Medicare payment levels; with
a tiered CMG grouper


60/40 vs. Medically Necessary

 These CMG classifications have payment criteria
at every level of the 21 RICS (353 with 5 special
cases possible).
 The fact that CMG’s range from the very least
complex to the most complex each having an
attached payment weight signifies that each level
and their range in length of stay is appropriate for
that case.
 However; if patients present at a level that may be
‘managed at a skilled’ level of care, it may be hard
to justify rehabilitation in an IRF.
 This is a major reason why 85-2 will be dissolved with
specific rule guidance and conditions of participation
redefined in Medicare Manual revisions by 1/1/2010.


Medically Necessary & ‘co-morbid conditions’

 Comorbidities – ICD-9-CM assigned for additional conditions
that are MANAGED during the rehab stay that are ‘in addition
to’ normally expected conditions of the admission IGC
(impairment group code).
 Conditions ‘expected’ for an IGC are factored into the payment
category; there are an additional 10 fields – List conditions being
treated even if they may not gain a tiered condition - order of
listing is not important.
 CMI or case mix index is assigned that weights severity &
provides multiplier for specific facility payment rate.


Know Importance of IRF Alphabet Soup

 Complications – ICD-9-CM assigned when additional conditions
are managed in the IRF/U stay anytime prior to 24 hours of
discharge.
 CMG – Case Mix Group
 Assigned with completion of the PAI – requires function / age /
cognition / co-morbidities (Grouper then classifies case)
 Defines burden & resource utilization in total that translates to
payment and length of stay guidelines.
 Letters A-D used for tier level A=0, B=1 (high), C=2 (medium), D=3
(low) severity = reimbursement weighted rating.



 The 2004 published CMS changes along with LCD inclusion
interpretation of 10 to 13 RIC’s; led to industry pandemonium.
 The largest number of rule comments ever received by CMS in
the history of rule comments was received.
 Arguments that a ‘percent compliance’ rule and ‘medically
necessary’ admission criteria was no longer relevant since
PPS IRF-PAI CMG classification outlined payments congruent
with resources utilized from minimal to maximal severity
indexes.
 The need for rehabilitation alone does NOT denote acceptance
to an IRF level of care.
 Why have payment guidelines for 0101 tier A or D? It’s a rhetorical
question not easily answered.
 Confusion has led CMS to significantly revamp Medicare
Benefit Policy Manual and Conditions of Participation for the
2010 regulation updates.



 A December 2007 freeze (SB 543) was enacted - known as the
60% rule.
 This step was taken to allow time for further documented evidence
& research enabling providers and CMS to define clinically
relevant, MEDICALLY NECESSARY guidelines for IRF admission.
 For facilities with challenged cases prior to 1/1/2010, they must
defend & recover payment for care using the 85-2 criteria.
 Documentation that is step in step with the criteria increases
likelihood in your defense.
Rule 60% vs. 40%
Non-Compliant

Compliant



 It is possible for patients to have a compliant RIC
diagnosis but not meet LCD standards or the 85-2 ruling
for Medically Necessary admissions.
 Changing compliance downward was perceived to
assist facilities through a 60/40 compliant % mix,
however:
 Once challenged, HCFA compliance is upheld by
defensible 85-2 standards, not whether a patient meets a
60% RIC category.
 ALL DEFENSE is in the clarity of documentation that
demonstrates clinical complexity and a skilled plan of
care by the interdisciplinary team that addresses every
roadblock for discharge.
 MediLinks provides detailed interdisciplinary charting that
meets these criteria to defend Medical Necessity.



 Compliant diagnoses can be retrospectively denied
by fiscal intermediaries through CERT & RAC
audits.
 The balanced budget act demanded fiscal
intermediary and audit contractor due diligence
which led to challenges never before faced in our
industry.
 These factors continue to cause significant
POST-payment denials; rebuttal documentation,
and the need to defend MEDICAL NECESSITY
using 85-2 is paramount for success.
 MediLinks is a specialty rehabilitation
software that meets this special niche.



 REPEAT ---
 Rehab 13 is not the measurement for automatic
Medically Necessary Admission Criteria.
 Rehab 13 is the measurement of ATTESTATION
required to maintain licensure as a condition of
participation for SPECIALTY STATUS as a rehab
facility /unit - showing your facility meets
reimbursement under the PAI. It’s only a portion
of Conditions of Participation as an IRF.
 It’s extremely important to operationalize the
difference.


Reference 85-2 Ruling

 Was issued in 1985 & set clear, clinically-based
rules for inpatient rehabilitation coverage and
have been used by HCFA/CMS over more than
two decades to determine what constitutes
medically necessary inpatient rehabilitative care.



