Medicare Inpatient rehabilitation facility (IRF) Coverage

Medicare Inpatient Rehabilitation Facility (IRF) Coverage

Medicare Part A (Hospital Insurance) covers medically necessary care that insured patients receive in an inpatient rehabilitation facility or unit (‘ inpatient ‘rehab facility, IRF, acute care rehabilitation center, or rehabilitation hospital).

What Determines Medicare IRF Coverage Eligibility?

Importantly, a physician must certify that the patient has a covered medical condition requiring intensive rehabilitation, continued medical supervision, and coordinated care from your care team of physicians and therapists working together.

What are the Costs to the Federal Insurance Program for Inpatient Rehabilitation?

In brief, according to MedPac, in 2013, Medicare spent $6.8 billion on fee-for-service inpatient rehabilitation facilities (IRFs) care provided in about 1,160 IRFs nationwide. About 338,000 beneficiaries had more than 373,000 IRF stays. On average, sixty-one percent of IRF discharges are Medicare insureds. In 2016, Medicare spent $7.7 billion on fee-for-service (FFS) IRF care provided in about 1,200 IRFs nationwide.

What are the Types of Inpatient Rehabilitation Facilities?

In fact, reporting data is captured by the Medicare Payment Advisory Commission (MedPAC):

• Urban or Rural.  93% of all IRFs are urban as of 2016.
• Freestanding or Hospital Based. 50% percent of all IRFs are Freestanding, and 50% are Hospital-based.
• Non-Profit (41%) or For Profit (52%) and Government (7%)

Medicare Inpatient Coverage and Insured Out-of-Pocket Costs

A beneficiary pays different amounts for each episode of care during each benefit period:

• Days 1-60 – set deductible.*
• Days 61-90: daily coinsurance
• Days 91 or more days: coinsurance per each “lifetime reserve day” after 90 days for each benefit period (up to 60 days).
• Each day after lifetime reserve days, the Medicare insured bears all other costs.

*A Medicare insured does not have to pay a deductible for the care received in the inpatient rehabilitation facility if a deductible for the care is already charged in a prior hospitalization within the same benefit period.

Medicare Covered Rehabilitation Services

Furthermore, inpatient rehabilitation covers insureds who are recovering from a high-acuity condition that requires surgery for certain illnesses or injuries. Services include therapy programs, physician supervision, and doctors and therapists who provide coordinated care.

Medicare rehabilitation services cover:

• Physical therapy, occupational therapy, and speech-language pathology
• Semi-private rooms and meals
• Nursing services
• Medications
• Other services and supplies

Medicare does not cover:

• Private nursing
• Phone or television in your room if there is an additional charge for it
• Personal items (unless provided as part of hospital admission at no extra charge).
• A private room unless there is physician documentation of the medical necessity

Inpatient Diagnoses and Episodic Codes for Inpatient Rehabilitation Facilities

1.     Rehabilitation with comorbid conditions / major comorbid conditions

2.     Rehabilitation without comorbid conditions / major comorbid conditions

3.     Alcohol/drug abuse or dependence with rehabilitation therapy

4.     Alcohol/drug abuse or dependence without rehabilitation therapy, with major comorbid conditions

5.     Alcohol/drug abuse or dependence without rehabilitation therapy, without major comorbid conditions

The Joint Commission recognizes disease-specific care, integrated care, cardiac care, total hip, tobacco, psychiatric, and memory care.

Applicable Facility by Condition

First, an inpatient rehabilitation facility may be indicated for patients with complex medical conditions who require intense medical rehabilitation. A skilled nursing facility may be appropriate if the patient does not have a complex condition or requires only basic rehabilitative support.

Examples of Conditions Treated by Inpatient Rehabilitation Facilities

Secondly, there are specific conditions that may indicate that a patient needs medical specialty-specific care. For example:

1. Stroke
2. Nervous system disorder (excluding stroke)
3. Brain disease or condition (non-traumatic)
4. Brain injury (traumatic)
5. Spinal cord disease or condition (non-traumatic)
6. Spinal cord injury (traumatic)
7. Hip or femur fracture
8. Hip or knee replacement, amputation, or other bone or joint condition

Medicare Coverage Determinations

Equally important, there are over ninety (90) Medicare Local Coverage determinations that pertain to the new ICD-10 diagnosis coding standard. To explain, these policies (sometimes called Local Coverage Determinations or LCDs) apply to various patient conditions in different Medicare Administrative Contractor jurisdictions and services, including but not limited to:

1. Cardiac rehabilitation
2. Cognitive rehabilitation
3. Nerve conduction rehabilitation
4. Low vision
5. Speech pathology
6. Nerve blocks
7. Pulmonary stress testing
8. Wound care rehabilitation
9. Respiratory rehabilitation
10. Lung volume reduction
11. Biofeedback
12. Vestibular and audiologic
13. Psychiatric
14. Lower limb prosthesis
15. Occupational therapy
16. Physical therapy
17. Home health therapy
18. Swallowing studies
19. Barium swallow studies
20. Verteoblasty[i] / Kyphoplasty[ii]
21. Dysphasia
22. Ophthalmic
23. Somatosensory
24. Infrared coagulation of hemorrhoids
25. Pelvic floor dysfunction
26. Lumbar spinal fusion

Medicare Facility and Conditions of Participation

Moreover, to qualify as an IRF for Medicare payment, facilities must meet the Medicare IRF classification criteria.

