Medicare Program Integrity Manual 
Chapter 6 - Medicare Contractor Medical Review 
Guidelines for Specific Services 
 
Table of Contents  
(Rev. 10365, 10-02-20) 
 
Transmittals for Chapter 6 
 
6.1 - Medical Review of Skilled Nursing Facility Prospective Payment System (SNF 
PPS) Claims 
6.1.1 - Skilled Nursing Facility Qualifying Inpatient Stay 
6.1.2 - Types of SNF PPS Review 
6.1.3 - Claim Review Requirements 
6.1.4 - Medical Review Process 
6.1.5 - Workload 
6.2  Medical Review of Home Health Services 
6.2.1 - Physician Certification of Patient Eligibility for the Medicare Home Health 
Benefit 
6.2.1.1 - Certification Requirements 
6.2.2 - Physician Recertification 
6.2.2.1 - Recertification Elements 
6.2.3 - The Use of the Patients Medical Record Documentation to Support the 
Home Health Certification 
6.2.4 - Coding 
6.2.5 - Medical Necessity of Services Provided 
6.2.6 - Examples of Sufficient Documentation Incorporated Into a Physicians 
Medical Record 
6.2.7 - Medical Review of Home Health Demand Bills 
6.3  Medical Review of Certification and Recertification of Residents in SNFs 
6.4  Medical Review of Rural Air Ambulance Services 
6.4.1  Reasonable Requests 
6.4.2  Emergency Medical Services (EMS) Protocols 
6.4.3  Prohibited Air Ambulance Relationships 
6.4.4  Reasonable and Necessary Services 
6.4.5  Definition of Rural Air Ambulance Services 
6.5  Medical Review of Inpatient Hospital Claims for Part A Payment 
6.5.1  Screening Instruments 
6.5.2  Conducting Patient Status Reviews of Claims for Medicare Part A 
Payment for Inpatient Hospital Admissions   6.5.3  DRG Validation Review 
6.5.4  Review of Procedures Affecting the DRG 
6.5.5  Special Review Considerations 
6.5.6  Length-of-Stay Review 
6.5.7  Reserved for Future Use 
6.5.8  Reserved for Future Use 
6.5.9  Circumvention of PPS 
6.6 - Referrals to the Quality Improvement Organization (QIO) 
6.7 - Medical Review of Inpatient Rehabilitation Facility (IRF) Services 
6.7.1  Reviewing for Intensive Level of Rehabilitation Therapy Services 
Requirements 
6.8 - Medical Review of Evaluation and Management (E/M) Documentation  
6.8.1  Medical Review of E/M Documentation Provided by Student 
6.9  Medical Review of Diagnostic Tests 
6.9.1  Medical Review of Diagnostic Laboratory Tests 
    6.1  Medical Review of Skilled Nursing Facility Prospective Payment 
System (SNF PPS) Claims  
(Rev. 924; Issued: 11-15-19; Effective: 10-01-19; Implementation: 12-17-19) 
 
In 1998, Medicare began paying skilled nursing facilities (SNFs) under a Prospective 
Payment System (PPS). PPS payments are per diem rates based on the patients 
condition and determined through a CMS prescribed case-mix model and payment 
classification system. This classification is done by the use of a clinical assessment tool, 
the Minimum Data Set (MDS), and is required to be performed periodically according 
to an established schedule for purposes of Medicare payment. Each MDS represents the 
patients clinical status based on an Assessment Reference Date (ARD) and established 
look-back periods for the covered days associated with that MDS. Medicare expects to 
pay at the rate based on the most recent clinical assessment (i.e., MDS), for all covered 
days associated with that MDS. Medical review decisions are based on documentation 
provided to support the coding and medical necessity of services recorded on the MDS 
for the claim period billed. Medicare contractors focus on the unique, individualized 
needs, characteristics and goals of each patient, in conjunction with CMS payment 
policies, to determine the appropriateness of the case-mix classifier billed. 
 
All Medicare contractors are to review, in accordance with their medical review 
strategies, SNF PPS services covered by the consolidated billing policy.  SNF services 
excluded from consolidated billing are identified in 4432(a) of the BBA and regular 
updates which can be accessed by contractors at: 
http://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/index.html.  
 
Rules of thumb in the Medical Review (MR) process are prohibited. Medicare 
contractors must not make denial decisions solely on the reviewers general inferences 
about beneficiaries with similar diagnoses or on general data related to utilization. Any 
"rules of thumb" that would declare a claim not covered solely on the basis of elements, 
including but not limited to, lack of restoration potential, ability to walk a certain 
number of feet, or degree of stability, is unacceptable without individual review of all 
pertinent facts to determine if coverage may be justified. Medical denial decisions must 
be based on a detailed and thorough analysis of the beneficiarys total condition and 
individual need for care. 
 
The goal of medical review is to determine whether the services are reasonable and 
necessary, delivered in the appropriate setting, and coded correctly, based on appropriate 
documentation. Under PPS, beneficiaries must continue to meet the regular eligibility 
requirements for a SNF stay as described in Pub. 100-02, Medicare Benefit Policy 
Manual, chapter 8, 20ff, such as the 3-day medically necessary hospital stay and 
admission to a participating SNF within a specified time period (generally 30 days) after 
discharge from the hospital. 
 
 
 
    6.1.1 - Skilled Nursing Facility Qualifying Inpatient Stay 
(Rev. 924; Issued: 11-15-19; Effective: 10-01-19; Implementation: 12-17-19) 
 
Under the SNF PPS, beneficiaries who are admitted (or readmitted) directly to a SNF 
after a qualifying hospital stay are presumed to meet the level of care requirements of 
42 CFR 409.31 up to and including the assessment reference date (ARD) for the initial 
Medicare assessment (commonly referred to as the 5-day assessment) prescribed in 
42 CFR 413.343(b), when correctly assigned to one of the more intensive case-mix 
classifiers that is designated (in the annual publication of Federal prospective payment 
rates described in 42 CFR 413.345) as representing the required level of care. If the 
beneficiary is not admitted (or readmitted) directly to a SNF after a qualifying hospital 
stay, the administrative level of care presumption does not apply. For a further 
explanation of the administrative presumption of coverage, please refer to 6.1.4 of 
this chapter, and to Pub. 100-02, Medicare Benefit Policy Manual, chapter 8, 30.1 
(including item 3 of that section for a discussion of a rehospitalization that exceeds the 
3-day interruption window specified under the SNF PPSs interrupted stay policy). 
 
Medicare contractors shall: 
 
  Use the Common Working File (CWF) to validate the presence of an inpatient 
hospital claim that was paid by Medicare. Because the entire medical record 
from the inpatient hospital stay is not received for a SNF claim, it is difficult to 
determine if the medical record and the CWF conflict. Therefore, it is assumed 
that the dates of service for the inpatient hospital claim in CWF are correct for 
purposes of establishing the 3-day prior inpatient hospital claim dates.  If the 
CWF is silent as to an associated 3-day inpatient hospital claim, confirm that 
the beneficiary had a 3-day inpatient hospitalization outside the Medicare 
system (for example, the Veterans Administration hospital system).  If such is 
the case, the medical record from the inpatient hospitalization can be used to establish 
inpatient hospitalization dates.  This documentation need not be signed for this 
purpose. 
 
  Presume medical necessity of the qualifying inpatient hospitalization. If, 
during the normal claims review process, evidence that the hospitalization 
may not have been medically necessary emerges, the Medicare contractors 
shall fully develop the case in accordance with the directions contained in 
Pub. 100-02, chapter 8,  20 and 20.1. 
 
  Verify that the extended care services were for an ongoing condition that was 
also present during the prior hospital stay (even if not the main reason for that 
stay), or for a new condition that arose while the beneficiary was receiving 
treatment in the SNF for the ongoing condition. In this context, the ongoing 
condition need not have been the principal diagnosis that actually precipitated 
the beneficiarys admission to the hospital, but could be any one of the 
conditions present during the qualifying hospital stay. The Medicare 
contractors may use a hospital discharge summary or any additional  documentation from the inpatient hospital to make this verification.  This 
documentation need not be signed for this purpose. 
 
 6.1.2 - Types of SNF PPS Review 
  (Rev. 924; Issued: 11-15-19; Effective: 10-01-19; Implementation: 12-17-19)   
 
A.  Targeted Probe and Educate Medical Review 
 
 Medicare Administrative Contractors (MACs) shall follow the instructions described in            
Chapter 3 of     Pub. 100-08, the Medicare Program Integrity Manual, when conducting 
medical review.  
 
B.  Demand Bills 
 
MACs must conduct MR of all patient-generated demand bills with the following 
exception: 
 
Demand bills for services to beneficiaries who are not entitled to Medicare or do 
not meet eligibility requirements for payment of SNF benefits (i.e., no qualifying 
hospital stay) do not require MR. A denial notice with the appropriate reasons 
for denial must be sent. 
 