 What exactly is the 85-2 Ruling?
 It was established by Federal Law in 1985 and
requires 2 clinically relevant requirements be met in
8 different areas.
 This landmark ruling defined what made a
rehabilitation facility ‘special & unique’ as a carve out
facility and what criteria needed to be followed when
deciding appropriate cases to admit to an inpatient
rehabilitation facility/unit.
 Up until 2010 it is the SOLE defense for medically
necessary admissions.


 This is why HCFA 85-2 criteria has resurged
importance; defending each area to refute cases
denied assists in the ability to regain payment.
 Unfortunately this retrospective process adds costs
and rework making predetermination documentation
based on 85-2 criteria the most hallmark key for
establishing admission criteria and continued
treatment. * through 12/31/09.
 Law Judge Review; One of the last steps in the legal
defense process uses 85-2 as the sole criteria for
establishing Medically Necessary rehabilitation level of
care.
 If documentation does not CLEARLY demonstrate the
criteria as being met, you will have to abstract
evidence within the chart to demonstrate it during the
rebuttal process.


 If you can’t defend 85-2, you will NOT RECOUP payment for
your care; this is despite absolutely excellent outcomes.
 Due-diligence in pre-admission assessments, following Medically
Necessary criteria for admission must be followed.
 If a pre/post admission case significantly changed, whereas the
patient no longer required an intensive plan of care consistent
with industry guidelines; it is your obligation to provide the
patient advanced beneficiary notification stating why services
may not be covered.
 At the very least, this should be recognized by the first patient evaluation
conference and communicated as a case that could be challenged.
 Discharge Notification; allowing the patient the ability to challenge a
continued stay and forcing a review of the medical record is useful.
 Subsequent Quality Review will solidify coverage determination.
 Automatic invocation of the 3-10 day trial has led to believed misuse of this
timeframe – with removal from the new regulations!


 Facilities are scrambling to survive and must struggle through
prolonged processes of up to a year and a half to regain payment
in greater than 85% of all cases refuted.
 Unclear documentation or documentation that does not clearly
support the eight criteria are at risk.
 Clinicians must understand and document toward the skill sets they provide at
a skill level unique to that provided at the intense level of care within an IRF.
 Going forward until 12/31/09; the most relevant preparation an IRF
can make is to hard wire 85-2 for admission and continued need
for rehab as the primary mission for all documentation.
 If you don’t have documentation software that clearly justifies the
outlined criteria, it’s important to educate required documentation
importance so that no areas are left in question.


Medically Necessary HCFA 85-2 Ruling

 HCFA Ruling 85-2 established two basic requirements in 1985 that
must be met for inpatient hospital stays to be covered for a
rehabilitation level of care.
 THERE WERE:
 1. The services must be reasonable and necessary (in terms of efficacy,
duration, frequency, and amount) for the treatment of the patient’s condition;
and
 2. It must be reasonable and necessary to furnish the care on an inpatient
hospital basis, rather than in a less intensive facility, such as a skilled nursing
facility (SNF), or on an outpatient basis.


FINAL RULE – pg. 39790 FR


Medically Necessary HCFA 85-2 Ruling

 The Ruling then sets forth eight criteria, which, if
satisfied, demonstrate that both of these two
requirements for inpatient rehabilitation are
satisfied. These eight criteria stipulate that the patient
must require:
 1. Close medical supervision by a physician with specialized
training or experience in rehabilitation;
 2. Twenty-four hour rehabilitation nursing;
 3. A relatively intense level of rehabilitation services;
 4. A multi-disciplinary team approach to delivery of the program;
 5. A coordinated program of care;
 6. A significant practical improvement must be likely;
 7. The rehabilitation goals must be realistic; and
 8. The length of the rehabilitation program must be reasonable.

Encoding Advocacy through Appropriate PAI Documentation 22

Confusing?
 Medical Necessity 85-2 court case ruling supersedes 60/40
in a challenged medical record:
 As individual cases are challenged through CERT
(Comprehensive Error Rate Testing) & RAC/MAC (Recovery
Audit Contractor/Medicare Administrative Contractor) audits:
 Medical Necessity documentation must meet 85-2; not
60/40 RIC inclusion classification.
 60/40 is the facility rolling % average on any given day up to the
final day of the attestation period.
 Even if a RIC ‘fits’ 60/40 compliance; “Can you defend the
8 criteria required to meet a Medically Necessary level of
care for an IRF/U is the REAL question?”