1. In general, the first criterion is that providers must meet Medicare conditions for participation in acute care hospitals.
2. To explain, also supply a preadmission screening to determine that each prospective patient is likely to benefit significantly from an intensive inpatient rehabilitation program;
3. Provide patients with close medical supervision and rehabilitation nursing. For example, physical therapy and occupational therapy, as well as, as needed, speech-language pathology and psychological (including neuropsychological) services, social services, and orthotic and prosthetic devices.
4. Additionally, IRFs must have a medical director of rehabilitation with training and experience in rehabilitation. The medical director must provide services in the facility full-time for freestanding IRFs or for a minimum of 20 hours per week for hospital-based IRF units.
5. Ensure that a coordinated interdisciplinary team, led by a rehabilitation physician, is used. This must include a team composed of a rehabilitation nurse, a social worker or case manager, and a licensed therapist from each therapy discipline involved in the patient’s treatment.
6. Moreover, the compliance threshold requires that no less than 60 percent of all patients admitted to an IRF have as a primary diagnosis or comorbidity at least 1 of 13 conditions specified by CMS.[iii] The intent of the compliance threshold is to distinguish IRFs from acute care hospitals. If an IRF does not meet the compliance threshold, Medicare pays for all its cases based on the inpatient hospital prospective payment system rather than the IRF PPS (Prospective Payment System).

IRF Quality Measures

To clarify, MedPac tracks measures of inpatient rehabilitation facility quality. These are:

1. risk-adjusted facility discharge to the community,
2. risk-adjusted discharge to skilled nursing facilities (SNFs), and
3. potentially avoidable readmissions to acute care hospitals.
4. measures of change in patients’ motor function and cognition during their IRF stay

Long-term Acute Care Hospital vs. IRFs

Furthermore, long-term Acute Care Hospitals (LTACH) serve patients who still need a high level of complex care. Whereas they do not serve patients who need to stay in the intensive care unit (ICU) or emergency treatment because they have been stabilized or are stable but still require it. See Medicare coverage determinations for specifics.

For example, patients who need LTACH are complex wound or burn care, severe brain injuries, respiratory therapy, or ventilator weaning. Patients who need intravenous medications or fluids or receive their nutrition through a feeding tube require an LTACH.

Importantly, coverage rules are complex; secure an expert in Medicare if you are making important business decisions about IRF coverage.   See Medicare Coverage Determinations for details.

Skilled Nursing Facility (SNFs) vs. IRFs

Moreover, a skilled nursing facility may be indicated for patients who need assistance with managing daily needs. These may include getting dressed and bathed and using the toilet. SNFs provide specific medical care in response to health conditions, injuries, and procedures. In contrast to an IRF, SNFs provide continuing care for patients who are recovering from heart attacks or shock, hip or femur fractures or surgeries, joint replacements, sepsis, and kidney and urinary infections.

In other words, for Medicare coverage in a skilled nursing facility, a beneficiary must commit to receiving one and one-half hours of therapy per day.

Furthermore, coverage rules are complex; see Medicare Coverage Determinations for details.

[i] Vertebroplasty is a procedure in which a special cement is injected into a fractured vertebra — with the goal of relieving your spinal pain and restoring your mobility. It should be known that all people with fractured vertebrae are candidates for the procedure, however.

[ii] Kyphoplasty is a vertebral augmentation surgery that treats fractures in the vertebra. These fractures may occur because of conditions such as osteoporosis or trauma. Vertebroplasty is a similar technique. Both procedures involve injecting acrylic bone cement into the fracture through a hole in the skin.

[iii] The 13 conditions are stroke; spinal cord injury; congenital deformity; amputation; major multiple trauma; hip fracture; brain injury; neurological disorders (e.g., multiple sclerosis and Parkinson’s disease); burns; three arthritis conditions for which appropriate, aggressive, and sustained outpatient therapy has failed; and hip or knee replacement when bilateral, the patient’s body mass index is greater than or equal to 50, or the patient is age 85 or older.

Related topics

• Medicare 2020 Skilled Nursing Facility PPS Final Rule(Opens in a new browser tab)
• Medical billing expert witness
• Usual Customary and Reasonable Cost of Care
• Inpatient Psychiatric Facilities and the Affordable Care Act
• Medicare Local Coverage Determinations