Demand bills are bills submitted by the SNF at the beneficiarys request because the 
beneficiary disputes the providers opinion that the bill will not be paid by Medicare and 
requests that the bill be submitted for a payment determination. The demand bill is 
identified by the presence of a condition code 20. The SNF must have the proper 
liability notice consistent with Section 1879 of the Social Security Act signed by the 
beneficiary unless the beneficiary is deceased or incapable of signing. In this case, the 
beneficiarys guardian, relative, or other authorized representative may make the request 
(see 42 CFR 424.36, Signature requirements). In the case where all covered services are 
being terminated, the SNF provider is also required to have issued an expedited 
determinations notice, as detailed in Pub. 100-04, Medicare Claims Processing Manual, 
chapter 30, section 260, and on the CMS website at 
https://www.cms.gov/Medicare/Medicare-General-Information/BNI/FFS-Expedited-
Determination-Notices.html. 
 
When determining eligibility for Medicare coverage, the MAC shall review the demand 
bill and the medical record to determine that both technical and clinical criteria are met. If 
all technical and clinical criteria are met, and the reviewer determines that some or all 
services provided were reasonable and necessary, use the MDS QC System Software, as 
necessary, to determine the appropriate case-mix classifier. Further instruction on the use 
of this software for adjustment of SNF claims is found in section 6.1.3 below. If the 
reviewer determines that no services provided were medically necessary, the MAC shall 
deny the claim in full. 
 
The Health Insurance Prospective Payment System (HIPPS) code and revenue code  0022 must be present on the demand bill. There may be cases where the MAC receives 
a demand bill for which no associated MDS (or other required Medicare assessment) 
was transmitted to the repository because the provider did not feel that the services 
were appropriate for Medicare payment. In these cases, if the Medicare contractor 
determines that coverage criteria are met (see  6.1.4 B.), and medically necessary 
skilled services were provided, the Medicare contractor shall pay the claim at the 
default rate for the period of covered care for which there is no associated MDS in the 
repository.  
 
C.  Claims Submitted for Medicare Denial Notices 
 
Providers may submit claims for a denial from Medicare for Medicaid or another insurer 
that requires a Medicare denial notice. These claims are identified by condition code 21. 
The SNF is required to issue a notice of noncoverage to the beneficiary that includes the 
specific reasons the services were determined to be noncovered. A copy of this notice 
must be maintained on file by the SNF in case the Medicare contractor requests a copy 
of the notice. See Pub. 100-04, Medicare Claims Processing Manual, chapter 1, 60.1.3 
for further details. 
 
6.1.3 - Bill Review Requirements 
(Rev. 924; Issued: 11-15-19; Effective: 10-01-19; Implementation: 12-17-19) 
 
Medicare contractors must conduct review of SNF PPS claims in accordance with 
these instructions and all applicable Pub. 100-08, Medicare Program Integrity Manual 
sections, including but not limited to, Medicare contractor standard operating 
procedures for soliciting additional documentation, time limitations for receipt of the 
solicited documentation, claim adjudication, and recoupment of overpayment. 
Minimum requirements of a valid SNF PPS claim are: 
 
  Revenue Code 0022 must be on the claim. This is the code that designates 
SNF PPS billing. 
 
  A HIPPS code must also be on the claim. This is a five-character code. The first 
character represents the patients physical therapy (PT) component and 
occupational therapy (OT) component classification. The second character 
represents the patients speech-language pathology (SLP) component 
classification. The third character represents the patients nursing component 
classification. The fourth character represents the patients non-therapy ancillary 
(NTA) component classification. The fifth character represents the assessment 
indicator (AI) code. See Pub. 100-04, chapter 6, 30.1 for valid codes and 
assessment indicators. 
 
6.1.4 - Medical Review Process 
(Rev. 924, Issued: 11-15-19; Effective: 10-01-19; Implementation: 12-17-19) 
 
A.  Obtain Medical Records and MDS  Medicare contractors shall obtain documentation necessary to make a MR 
determination. Medical records must be requested from the provider and the MDS data 
must be obtained from the national repository. Medicare contractors are to use the 
MDS as part of the medical documentation used to determine whether the HIPPS codes 
billed were accurate and appropriate. Medicare contractors shall use the QIES (Quality 
Improvement & Evaluation System) Business Intelligence Center (QBIC) Fiscal 
Intermediary (FI) Extract Reports to obtain the MDS data from the National Reporting 
repository.  
 
Additional information about the use of the FI Extract Reports can be found in the 
QBIC User's Guide.  
 
Information (QBIC documentation & training) can be found at https://qtso.cms.gov. 
(Search for QBIC when accessing the webpage.) Once the clinical reviewer has 
utilized the FI Extract Reports to obtain the MDS(es) corresponding to the period being 
reviewed, the reviewer will import the MDS data into the MDS QC Software System 
to convert it into a readable format to be used, in conjunction with review of the 
medical record, for the adjustment of the SNF claim. 
 
Once the clinical reviewer has used the FI Extract Tool to obtain the MDS 
corresponding to the period being reviewed, the reviewer will import the MDS QC 
Software System to convert it into a readable format to be used, in conjunction with 
review of the medical record for the adjustment of the SNF claim. The MDS QC 
System Software and Reference Manual can be requested at 
MDSQC@nerdvana.fu.com. The MDS QC Tool contractor will contact CMS for 
approval of the request prior to sending out the MDS QC System Software and 
Reference Manual by FedEx. 
 
Medicare contractors shall also request documentation to support the HIPPS code(s) 
billed, including notes related to the ARD, documentation relating to the look-back 
periods which may fall outside the billing period under review, and documentation 
related to the claim period billed. Since the ARD for each MDS marks the end of the 
look-back period (which may extend back 30 days), the Medicare contractor must be 
sure to obtain supporting documentation for up to 30 days prior to the ARD if 
applicable. The requested documentation may include hospital discharge summaries 
and transfer forms; physician orders and progress notes; patient care plans; nursing and 
rehabilitation therapy notes; and treatment and flow charts and vital sign records, 
weight charts and medication records. 
 
Clinical documentation that supports medical necessity may be expected to include: 
physician orders for care and treatments, medical diagnoses, rehabilitation diagnosis 
(as appropriate), past medical history, progress notes that describe the beneficiarys 
response to treatments and his/her physical/mental status, lab and other test results, and 
other documentation supporting the beneficiarys need for the skilled services being 
provided in the SNF. 
  During the review process, if the provider fails to respond to a Medicare contractors 
Additional Documentation Request (ADR) within the prescribed time frame, the 
Medicare contractor shall deny the claim. See Pub. 100-08, Medicare Program 
Integrity Manual, chapter 3, section 3.2.3.8 for information on denials based on non-
response to 
ADRs and section 3.2.3.9 for handling of late documentation. If the provider furnishes 
documentation that is incomplete/insufficient to support medical necessity, adjust the 
bill in accordance with 1862(a)(1)(A) of the Act. 
 
B.  Make a Coverage Determination 
 
For all selected claims, the Medicare contractor shall review medical 
documentation and determine whether the following criteria are met, in order to 
make a payment determination: 
 
  The services must not be statutorily excluded--Determine whether the services 
are excluded from coverage under any provision in 1862(a) of the Act other 
than 
1862(a)(1)(A). 
 
  MDS must have been transmitted to the state repository - The Medicare 
contractor shall require that the provider submit the claim with the case-mix 
classifiers obtained from the Grouper software, as instructed in Pub. 100-04, 
Medicare Claims Processing Manual, chapter 6,  30.1. Claims for which 
MDSs have not been transmitted to the repository should therefore not be 
submitted to Medicare for payment, and shall be denied. An exception to that 
instruction occurs in the case where the beneficiary is discharged or dies on or 
before day 8 of the SNF admission or readmission, as described in Chapter 2 of 
the MDS 3.0 RAI manual. In that specific case, Medicare contractors shall pay 
claims at the default rate, provided that level of care criteria were met and 
skilled services were provided and were reasonable and necessary. In all other 
cases, the Medicare contractor shall deny any claim for which the associated 
MDS is not in the repository. 
 
  SNF must have complied with the assessment schedule - In accordance with 
42 CFR 413.343, in those instances when the assessment is not completed 
timely, the contractor shall pay at the default rate for any days of care prior to 
the assessment reference date of the required assessment.  
 
  The Interim Payment Assessment (IPA) is an optional assessment that 
providers may complete to report a change in the patients classification. If an 
IPA has been completed, medical reviewer will examine the medical 
documentation as described in this section. 
 
  Services are Reasonable and Necessary--Determine whether the services are 
reasonable and necessary under 1862(a)(1)(A) of the Act. When making  reasonable and necessary determinations, contractors shall determine whether 
the services indicated on the MDS were rendered and were reasonable and 
necessary for the beneficiarys condition as reflected by medical record 
documentation. If the reviewer determines that none of the services provided 
were reasonable and necessary or that none of the services billed were 
supported by the medical record as having been provided, the Medicare 
contractor shall deny the claim in full. 
 
  Level of care requirement must be met--Determine whether the services met 
the requirements according to 42 CFR 409.31. 
 