Use the OIG website to Review Concerns

 ‘Care could have been rendered in a less intensive setting & or
the patient was NOT capable of SIGNIFICANT improvement’ are
reasons the OIG asked for increased case review.
 The Office of the Investigator General believes inappropriate
patients have been admitted to IRF’s based on poor documentation.
Documentation to support the 8 criteria decreases your liability for
denied payment.


How to defend challenged records
 Educate Staff on  Review short and long
guidelines of medical term liability plans.
necessity.  Utilize best of breed
 Create a template that rehabilitation software
‘tags’ information specific such as MediLinks,
to 85-2 ruling which enables you to
 When permitted, tag meet regulatory nuances
each area and in a seamless ‘behind
summarize your the scenes’ manner.
argument for each of the  Compliance is BUILT IN
8 criteria. to MediLinks workflow.


TEMPLATE for 85-2 Medical Necessity Defense
 Provider Number & Name:
 Patient Name:
 HICN: (Covered SS # with letter)
 DCN: (Medicare document control # for this episode of care)
 From/Through: (dates)
 Denial Code: Provided with documentation from audit
contractor.
 Patient Introduction: -------------- is a ---------- year old
(male/female) transferred to IRF NAME --- days post ------------ .
State GOAL for admission & relate the goal to their previous
functional capacity and abilities; non-institutional residence.
 IRF NAME feels that -------------- met the ruling 85-2 definition of
‘reasonable and necessary’ and required a rehabilitation level of
care because the following eight screening criteria established
by CMS for ‘reasonable and necessary’ have been met in the
following ways.


1 .Close medical supervision by a physician with
specialized training or experience in rehabilitation.

 Dr. --------, MD Board Certified PMR, was the physiatrist
for ------------. (Outline credentials of they physician with
specialized training responsible for the POC). The
physicians admission consult summarized medical and
physical limitations and goals along with the plan for
attaining those goals. (Tab # ) He reviewed his plan
during ------- different team conferences outlining
progress and continued need for rehabilitation. His last
note summarized progress on --------- date (outcomes
and disposition).


2. Twenty-four hour rehabilitation nursing:

 (Patient name) required (special nursing
interventions & dates) . (Review fall risk, pain
level, safety interventions, skin interventions,
bowel/bladder, medically complex vigilance in
neuro/medical checks & interventions). Nursing
assisted the patient in the rehabilitation plan of
care providing 24/7 intervention and training
towards independence.
 Do you know your daily CMI (case mix index)? Can
you defend hours of nursing care per day greater than
a skilled nursing home level of care? MediLinks users
can!


Each patient requires different nursing hppd

The patient care
required at a
Rehabilitation
Level is
significantly
greater than
these noted for
skilled care.
KNOW your
individual
patient
CMI .
Demonstrate
their care
required the
level provided
and that it was
GREATER than
the skilled
Requirement.


3. Relatively intense level of rehabilitation services:

 Provide amount of therapy provided; gather
evidence and calculations demonstrating that the
patient met the 3 hour rule; flag documentation that
may support when unable to meet for appropriate
medical purposes. Include specialty consults;
orthotics etc.
 These reports are built in features of MediLinks.

30

4. Multi-disciplinary team approach to delivery of program:

 (Patient name) received daily nursing & attended
therapy ______ days a week. HE/She received PT,
OT, Speech, Respiratory, Psychology etc., in addition
to Recreational therapy, support groups, spiritual
support etc. Notes were written at and documented in
treatment and progress areas. Weekly progress and an
updated plan of care is presented in the evaluation
conference documentation. Dr. ----------------
summarized conferences for Mr./Ms.______ stay, care
and provided outcomes on the discharge summary
dated ---.(Tab # ).
 MediLinks creates interdisciplinary (new 2010
regulation wording) plans of care and goal
documentation unrivaled in any other software system.


5. Coordinated program of care:

 Pre-admission assessment revealed ------------------
summary of H&P information (Tab # ). Also, please
see medical director comments attached (Tab # ).
See Pre-Admission screening tool and rationale for
admission. (Tab #) (Previously these were not
mandated as part of the Medical Record; this is an
opportunity to provide a copy of the screening
information when you performed a due diligence
assessment.) The areas tagged should reveal
multiservice LOC needs.
 MediLinks pre-admission screening is specific to
meeting regulatory guidelines.


6. Significant practical improvement:

 (Create a radar or bar graph with relevant
comparison of pre/post functional gains.)
Highlight specific FUNCTIONAL goals and how
those translated to gaining the least possible
assistance required for specific important
functions. Patient name, made a ------- point
functional gain ------------------------ and was able
to return -------------------------- meeting significant
practical improvement over their admission
functional status.
 MediLinks has reports that demonstrate goal
achievement.

