AMRPA Takes Action on Proposed IRF Choice Review Demonstration

Kate Beller, JD, AMRPA Executive Vice President for Government Relations and Policy Development

Jonathan Gold, JD, Director of Government Relations and Regulatory Counsel

In mid-December, AMRPA was concerned to learn of the Centers for Medicare and Medicaid Services (CMS) proposal to implement what it calls the “Review Choice Demonstration for IRF Services.” This five-year demonstration program is aimed at reducing what CMS says are high rates of improper payments and potential fraud in the inpatient rehabilitation facility (IRF) benefit in the Medicare fee-for-service program. As currently proposed, the demonstration would span five years. It would initially begin in Alabama, followed by expansion to Pennsylvania, Texas and California within two years. Beginning in the third year, the demonstration will expand to all providers in Medicare Administrative Contractor (MAC) jurisdictions JJ, JL, JH and JE, which includes 17 additional states and territories.

The demonstration would subject all IRFs in these states and territories to review 100% of their Medicare claims. Providers will have the option of participating in either a 100% pre- or 100% post-claim review of their claims. A provider’s compliance percentage will be calculated every six months based on the outcomes of the reviews. If a provider achieves 90% or higher compliance, it will no longer be subjected to 100% reviews, and instead will only be subject to review of a small sampling of claims.

According to CMS, those participating in the pre-claim review option will need to submit a pre-admissions screening, an individualized overall plan of care, and several other pieces of information about the patient. MACs will need to return a decision on the claim within five business days. However, CMS states that the provider need not wait to accept or begin treating the patient prior to receiving a determination. If the MAC requires additional information to reach an affirmative decision, it can request that from the hospital, and then return a subsequent decision within 10 business days. If a preclaim request is denied, but a claim is still submitted, that claim will be automatically denied but the provider may then appeal the denial following the usual appeals process.

Under the post-claim review option, providers will follow the usual process for submitting claims for Medicare beneficiaries. At six-month intervals, MACs will send additional documentation requests for 100% of all claims submitted by the provider to conduct a review of those claims. According to CMS, these reviews will follow the same process typically required of post-claim audits by CMS contractors. Providers can then also follow the usual process for appealing any denied claims on a post-claim basis.

CMS estimates the cost to IRFs will be $3,144,909 in the third year of the demonstration when it has been fully expanded to all participating jurisdictions. This calculation is based upon an hourly wage of $17.13, a “fully loaded” cost of $34.26/hour, an average

of 30 minutes per claim, and several ancillary costs. In addition, CMS estimates it will cost the agency $114 million over five years to implement and manage this demonstration. CMS has not stated any definite timeline for beginning the demonstration. The first comment period for this proposed demonstration closed on February 16, 2021, but CMS has indicated there will be at least on additional public comment period.

In response to this initial comment period, AMRPA worked with members to compile an extensive response to the proposal, which is available on the AMRPA website. AMRPA emphasized the disruption of care that such a far-reaching demonstration would have for patients and the untenable position for hospitals. AMRPA urged CMS to rescind the proposed demonstration. AMRPA also argued in the alternative that if CMS did not fully withdraw the proposal, it must overhaul the current design, and implement numerous changes and safeguards. Among just some of those changes, AMRPA insisted that CMS:

• Delay the start of the demonstration until an appropriate period (e.g., two years) after the COVID-19 Public Health

Emergency has concluded. • Vastly accelerate the timeframe for pre-claim reviews to ensure an immediate response from MACs on claim requests. • Implement appropriate reviewer qualification standards.

• Significantly limit the scope of the audits to fewer IRFs and to a far lower percentage of overall claims to be reviewed. • Implement an accelerated appeals timeframe for providers to appeal any denied claims. • Require robust transparency from MACs on denied claims and rationale behind claim determinations.

AMRPA plans on continuing its efforts regarding this demonstration and making it a top policy priority. If you or your hospital wishes to be involved in these ongoing efforts, do not hesitate to reach out to AMRPA staff.

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