  Under PPS, the beneficiary must meet level of care requirements as defined 
-
in 42 CFR 409.31. The SNF PPS includes an administrative presumption 
in which a beneficiary who is correctly assigned one of the designated case-
mix classifiers on the initial Medicare (5-day) PPS assessment is 
presumed to meet the SNF level of care through the assessment reference 
date (ARD). This effectively creates a presumption of coverage for the 
period from the first day of the Medicare covered services up to, and 
including, the ARD for that assessment, which must be set for no later than 
the eighth day of the SNF stay.  The 5-day assessment may trigger a 
presumption of coverage only when the SNF admission directly follows 
discharge from a prior qualifying hospital stay.  See Pub. 100-02, Medicare 
Benefit Policy Manual, chapter 8, 30.1 for further explanation of the 
administrative presumption of coverage.  
 
  In the case described above, where the administrative presumption of 
-
coverage exists, Medicare contractors shall review the claim and supporting 
medical information specifically to confirm the correctness of the case-mix 
classifier assignment that triggered the presumption. To determine if the 
beneficiary was correctly assigned to a case-mix classifier, Medicare 
contractors shall verify that the billed case-mix classifier is supported by the 
associated provider documentation. Medicare contractors shall consider all 
available information in determining coverage. This includes the MDS, the 
medical records including physician, nursing, and therapy documentation, 
and the beneficiarys billing history. 
 
  A beneficiary who is not assigned one of the case-mix classifiers designated 
-
as representing the required level of care on the 5-day assessment 
prescribed in 42 CFR 413.343(b) IS NOT automatically classified as either 
meeting or not meeting the SNF level of care definition. Instead, the 
beneficiary must receive an individual level of care determination using 
existing administrative criteria and procedures, so documentation must 
support that these beneficiaries meet the level of care requirements.  
 
  For days after the assessment reference date of the 5-day assessment, 
-
determination of the continued need for, and receipt of, a skilled level of  care will be based on the beneficiarys clinical status and skilled care 
needs for the dates of service under review. 
 
-  The level of care requirement includes the requirement that the beneficiary 
must require skilled nursing or skilled rehabilitation services, or both on a 
daily basis. Criteria and examples of skilled nursing and rehabilitation 
services, including overall management and evaluation of the care plan and 
observation of a patients changing condition, may be found at 42 CFR 
409.32 and 409.33. 
 
-  An apparent interruption in daily skilled services should not be 
interpreted to signal an end to daily skilled care. Rather, consideration 
should be given to the provision of observation and assessment and 
management and evaluation of the care plan during the review of 
medical records. 
 
C.  Review Documentation and Enter Correct Data into the MDS QC Software 
When Appropriate. 
 
If the reviewer determines that coverage criteria are met and services are not 
statutorily excluded, but some services provided were not reasonable and necessary 
or were not supported in the medical record as having been provided as billed, the 
current MDS QC System Software must be used to calculate appropriate payment. 
Medicare contractors shall pay claims according to the case-mix classifier value 
calculated using the MDS QC tool, regardless of whether it is higher or lower than 
the case-mix classifier billed by the provider. If none of the services provided were 
reasonable and necessary, the Medicare contractor shall deny the claim in full. 
 
Medicare contractors shall use the most current version of MDS QC System Software 
to review and calculate appropriate payment for SNF claims. The medical reviewer 
will examine the medical documentation to make a determination as to whether it 
supports the data entered into the MDS assessment completed by the provider and 
extracted from the repository. If a discrepancy is noted, the reviewer shall enter the 
correct data reflected in the medical record, according to the instructions in the MDS 
QC System Software Reference Manual. The reviewer shall consider all available 
medical record documentation in entering data into the software. This includes 
physician, nursing, and therapy documentation, and the beneficiarys billing history. 
Review of the claim form alone does not provide sufficient information to make an 
accurate payment determination. 
 
D.  Outcome of Medical Record Review  
The Medicare contractor shall take action to pay the claim appropriately, for the days on 
which the SNF was in compliance with the assessment schedule (pay the default rate for 
the days on which the SNF provided covered care, but was not in compliance with the 
assessment schedule), as described in each of the following situations   
Services are Reasonable and Necessary as Documented on the MDS Submitted to the 
Repository:  
 
  If no discrepancies are noted between the MDS submitted to the repository and the 
patients medical record, during the relevant assessment period for the timeframe 
being billed, the Medicare contractor shall verify that the case-mix classifier 
submitted on the claim matches the case-mix classifier on the MDS imported from 
the repository into the MDS QC tool, and: 
 
  If the facility case-mix classifier obtained through the MDS QC tool matches 
o
the case-mix classifier submitted on the claim, the Medicare contractor shall 
pay the claim as billed for all covered days associated with that MDS, even if 
the level of therapy changed during the payment period. 
 
  If the facility case-mix classifier obtained through the MDS QC tool DOES 
o
NOT match the case-mix classifier submitted on the claim, the Medicare 
contractor shall pay the claim at the appropriate level based on the case-mix 
classifier level on the MDS submitted to the repository (and subsequently 
obtained through the MDS QC tool) for all covered days associated with that 
MDS, even if the services provided changed during the payment period. 
 
Some Services are Reasonable and Necessary but Not Supported as Billed in Patient Medical 
Record: 
 
  If some skilled services were appropriate, but some services provided were not 
reasonable and necessary or were not supported by the medical record as having been 
provided as billed, and the reviewer determines (based on data entered from the 
medical record into the MDS QC System Software) that: 
 
  The discrepancies are such that they do not result in a change in the case-mix 
o
classification level as calculated by the MDS QC tool, during the relevant 
assessment period for the timeframe being billed, the Medicare contractor 
shall accept the claim as billed for all covered days associated with that MDS, 
even if the level of skilled care changed during the payment period. 
 
  There is another case-mix classifier for which the beneficiary qualifies, the 
o
Medicare contractor shall pay the claim according to the correct case-mix 
classifier calculated using the MDS QC System Software for all covered days 
associated with that MDS, and recoup any overpayments as necessary. 
 
Need For Skilled Care Ends: 
 
  If the reviewer determines that the beneficiary falls to a non-skilled level of care at 
some point during the period under review, the Medicare contractor shall deny the 
claim from the date on which the beneficiary no longer meets level of care criteria. 
  General Information for All HIPPS Codes 
 
  No Skilled Care Needed or Provided--If the reviewer determines that none 
-
of the services furnished were reasonable and necessary and that no skilled 
care is needed or provided, the Medicare contractor shall deny the claim 
from the date that skilled care ended.
 
 
  Services Billed But Not Furnished--If the reviewer determines that any of 
-
the services billed were not furnished, deny the claim in part or full and, if 
applicable, the Medicare contractor shall apply the fraud and abuse 
guidelines in Pub 100-08, Medicare Program Integrity Manual, chapter 4.
 
 
A partial denial is defined as either the disallowance of specific days within the stay 
or reclassification into a lower case-mix classifier. 
 
For any full or partial denials made, adjust the claim accordingly to recoup the 
overpayment. A partial denial based on classification into a new case-mix 
classification code or a full denial because the level of care requirement was not met 
are considered reasonable and necessary denials (1862(a)(1)(A)) and are subject to 
appeal rights. 
 
It is important to recognize the possibility that the necessity of some services could be 
questioned and yet not impact the case-mix classification. The case-mix classification 
may not change because there are many clinical conditions and treatment regimens that 
qualify the beneficiary for the case-mix classifier to which he or she was assigned.   
 
When reviewing bills, if the reviewer suspects fraudulent behavior, e.g., a pattern of 
intentional reporting of inaccurate information for the purpose of payment or the 
billing for services which were not furnished or quality of care concerns, it is the 
Medicare contractors responsibility to refer the provider to the appropriate entity for 
further investigation. 
 
6.1.5 - Workload 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
All Medicare contractors must review some level of SNF PPS bills based on data 
analysis.  These are medical record reviews and should be reviewed by professionals, i.e., 
at a minimum, by LPNs. Workload projections are to be addressed through the annual 
Budget Performance Requirements process. 
 
6.2 - Medical Review of Home Health Services 
(Rev. 10184; Issued: 06-19-2020; Effective: 07-21-2020; Implementation: 07-21-
2020) 
 
This section applies to Unified Program Integrity Contractors (UPIC), Medicare 
Administrative Contractors (MAC), Supplemental Medical Review Contractor (SMRC),  Recovery Audit Contractors (RAC) and the Comprehensive Error Rate Testing (CERT) 
contractor. 
 
6.2.1 - Physician Certification of Patient Eligibility for the Medicare 
Home Health Benefit 
(Rev.603, Issued: 07-21-15, Effective: 08-11-15, Implementation: 08-11-15) 
 
A physician certification/recertification of patient eligibility for the Medicare home 
health benefit is a condition for Medicare payment per sections 1814(a) and 1835(a) of 
the Social Security Act (the Act).  The regulations at 42 CFR 424.22 list the 
requirements for eligibility certification and recertification.  The requirements differ for 
eligibility certification and recertification; however, if the requirements for certification 
are not met, then claims for subsequent episodes of care, which require a recertification, 
will be non-coveredeven if the requirements for recertification are met. 
 