7. Realistic Goals:

 (Describe portion of goals met esp. if home
going along with improved independence or
ability to avoid institutional placement). Discuss
road blocks that were met in order to gain non-
institutional discharge. Highlight caregiver
training etc. If institutional d/c occurred despite
caregiver’s original intentions; note and tag
when this change occurred. It is extremely
important to demonstrate all areas where
predefined expectations were met.


8. Length of rehabilitation program:

 After completing (pt name) care and improving his/her
overall medical condition; List summary of functional
improvements. This required a ----#---- day stay
(compared to published CMG LOS) of ----------- days.
IRF NAME utilizes the published CMG LOS as a
guideline and tailors a patient’s stay based on individual
needs. In 200_ we treated ------ patients with the same
CMG whose average LOS was ---- days, which is ------
days less/greater than the expected LOS for CMG -------
-. Use any historical reference that denotes logical LOS
based on patient conditions present.
 There are reports available in MediLinks that alert you of
individual patient status in relation to expected LOS.


The ending statement should read like this

 Based on the documentation provided which
meets the criteria set in HCFA Ruling 85-2,
issued July 31st, 1985, as the sole standard for
determining the medical necessity of services
provided by inpatient rehabilitation hospitals
and units, we would like you to reconsider the
denial of this claim which clearly meets each
of the required elements of Medically
Necessary care.


Template # 2. > SNF LOC Argument
 When the 85-2 template argument is still denied; yet the
patient had risks that were managed effectively by the
intensity of the rehabilitation level of care; the reverse
argument can be presented stating why SNF was not
the practical alternative to the care the patient received.
 Follow the link below to review research specific to total joint
replacement outcomes when reviewing skilled vs. a rehab level of
care. Use this literature in your defense for appropriate placement
to your rehabilitation program when patients met medical
necessity.
 http://www.cms.hhs.gov/eRulemaking/downloads/C
MS-1551-PPaperComments7-13.pdf


Defending THERAPY OUTPATIENT CARE

 It’s important to review the regulatory guidelines for
required documentation criteria when charting for
Medicare part B outpatient care.
 Train staff on the minimum standards so that all
areas are complete.
 MediLinks outpatient documentation and billing
assists staff in meeting rigorous requirements in
the course of their normal documentation.
 Workflow templates and scheduling software in
conjunction with the outpatient product increase ability to
track preapproved visits and the need for recertification.


 220 - Coverage of Outpatient Rehabilitation Therapy
Services (Physical Therapy, Occupational Therapy, and
Speech-Language Pathology Services) Under Medical
Insurance
 (Rev. 88, Issued: 05-07-08, Effective: 01-01-08,
Implementation: 06-09-08) Medicare Benefit Policy Manual
Ch. 6

Transmittal 63 has been replaced by Transmittal 88,
published on May 7, 2008


OP Coverage & Medical Necessity
Chapter 6 - Hospital Services Covered Under Part B
 20 - Outpatient Hospital Services
 20.2 - Distinguishing Outpatient Hospital Services
Provided Outside the Hospital
 20.4.1 - Coverage of Outpatient Therapeutic Services
Chapter 13 - Local Coverage Determinations 13.5.1 -
Reasonable and Necessary Provisions in LCDs
Specific Therapy Policies. Sections 220 and 230 of this
chapter describe the standards and conditions that apply
generally to outpatient rehabilitation therapy services.
http://www.cms.hhs.gov/transmittals/downloads/r88bp.pdf


Defending OP Process & Med Necessity

 POC & Certifying the POC
 Services written to a specific Rx plan
 Signature/identity/date must be recorded.
 Content:
 Dx, LTG (for entire episode or the part being
certified).
 Type, Amount, Duration & Frequency
 Plan consistent with related evaluation.


PLEASE NOTE:

 The additional attached slides are excellent
resources for education and planning as a strategy
to proactive documentation and or to defend
Medical Necessity using regulatory guidelines.
 The areas listed on the following slides were
utilized in gathering information required to
complete this presentation and credit and
acknowledgement is given for this purpose as well.


Excellent Training References:

AHAAccesstoRehab.pdf


NGS (Previously Administar Federal) published the LCD
for Ohio Inpatient Rehab Facilities

Reviewed Federal Register Sections 110.1 – 110.5
Guidelines for admission and medical necessity.


March 2007, Healthcare Financial Management Association
www.hfma.org Published this article encouraging IRF providers to
use 85-2 as a rebuttal argument to medical necessity.


MedPaC Report to Congress
Medicare Payment Policy pgs. 201 – 215. Chapter 3 C.


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