Home health agencies (HHAs) should obtain as much documentation from the certifying 
physicians medical records and/or the acute/post-acute care facilitys medical records (if 
the patient was directly admitted to home health) as they deem necessary to assure 
themselves that the Medicare home health patient eligibility criteria for certification and 
recertification have been met and must be able to provide it to CMS and its review 
entities upon request.  Per the regulations at 42 CFR 424.22(c), if the documentation used 
as the basis for the certification of eligibility is not sufficient to demonstrate that the 
patient is or was eligible to receive services under the Medicare home health benefit, 
payment will not be rendered for home health services provided. 
 
Therefore, for all medical necessity reviews, the Medicare review contractors shall 
review the certification documentation for any episode initiated with the completion of a 
start-of-care Outcome and Assessment Information Set (OASIS) assessment.  This means 
that if the subject claim is for a subsequent episode of care, the HHA must submit all 
certification documentation as well as recertification documentation.  The review 
contractor shall send a documentation request to the billing HHA requesting the 
supporting documentation from the certifying physician and/or the acute/post-acute care 
facility if the patient was directly admitted to home health from such setting (as defined 
in 42 CFR 424.22) that substantiates the patients eligibility for the Medicare home health 
benefit. 
 
For medical review purposes, the referring /certifying physicians initial order for home 
health services for a patient initiates the establishment of a plan of care as part of the 
certification of patient eligibility for the Medicare home health benefit.  The physicians 
initial order must specify the medical treatment(s) to be furnished and does not eliminate 
the need for the plan of care as required in 42 CFR 409.43. 
 
If the review contractor finds that the documentation in the certifying physicians medical 
record for that patient used as the basis for the certification of eligibility, which includes 
subsequent supporting documentation from the HHA (if incorporated into the certifying 
physicians or acute/post-acute care facilitys medical record for that patient), is  insufficient to demonstrate the patient is or was eligible to receive services under the 
Medicare home health benefit, the review contractor shall deny payment (in the case of 
prepayment review) or shall initiate an overpayment demand letter (in the case of post 
payment review). 
 
The review contractor shall only consider a plan of care and the certification or 
recertification for home health services from physicians who do not have a financial 
relationship with the HHA.  The review contractor shall only consider documentation of 
the face-to-face encounter from physicians or allowed non-physician practitioners, as 
defined in 42 CFR 424.22, who do not have a financial relationship with the HHA (see 
6.2.3). 
 
CMS does not require a specific form or format for the certification as long as a physician 
certifies that the five certification requirements, outlined in 42 CFR 424.22(a)(1) and 
section 6.2.1.1, are met. 
 
6.2.1.1  Certification Requirements 
(Rev. 704, Issued: 03-17-17, Effective: 04-17-17, Implementation: 04-17-17)  
 
When conducting a medical necessity review, the review contractor shall determine whether 
the supporting documentation addresses each of the following criteria for which a physician 
certified (attested to):  
 
1.  Homebound. Home health services are or were required because the individual is or 
was confined to the home per the criteria below (as defined in sections 1835(a) and 
1814(a) of the Social Security Act). 
 
a.  Criteria-One: 
 
The patient must-- 
 
-  Because of illness or injury, need the aid of supportive devices such as 
crutches, canes, wheelchairs, and walkers; the use of special transportation; or the 
assistance of another person in order to leave their place of residence 
 
OR 
 
-  Have a condition such that leaving his or her home is medically 
contraindicated. 
 
If the patient meets one of the Criteria-One conditions, then the patient must ALSO 
meet two additional requirements defined in Criteria-Two below. 
 
b.  Criteria-Two: 
 
-  There must exist a normal inability to leave home; 
 
AND   
-  Leaving home must require a considerable and taxing effort. 
 
In determining whether the patient meets criterion two of the homebound definition, 
the clinician needs to take into account the illness or injury for which the patient met 
criterion one and consider the illness or injury in the context of the patients overall 
condition. The clinician is not required to include standardized phrases reflecting the 
patients condition (e.g., repeating the words taxing effort to leave the home) in the 
patients chart, nor are such phrases sufficient, by themselves, to demonstrate that 
criterion two has been met. For example, longitudinal clinical information about the 
patients health status is typically needed to sufficiently demonstrate a normal 
inability to leave the home and that leaving home requires a considerable and taxing 
effort. Such clinical information about the patients overall health status may include, 
but is not limited to, such factors as the patients diagnosis, duration of the patients 
condition, clinical course (worsening or improvement), prognosis, nature and extent 
of functional limitations, other therapeutic interventions and results, etc. 
 
2.  Skilled Care. The patient needs or needed intermittent skilled nursing care 
(other than solely venipuncture for the purposes of obtaining a blood sample), 
physical therapy, and/or speech language pathology services as defined in 42 
CFR 409.42(c). 
 
NOTE: Where a patients sole skilled service need is for skilled oversight of 
unskilled services (management and evaluation of the care plan as defined in 
42 CFR 409.42(c)), the physician must include a brief narrative describing the 
clinical justification of this need as part of the certification, or as a signed 
addendum to the certification. The physician must sign immediately following 
the narrative. 
 
3.  Plan of Care. A plan for furnishing the services has been established and is, or 
will be, periodically reviewed by a physician who is a doctor of medicine, 
osteopathy, or podiatric medicine (a doctor of podiatric medicine may perform 
only plan of treatment functions that are consistent with the functions he or she 
is authorized to perform under state law). If the physicians orders for home 
health services meet the requirements specified in 42 CFR 409.43 Plan of Care 
Requirements, this meets the requirement for establishing a plan of care as part 
of the certification of patient eligibility for the Medicare home health benefit. 
 
4.  Under Physician Care. Home health services will be or were furnished while 
the individual is or was under the care of a physician who is a doctor of 
medicine, osteopathy, or podiatric medicine. 
 
5.  Face-to-Face Encounter. A face-to-face patient encounter occurred no more 
than 90 days prior to the home health start of care date or within 30 days after 
the start of the home health care, was related to the primary reason the patient 
requires home health services, and was performed by an allowed provider type  defined in 42 CFR 424.22(a)(1)(v). The certifying physician must also 
document the date of the encounter as part of the certification. 
 
While the face-to-face encounter must be related to the primary reason for 
home health services, the patients skilled need and homebound status can be 
substantiated through an examination of all submitted medical record 
documentation from the certifying physician, acute/post-acute care facility, 
and/or HHA (see below). The synthesis of progress notes, diagnostic findings, 
medications, nursing notes, etc., help to create a longitudinal clinical picture of 
the patients health status. 
 
6.2.2  Physician Recertification 
(Rev. 603, Issued: 07-21-15, Effective: 08-11-15, Implementation: 08-11-15) 
 
At the end of the 60-day episode, a decision must be made whether or not to recertify the 
patient for a subsequent 60-day episode.  The plan of care must be reviewed and signed 
by the physician at least every 60 days when there is a need for continuous home care 
unless the beneficiary transfers to another HHA or the beneficiary is discharged and 
subsequently re-admitted (these situations trigger a new certification, rather than a 
recertification). 
 
6.2.2.1  Recertification Elements 
(Rev. 870, Issued: 03-22-19, Effective: 04-22-19, Implementation: 04-22-19) 
 
Recertification is required at least every 60 days when there is a need for continuous 
home health care after an initial 60-day episode.  Recertification should occur at the time 
the plan of care is reviewed, and must be signed and dated by the physician who reviews 
the plan of care.  Recertification is required at least every 60 days unless there is a 
 
(i) Beneficiary elected transfer; or 
(ii) Discharge with goals met and/or no expectation of a return to home health 
care. 
 
Medicare does not limit the number of continuous episode recertifications for 
beneficiaries who continue to be eligible for the home health benefit. The physician 
certification may cover a period less than but not greater than 60 days. Because the 
updated home health plan of care must include the frequency and duration of visits to be 
made, the physician does not have to estimate how much longer skilled services will be 
needed for the recertification.   
 
The recertification statement must indicate the continuing need for services.  Need for 
occupational therapy may be the basis for continuing services that were initiated because 
the individual needed skilled nursing care or physical therapy or speech therapy.  In this 
case reviewers will look for documentation substantiating the need for continued  occupational therapy when the needed skilled nursing care or physical therapy or speech 
therapy that were initially needed, are no longer needed. 
 
If a patients underlying condition or complication requires a registered nurse to ensure 
that essential non-skilled care is achieving its purpose, and necessitates a registered nurse 
be involved in the development, management, and evaluation of a patients care plan, the 
reviewer will look for the physicians brief narrative describing the clinical justification 
of this need.  If the narrative is part of the recertification form, then the narrative must be 
located immediately prior to the physicians signature.  If the narrative exists as an 
addendum to the recertification form, in addition to the physicians signature on the 
recertification form, the physician must sign immediately following the narrative in the 
addendum. 
 
As mentioned earlier in this section, the reviewer will confirm that all elements of the 
certification are included in the documentation sent for the recertification claim review.  
If the submitted certification documentation (submitted with the recertification 
documentation) does not support home health eligibility, the claim associated with the 
recertification period will not be paid. 
 
6.2.3  The Use of the Patients Medical Record Documentation to 
Support the Home Health Certification 
(Rev. 704, Issued: 03-17-17, Effective: 04-17-17, Implementation: 04-17-17)  
 
As mentioned in section 6.2.1.1  Certification Requirements, for home health services to 
be covered by Medicare, the certifying physicians and/or the acute/post-acute care 
facilitys medical record for the patient must contain sufficient documentation of the 
patients medical condition(s) to substantiate eligibility for home health services. The 
information may include, but is not limited to, such factors as the patients diagnosis, 
duration of the patients condition, clinical course (worsening or improvement), 
prognosis, nature and extent of functional limitations, other therapeutic interventions and 
results, etc. 
 
The physicians/acute/post-acute care facilitys medical records can always stand alone 
in substantiating eligibility for home health services.  The physicians/acute/post-acute 
care facilitys record, in conjunction with appropriately incorporated HHA 
documentation (e.g., Form 485/Plan of Care, OASIS, etc.), may also substantiate the 
certification of eligibility for home health services.  The HHAs generated medical 
record documentation for the patient, by itself, is not sufficient in demonstrating the 
patients eligibility for Medicare home health services.  
 
As noted earlier, per 42CFR424.22 (a) and (c) it is the patients medical record held by 
the certifying physician and/or the acute/post-acute care facility that must support the 
patients eligibility for home health services. Therefore, any documentation used to 
support certification that was generated by the home health agency must be signed off 
by the certifying physician and incorporated into the medical record held by the 
physician or the acute/post-acute care facilitys medical record. Any information  provided to the certifying physician by the HHA and incorporated into the patients 
medical record held by the physician or the acute/post-acute care facilitys medical 
record (if the patient was directly admitted to home health) must corroborate the rest of 
the patients medical record. This means that the HHA information, along with the 
certifying physicians and/or the acute/post-acute care facilitys medical record, creates 
a clinically consistent picture that the patient is eligible for Medicare home health 
services. This could include, but is not limited to, the plan of care required per 42 CFR 
409.43, the initial and/or the comprehensive assessment of the patient required per 42 
CFR 484.55, the inpatient discharge summary or multi-disciplinary clinical notes, etc., 
which must correspond to the dates of service being billed and not contradict the 
certifying physicians and/or the acute/post-acute care facilitys own documentation or 
medical record entries. Once incorporated into the certifying physicians medical record 
for the patient, the HHA information can be used to support the patients homebound 
status and need for skilled care, the reviewer shall consider all documentation from the 
HHA that has been signed off in a timely manner and incorporated into the 
physician/hospital record when making its coverage determination. HHA 
documentation that is used to support the home health certification is considered to be 
incorporated timely when it is signed off prior to or at the time of claim submission. 
See section 6.2.6 Examples of Sufficient Documentation Incorporated into a 
Physicians Medical Record. 
 
It is important to apply the review process to the entire patients medical record that is 
received by the reviewer. Doing so assures that the reviewer is establishing that the HHA 
generated medical record documentation corroborates other patient medical records 
received and used to support the patients eligibility for home health services. Therefore, 
the HHA generated documentation does not necessarily need to restate pertinent facts or 
conditions, but instead the HHA generated medical records for the patient should be in 
alignment with and not contradict other patient records. The HHA generated medical 
record for the patient together with other medical records received must lead the reviewer 
to confirm that the patient is eligible for home health services as established in 42 CFR 
424.22(a)(1). 
 
 
 
 
 
6.2.4 - Coding 
(Rev. 603, Issued: 07-21-15, Effective: 08-11-15, Implementation: 08-11-15) 
 
If the patients comprehensive assessment or recertification assessment was signed off 
and incorporated into the certifying physicians medical record for the patient (or the 
acute/post-acute care facilitys medical record if the patient was directly admitted to 
home health), contractors shall use it to determine whether the Home Health Resource 
Group (HHRG) codes billed were accurate and appropriate.  In addition, if the 
comprehensive assessment is incorporated into the certifying physicians record for the 
patient and is used to support that the patient meets the home health eligibility criteria,  then the diagnoses and conditions listed on the start of care assessment must be 
corroborated by information in the certifying physicians and/or the acute/post-acute care 
facilitys own medical record documentation. 
 
The contractor shall use the web regrouping program provided by CMS to recode claims 
as appropriate. 
 
6.2.5 - Medical Necessity of Services Provided 
(Rev. 603, Issued: 07-21-15, Effective: 08-11-15, Implementation: 08-11-15) 
 
In addition to certification and recertification requirement documentation, contractors 
shall also review the medical record documentation to determine whether services 
provided were medically necessary.  Again, home health generated information must be 
reviewed, signed off by the certifying physician and incorporated into the certifying 
physician medical record for the patient or the acute/post-acute care facilitys medical 
record for the patient (if the patient was directly admitted to home health) if used to 
support certification/recertification. 
 
6.2.6 - Examples of Sufficient Documentation Incorporated Into a 
Physicians Medical Record 
(Rev. 603, Issued: 07-21-15, Effective: 08-11-15, Implementation: 08-11-15) 
 
To be eligible for Medicare home health services, a patient must have Medicare Part A 
and/or Part B and, per 1814(a)(2)(C) and 1835(a)(2)(A) of the Act: 
 
  Be confined to the home; 
  Need skilled services;  
  Be under the care of a physician;  
  Receive services under a plan of care established and reviewed by a physician; 
and 
  Have had a face-to-face encounter with a physician or allowed non-physician 
practitioner (NPP). 
 
EXAMPLE 1:   
 
Does the below submitted documentation support the certification statement stating that 
the patient meets the eligibility criteria for home health benefit certification?  Yes. 
 
Records received by the reviewer for a HHA claim for dates of service starting on 
4/15/2015: 
 
1.  Patient was admitted to the hospital with a right-sided femur fracture sustained 
from a fall requiring surgery.  A discharge summary dated April 14, 2015, signed 
by the inpatient attending physician.  Included in the summary was a description 
of the patients injury, DME required, non-weight-bearing status, and the name of 
and appointment date for the community orthopedic physician who would  continue to follow-up with patient, and the notation of the order for home physical 
therapy for home safety evaluation, gait training and strengthening 2-3 times per 
week for 6 weeks to be delivered by an HHA. 
 
Meets requirements for a face-to-face encounter (occurred within the required timeframe, 
was performed by an allowed provider type, and related to the primary reason the patient 
requires home health).  Identifies the need for skilled services and alludes to the fact that 
the patient is most likely homebound because of the non-weight-bearing status and the 
order for DME.  Identifies physician who will be providing care while patient is receiving 
home health services.  Plan of care established with physician orders. 
 
2.  HHA generated comprehensive assessment (admission OASIS) dated 04/15/2015 
along with physical therapy progress notes.  PT progress note documents patient 
is non-weight bearing on right leg and requires use of a two-handed device to 
walk alone on a level surface, and requires assistance to negotiate stairs or steps 
or uneven surfaces.  The HHA assessment with progress notes has been signed by 
the community orthopedic certifying physician. 
 
PT progress note further supports that patient is confined to the home. 
 
3.  The community orthopedic physician-signed certification statement for HH 
services for start of care date of April 15, 2015. 
 
Certification statement signed by certifying physician. 
 
4.  HHA generated plan of care, which specifies the type, frequency and goals for 
therapies.  The plan of care includes the signature of the certifying physician. 
 
Supports that plan of care has been established and reviewed by the certifying 
physician. 
 
EXAMPLE TWO:  
 
Does the below submitted documentation support the certification statement stating that 
the patient meets the eligibility criteria for home health benefit certification?  Yes. 
 
Records received by the reviewer for a HHA claim for dates of service starting on 
February 1, 2015: 
 
1.  Primary care physician progress note dated November 15, 2014.  States reason for 
visit is patient has a non-healing left foot diabetic foot ulcer measuring 1 cm x1 
cm x 0.5 cm.  Patient instructed on wound care with hydroactive gel dressing to 
be changed every 3 days.  Patient able to return demonstrate application of 
dressing without difficulties.  
  Meets requirements for a face-to-face encounter (occurred within the required 
timeframe, was performed by an allowed provider type, and related to the primary 
reason the patient requires home health). 
 
2.  Clinical note in physician record states that patient called primary care physician 
(PCP) on January 30th stating that the wound has gotten larger and there is 
copious purulent drainage causing the dressing to be saturated.  She states she is 
unable to adequately change the dressing and keep it in place because of the size 
of the wound and the amount of drainage.  Patient just recovering from 
pneumonia and she says she is unable to come into the physicians office because 
she cannot drive.  PCP made referral to HHA for skilled nursing services to 
evaluate the wound. 
 
Identifies the need for skilled services. 
 
3.  HHA generated comprehensive assessment (admission OASIS) dated 02/01/2015 
along with skilled nursing notes which includes wound measurements, condition 
of wound, and documentation of physician phone call to report findings and 
receipt of verbal orders for daily wound care for 3 weeks, monitor and teach on 
signs and symptoms of infection and initiation of oral antibiotics twice a day for 
14 days.  Nursing notes also states that the patient is significantly deconditioned, 
as a result of recent pneumonia, requires the use of a walker to ambulate from 
chair to bathroom with frequent stops to rest. 
 
HHA skilled nursing notes further support that patient needs skilled services to initiate 
new wound care regimen, monitor for infection and that the patient is confined to the 
home.  Physicians verbal orders for daily wound care establish the plan of care. 
 
4.  The primary care physician-signed certification statement for HH services for 
start of care date of February 1, 2015. 
 
Certification statement signed by certifying physician. 
 
5.  HHA generated plan of care, which specifies the wound care orders, frequency of 
skilled nursing visits and goals for home health services.  The plan of care 
includes the signature of the certifying physician. 
 
Supports that plan of care has been established and reviewed by the certifying physician. 
 
6.2.7 - Medical Review of Home Health Demand Bills 
(Rev. 721; Issued: 06-09-17; Effective: 07-11-17; Implementation: 07-11-17) 
 
As a result of litigation settlements, A/B MACs (A) must perform medical record reviews 
on 100% of the home health demand bills. 
  6.3  Medical Review of Certification and Recertification of Residents in 
SNFs 
(Rev. 823; Issued: 10-05-18; Effective: 11-06-18; Implementation: 11-06-18) 
 
The Medicare conditions of payment require a physician certification and (when specified) 
recertification for SNF services. This requirement is explicitly stated in 1814(a)(2) of the 
Social Security Act. 42 CFR 424.20 details the required contents of the certification and re-
certifications and 42 CFR 424.11 specifies that "no specific procedures or forms are required 
for certification and recertification statements," and that "the provider may adopt any method 
that permits verification. The certification and recertification statements may be entered on 
forms, notes, or records that the appropriate individual signs, or on a special separate form" 
(emphasis added). Further, 42 CFR  424.11(b) specifies that information contained in other 
provider records, such as physicians progress notes, need not be repeated in the certification 
or recertification statement itself.  Recent decisions by administrative law judges, that CMS 
believes are fully consistent with law and regulations, reinforce the need for MACs to 
consider documentation in the beneficiary's medical record beyond a discrete certification or 
recertification form to determine if the required elements for certification are present.  
 
Contractors shall deny claims for failure to comply with the certification or re-certification 
content requirements in 42 CFR 424.20 and not for the failure to use a separate certification 
form or particular format. 
 
6.4 - Medical Review of Rural Air Ambulance Services 
(Rev. 102, Issued: 02-01-05, Effective: 01-01-05, Implementation: 02-14-05) 
 
6.4.1  Reasonable Requests 
(Rev. 308, Issued: 10-30-09, Effective: 11-30-09, Implementation: 11-30-09) 
 
Rural air ambulance transport shall be considered reasonable and necessary when a 
physician or other qualified medical personnel orders or certifies the air transport service.  
A physician or other qualified medical personnel must certify or determine that the 
individuals condition requires air transport due to time or geographical factors.  The 
following should be considered to be personnel qualified to order air ambulance services: 
 
  Physician,  
  Registered nurse practitioner (from the transferring hospital), 
  Physicians assistant (from transferring hospital), 
  Paramedic or EMT (at the scene), and 
  Trained first responder (at the scene). 
 
6.4.2  Emergency Medical Services (EMS) Protocols 
(Rev. 308, Issued: 10-30-09, Effective: 11-30-09, Implementation: 11-30-09) 
 
Per Section 415 of the Medicare Modernization act of 2003, the reasonable and necessary 
requirement for rural air transport may be deemed to be met when the service is 
provided pursuant to an established State or regional emergency medical services (EMS)  agency protocol. CMS defines established to mean those protocols, which have been 
reviewed and approved by State EMS agencies or have been developed according to 
State EMS umbrella guidelines.  Additionally, the protocol must be recognized or 
approved by the Secretary. 
 
The information on the FI, carrier, or MAC Web site must inform rural air ambulance 
providers that if they anticipate transport based upon the contents of such a protocol 
(either State or regional) they must submit that protocol in advance to the fiscal 
intermediaries, carriers, or MACs for review and approval.  Include instructions on the 
Web site for submitting the protocol. The contractor will review the protocol to ensure 
that the contents are consistent with statutory requirements at 1862(a)(1)(A), which direct 
that all services paid for by Medicare must be reasonable and necessary for the diagnosis 
or treatment of an illness or injury.  The contractor shall make a determination regarding 
the protocol and/or subsequent revisions and notify the rural air ambulance provider of 
their determination within 30 days of receipt of the protocol. 
 
Approval of a protocol does not exempt the provider from requirements in the Act at 
1861(s)(7) and regulatory requirements at 42 CFR 424.106 which outlines the criteria for 
determining whether the hospital was the most accessible.  Regardless of protocol 
instructions regarding transport locations Medicare payment can be made only to the 
closet facility capable of providing the care needed by the beneficiary. 
 
6.4.3  Prohibited Air Ambulance Relationships 
(Rev. 102, Issued: 02-01-05, Effective: 01-01-05, Implementation: 02-14-05) 
 
Do not apply the deemed reasonable and necessary determination if there is a financial 
or employment relationship between the person requesting the air ambulance service and 
the entity furnishing the service; an entity under common ownership with the entity 
furnishing the service; or a financial relationship between an immediate family member 
of the person requesting the service and the entity furnishing the service. Only one 
exception is available for this provision.  When the referring hospital and the entity 
furnishing the air ambulance services are under common ownership, the above limitation 
does not apply to remuneration by the hospital for provider based physician services 
furnished in a hospital, reimbursed under Part A and the amount of the remuneration is 
unrelated directly or indirectly to the provision of air ambulance services. 
 
 
6.4.4  Reasonable and Necessary Services 
(Rev. 308, Issued: 10-30-09, Effective: 11-30-09, Implementation: 11-30-09) 
 
When data analysis indicates, fiscal intermediaries, carriers, or MACs may perform 
medical review of rural air ambulance claims in those instances noted in the above 
paragraph where there is financial or employment relationship between the person 
requesting an air ambulance transport and the person providing the service.  The fiscal 
intermediaries, carriers, or MACs may also conduct medical review of rural air 
ambulance claims with deemed medical necessity status when there are questions as to  whether the transport was made pursuant to a protocol which has been approved by the 
Secretary; or questions as to whether the transport was inconsistent with an approved 
protocol.  Medicare payment can be made only to the closest facility capable of providing 
the care needed by the beneficiary irrespective of whom orders the transport. 
 
6.4.5  Definition of Rural Air Ambulance Services 
(Rev. 102, Issued: 02-01-05, Effective: 01-01-05, Implementation: 02-14-05) 
 
For purposes of this section the term rural air ambulance service means fixed wing and 
rotary wing air ambulance service in which the point of pick up of the individual occurs 
in a rural area (as defined in Section 1886(d)(2)(D)) or in a rural census tract of a 
metropolitan statistical area (as determined under the most recent modification of the 
Goldsmith Modification, originally published in the Federal Register on February 27, 
1992 (57 Fed. Reg. 6725). 
 
6.5 - Medical Review of Inpatient Hospital Claims for Part A Payment 
(Rev. 716, Issued: 05-12-17, Effective: 06-13-17, Implementation: 06-13-17) 
 
6.5.1 - Screening Instruments 
(Rev. 264; Issued:  08-07-08; Effective Date:  08-01-08; Implementation Date:  08-
15-08) 
 
The reviewer shall use a screening tool as part of their medical review of acute IPPS and 
LTCH claims.  CMS does not require that you use a specific criteria set.  In all cases, in 
addition to screening instruments, the reviewer applies his/her own clinical judgment to 
make a medical review determination based on the documentation in the medical record. 
 
The following shall be utilized as applicable, for each case: 
 
  Admission criteria; 
 
  Invasive procedure criteria; 
 
  CMS coverage guidelines; 
 
  Published CMS criteria  
 
  DRG validation guidelines; 
 
  Coding guidelines; and 
 
  Other screens, criteria, and guidelines (e.g., practice guidelines that are well 
accepted by the medical community)  
 
Contractors shall consult with physician or other specialists if necessary to make an 
informed medical review determination.   
6.5.2 - Conducting Patient Status Reviews of Claims for Medicare Part 
A Payment for Inpatient Hospital Admissions 
(Rev. 10184; Issued: 06-19-2020; Effective: 07-21-2020; Implementation: 07-21-
2020) 
 
This section applies to Unified Program Integrity Contractors (UPIC), Medicare 
Administrative Contractors (MAC), Supplemental Medical Review Contractor (SMRC), 
Recovery Audit Contractors and the Comprehensive Error patient Rate Testing (CERT) 
contractor. 
 
For purposes of determining the appropriateness of Medicare Part A payment, Medicare 
contractors shall conduct reviews of medical records for inpatient acute IPPS hospital, 
Critical Access Hospital (CAH), Inpatient Psychiatric Facility (IPF) and Long Term Care 
Hospital (LTCH) claims, as appropriate and as so permitted by CMS, based on data 
analysis and their prioritized medical review strategies. Review of the medical record 
must indicate that hospital care was medically necessary, reasonable, and appropriate for 
the diagnosis and condition of the beneficiary at any time during the stay, and that the 
stay was appropriate for Medicare Part A payment. 
 
A.  Determining the Appropriateness of Part A Payment 
 
The term patient status review refers to reviews conducted by Medicare contractors to 
determine a hospitals compliance with Medicare requirements to bill for Medicare Part 
A payment. Medicare contractors shall conduct such reviews in accordance with two 
distinct, but related, medical review policies: a 2-midnight presumption, which helps 
guide contractor selection of claims for medical review, and a 2-midnight benchmark, 
which helps guide contractor reviews of short stay hospital claims for Part A payment. 
Patient status reviews may result in determinations that claims are not properly payable 
under Medicare Part A; patient status reviews do not involve changing a beneficiarys 
status from inpatient to outpatient. 
 
Per the 2-midnight presumption, Medicare contractors shall presume hospital stays 
spanning 2 or more midnights after the beneficiary is formally admitted as an inpatient 
are reasonable and necessary for Part A payment. Medicare contractors shall not focus 
their medical review efforts on stays spanning 2 or more midnights after formal inpatient 
admission absent evidence of systematic gaming, abuse, or delays in the provision of care 
in an attempt to qualify for the 2-midnight presumption. 
 
Per the 2-midnight benchmark, hospital stays are generally payable under Part A if the 
admitting practitioner expects the beneficiary to require medically necessary hospital care 
spanning 2 or more midnights, and such reasonable expectation is supported by the 
medical record documentation. Medicare Part A payment is generally not appropriate for 
hospital stays expected to span less than 2 midnights. If a stay is not reasonably expected 
to span 2 or more midnights, Medicare contractors shall assess the claim to determine if 
an exception exists that would nonetheless make Part A payment appropriate, including: 
    If the procedure is on the Secretarys list of inpatient only procedures 
(identified through annual regulation); 
 
  If the procedure is a CMS-identified, national exception to the 2-midnight 
benchmark; or 
 
  If the admission otherwise qualifies for a case-by-case exception to the 2- 
midnight benchmark because the medical record documentation supports the 
admitting physician/practitioners judgment that the beneficiary required hospital 
care on an inpatient basis despite the lack of a 2- midnight expectation. Medicare 
contractors shall note CMS expectation that stays under 24 hours would rarely 
qualify for an exception to the 2- midnight benchmark. 
 
Hospital treatment decisions for beneficiaries are based on the medical judgment of 
physicians and other qualified practitioners. The 2-midnight rule does not prevent such 
practitioners from providing any service at any hospital, regardless of the expected 
duration of the service. Rather, it provides a benchmark to help guide consistent Part A 
payment decisions. 
 
I. Reviewing Hospital Claims for Patient Status: The 2-Midnight Benchmark 
 
A. Determine if the stay involved an Inpatient Only procedure 
 
When conducting patient status reviews, assuming all other coverage requirements are 
met, the Medicare review contractor shall determine Medicare Part A payment to be 
appropriate if a medically necessary procedure classified by the Secretary as an inpatient 
only procedure is performed. Inpatient only procedures are so designated per 42 
C.F.R.  419.22(n), and are detailed in the annual Outpatient Prospective Payment 
System (OPPS) regulation. 
 
Medicare contractors shall review the medical documentation and make an initial 
determination of whether a medically necessary inpatient only procedure is documented 
within the medical record. If so, and if the other requisite elements for payment are 
present, then the Medicare review contractor shall deem Medicare Part A payment to be 
appropriate, without regard to the expected or actual length of stay. 
If the Medicare review contractor does not identify an inpatient only procedure during the 
initial review, the claim should be assessed in accordance with the 2-midnight 
benchmark. 
 
B. Calculating Time Relative to the 2-Midnight Benchmark 
 
Per the 2-midnight benchmark, Medicare contractors shall assess short stay (i.e., less than 
2 midnights after formal inpatient admission) hospital claims for their appropriateness for 
Part A payment. Generally, hospital claims are payable under Part A if the contractor 
identifies information in the medical record supporting a reasonable expectation on the  part of the admitting practitioner at the time of admission that the beneficiary would 
require a hospital stay that crossed at least two midnights. 
 
Medicare review contractor reviews shall assess the information available at the time of 
the original physician/practitioners decision. The expectation for sufficient 
documentation is well rooted in good medical practice. Physician/practitioners need not 
include a separate attestation of the expected length of stay; rather, this information may 
be inferred from the physician/practitioners standard medical documentation, such as his 
or her plan of care, treatment orders, and progress notes. Medicare contractors shall 
consider the complex medical factors that support both the decision to keep the 
beneficiary at the hospital and the expected length of the stay. These complex medical 
factors may include, but are not limited to, the beneficiarys medical history and 
comorbidities, the severity of signs and symptoms, current medical needs, and the risk 
(probability) of an adverse event occurring during the time period for which 
hospitalization is considered. 
 
For purposes of determining whether the admitting practitioner had a reasonable 
expectation of hospital care spanning 2 or more midnights at the time of admission, the 
Medicare contractors shall take into account the time the beneficiary spent receiving 
contiguous outpatient services within the hospital prior to inpatient admission. This pre- 
admission time may include services such as observation services, treatments in the 
emergency department (ED), and procedures provided in the operating room or other 
treatment area. If the beneficiary was transferred from one hospital to another, then for 
the purpose of determining whether the beneficiary satisfies the 2-midnight benchmark at 
the recipient hospital, the Medicare contractors shall take into account the time and 
treatment provided to the beneficiary at the initial hospital.  That is, the start clock for 
transfers begins when the care begins in the initial hospital. In the event that a beneficiary 
was transferred from one hospital to another, the Medicare review contractor shall 
request documentation that was authored by the transferring hospital to support the 
medical necessity of the services provided and to verify when the beneficiary began 
receiving hospital care. Medicare contractors will generally expect this information to be 
provided by the recipient hospital seeking Part A payment. 
 
Medicare contractors shall continue to follow CMS' longstanding instruction that 
Medicare Part A payment is prohibited for care rendered for social purposes or reasons of 
convenience that are not medically necessary. Therefore, Medicare contractors shall 
exclude extensive delays in the provision of medically necessary care from the 2- 
midnight benchmark calculation. Factors that may result in an inconvenience to a 
beneficiary, family, physician or facility do not, by themselves, support Part A payment 
for an inpatient admission. When such factors affect the beneficiary's health, Medicare 
contractors shall consider them in determining whether Part A payment is appropriate for 
an inpatient admission. 
 
NOTE: While, as discussed above, the time a beneficiary spent as an outpatient before 
being admitted as an inpatient is considered during the medical review process for 
purposes of determining the appropriateness of Part A payment, such time does not  qualify as inpatient time. (See Pub. 100-02, Ch. 1, Section 10.2 for additional information 
regarding the formal order for inpatient admission.) 
 
C. Unforeseen Circumstances Interrupting Reasonable Expectation 
 
The 2-midnight benchmark is based on the expectation at the time of admission that 
medically necessary hospital care will span 2 or more midnights. Medicare contractors 
shall, during the course of their review, assess the reasonableness of such expectations. In 
the event that a stay does not span 2 or more midnights, Medicare contractors shall look 
to see if there was an intervening event that nonetheless supports the reasonableness of 
the physician/practitioners original judgment. An event that interrupts an otherwise 
reasonable expectation that a beneficiarys stay will span 2 or more midnights is 
commonly referred to by CMS and its contractors as an unforeseen circumstance. Such 
events must be documented in the medical record, and may include, but are not limited 
to, unexpected: death, transfer to another hospital, departure against medical advice, 
clinical improvement, and election of hospice in lieu of continued treatment in the 
hospital. 
 
D.  Stays Expected to Span Less than 2 Midnights 
 
When a beneficiary enters a hospital for a surgical procedure not specified by Medicare 
as inpatient only under 42 C.F.R.  419.22(n), a diagnostic test, or any other treatment, 
and the physician expects to keep the beneficiary in the hospital for less than 2 midnights, 
the services are generally inappropriate for inpatient payment under Medicare Part A, 
regardless of the hour that the patient came to the hospital or whether the beneficiary 
used a bed. 
 
The Medicare review contractor shall assess such claims to see if they qualify for a 
general or case-by-case exception to this generalized instruction, which would make the 
claim appropriate for Medicare Part A payment, assuming all other requirements are met. 
 
E.  Exceptions to the 2-Midnight Rule 
 
1.  Medicares Inpatient-Only List 
 
As discussed above, inpatient admissions where a medically necessary Inpatient-Only 
procedure is performed are generally appropriate for Part A payment regardless of 
expected or actual length of stay. 
 
2.  Nationally-Identified Rare & Unusual Exceptions to the 2-Midnight Rule 
 
If a general exception to the 2-midnight benchmark, as identified by CMS, is present 
within the medical record, the Medicare review contractor shall consider the inpatient 
admission to be appropriate for Part A payment so long as other requirements for Part A 
payment are met. 
CMS has identified the following national or general exception to the 2-midnight rule:   
Mechanical Ventilation Initiated During Present Visit 
 
CMS believes newly initiated mechanical ventilation to be rarely provided in 
hospital stays less than 2 midnights, and to embody the same characteristics as 
those procedures included in Medicares inpatientonly list. While CMS believes 
a physician will generally expect beneficiaries with newly initiated mechanical 
ventilation to require 2 or more midnights of hospital care, if the physician 
expects that the beneficiary will only require one midnight of hospital care, but 
still orders inpatient admission, Part A payment is nonetheless generally 
appropriate. 
 
3.  Physician-Identified Case-by-Case Exceptions to the 2-Midnight Rule 
 
For hospital stays that are expected to span less than 2 midnights, an inpatient admission 
may be payable under Medicare Part A on a case-by-case or individualized basis if the 
medical record supports the admitting physician/practitioners judgment that the 
beneficiary required hospital care on an inpatient basis despite the lack of a 2-midnight 
expectation. Medicare contractors shall consider, when assessing the physicians 
decision, complex medical factors including, but not limited to: 
 
  The beneficiary history and comorbidities; 
  The severity of signs and symptoms; 
  Current medical needs; and 
  The risk of an adverse event. 
 
Medicare contractors shall note CMS expectation that stays under 24 hours would rarely 
qualify for an exception to the 2- midnight benchmark, and as such, may be prioritized 
for medical review. 
 
A. Determining Whether Covered Care Was Given at Any Time During a Stay in a PPS 
Hospital 
 
Medicare contractors shall utilize the medical record to determine whether procedures 
and diagnoses were coded correctly. If the medical record supports that they were, pay 
the claim as billed. If the medical record supports that they were not, then utilize ICD-9- 
CM or ICD-10-CM coding guidelines to adjust the claim and pay at the appropriate 
DRG. See section 6.5.4 of this chapter for further details on DRG validation review. 
When you determine that the beneficiary did not, at the time of admission, have an 
expected length of stay of 2 or more midnights, or otherwise meet CMS standards for 
payment of an inpatient admission, but that the beneficiary's condition changed during 
the stay and Part A payment became appropriate, you shall review the case in accordance 
with the following procedures: 
 
  The first day on which inpatient care is determined to be medically necessary is 
deemed to be the date of admission;    The deemed date of admission applies when determining cost outlier status (i.e., 
days or services prior to the deemed date of admission are excluded for outlier 
purposes); and 
  The diagnosis determined to be chiefly responsible for the beneficiary's need for 
covered services on the deemed date of admission is the principal diagnosis. 
  Adjust the claim according to the diagnosis determined to be responsible for the 
need for medically necessary care to have been provided on an inpatient basis. 
 
When you determine that the beneficiary did not meet the requirements for Part A 
payment at any time during the admission, deny the claim in full. 
 
6.5.3 - DRG Validation Review 
(Rev. 608, Issued: 08-14-15, Effective: 01-01-12, Implementation: 09-14-15) 
 
The contractor shall perform DRG validation on PPS, as appropriate, reviewing the 
medical record for medical necessity and DRG validation.  The purpose of DRG 
validation is to ensure that diagnostic and procedural information and the discharge status 
of the beneficiary, as coded and reported by the hospital on its claim, matches both the 
attending physician's description and the information contained in the beneficiary's 
medical record.  Reviewers shall validate principal diagnosis, secondary diagnoses, and 
procedures affecting or potentially affecting the DRG. 
 
NOTE:  For PPS waived/excluded areas, review shall be performed appropriate to your 
area. 
 
A.  Coding 
 
The contractor shall use individuals trained and experienced in ICD coding to perform 
the DRG validation functions.  The validation is to verify the accuracy of the hospital's 
ICD coding of all diagnoses and procedures that affect the DRG. 
 
The contractor shall base DRG validation upon accepted principles of coding practice, 
consistent with guidelines established for ICD coding, the Uniform Hospital Discharge 
Data Set data element definitions, and coding clarifications issued by CMS.  The 
contractor shall not change these guidelines or institute new coding requirements that do 
not conform to established coding rules. 
 
The contractor shall verify a hospital's coding in accordance with the coding principles 
reflected in the ICD Coding Manual.  Contractors shall use the ICD version in place at 
the time the services were rendered, and the official National Center for Health Statistics 
and CMS addenda, which update the ICD Manual annually.  The annual addenda are 
effective on October 1 of each year and apply to discharges occurring on or after October 
1.  The contractor shall use only ICD Manual volumes based on official ICD Addendum 
and updates when performing DRG validation. 
  Hospitals are not required to code minor diagnostic and therapeutic procedures (e.g., 
imaging studies, physical, occupational, respiratory therapy), but may do so at their 
discretion. 
 
B.  Diagnoses 
 
Contractors shall ensure that the hospital reports the principal diagnosis and all relevant 
secondary diagnoses on the claim.  The relevant diagnoses are those that affect DRG 
assignment.  The hospital must identify the principal diagnosis when secondary diagnoses 
are also reported.  When a comorbid condition, complication, or secondary diagnosis 
affecting the DRG assignment is not listed on the hospital's claim but is indicated in the 
medical record, insert the appropriate code on the claim form.  If the hospital already 
reported the maximum number of diagnoses allowed on the claim form, delete a code that 
does not affect DRG assignment, and insert the new code. 
 
The contractor is not required to code additional diagnoses on the claim as long as all 
conditions that affect the DRG are reflected in the diagnoses already listed, and the 
principal diagnosis is correct and properly identified.  The hospital can list the secondary 
diagnoses in any sequence on the claim form because the GROUPER program will 
search the entire list to identify the appropriate DRG assignment. 
 
  Principal Diagnosis -The contractor shall determine whether the principal 
diagnosis listed on the claim is the diagnosis which, after study, is determined to have 
occasioned the beneficiary's admission to the hospital.  The principal diagnosis (as 
evidenced by the physician's entries in the beneficiary's medical record) (see 42 CFR 
412.46) must match the principal diagnosis reported on the claim form.  The principal 
diagnosis must be coded to the highest level of specificity.  For example, a diagnosis 
from "Symptoms, Signs, and Ill-defined Conditions," may not be used as the principal 
diagnosis when the underlying cause of the beneficiary's condition is known. 
 
  Inappropriate Diagnoses -The contractor shall exclude diagnoses relating to an 
earlier episode that have no bearing on the current hospital stay.  Delete any incorrect 
diagnoses and revise the DRG assignment as necessary. 
 
C.  Procedures 
 
The contractor shall ensure that the hospital has reported all procedures affecting the 
DRG assignment on the claim.  If there are more procedures performed than can be listed 
on the claim, verify that those reported include all procedures that affect DRG 
assignment, and that they are coded accurately. See section 6.5.4 below for further detail 
on reviewing procedures. 
 
 
6.5.4  Review of Procedures Affecting the DRG 
(Rev. 475, Issued: 07-19-13, Effective Date: 08-19-13; Implementation Date: 08-19-
13)   
The contractor shall determine whether the performance of any procedure that affects, or 
has the potential to affect, the DRG was reasonable and medically necessary.  If the 
admission and the procedure were medically necessary, but the procedure could have 
been performed on an outpatient basis if the beneficiary had not already been in the 
hospital, do not deny the procedure or the admission. 
 
When a procedure was not medically necessary, the contractor shall follow these 
guidelines: 
 
If the admission was for the sole purpose of the performance of the non-covered 
procedure, and the beneficiary never developed the need for a covered level of service, 
deny the admission; 
 
If the admission was appropriate, and not for the sole purpose of performing the 
procedure, deny the procedure (i.e., remove from the DRG calculation), but approve the 
admission; 
 
If performing a cost outlier review, in accordance with Pub. 100-10, chapter 4, 4210 B, 
and the beneficiary was in the hospital for any day(s) solely for the performance of the 
procedure or care related to the procedure, deny the costs for the day(s) and for the 
performance of the procedure; and 
 
If performing a cost outlier review, and the beneficiary was receiving the appropriate 
level of covered care for all hospital days, deny the procedure or service. 
 
See Pub. 100-02, Chapter 1, 10 for further detail on payment of inpatient claims 
containing non-covered services. 
 
6.5.5  Special Review Considerations 
(Rev. 608, Issued: 08-14-15, Effective: 01-01-12, Implementation: 09-14-15) 
 
Refer to Pub. 100-04, chapter 3, 20 C. for information regarding handling of claims with 
DRG 468.  This DRG represents a discharge with valid data but where the surgical 
procedure is unrelated to the principal diagnosis. 
 
Refer to 100-04, chapter 3, 20.2.1, subsection D.9. for a description of questionable 
admission diagnosis codes.  A/B MACs (A) may wish to consider including these 
diagnoses in their data analysis. 
 
For a listing of diagnosis codes identified as questionable admission codes see the 
Medicare Code Editor (MCE) Web site at:  
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/AcuteInpatientPPS/index.html?redirect=/AcuteInpatientPPS/01_overview.asp 
  Refer to 100-04, chapter 3, 20.2.1, subsection D.9 for a description of diagnoses which 
are acceptable only when coded with a secondary diagnosis.  A/B MACs (A) may wish to 
include these diagnoses in their data analysis as the MCE will not reject them when they 
are billed with a secondary diagnosis. 
 
For a listing of diagnosis codes that are acceptable only when coded with a secondary 
diagnosis see the MCE Website at:  
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/AcuteInpatientPPS/Downloads/FY_14_Definition_of-
Medicare_Code_Edits_V_31_Manual.pdf 
 
6.5.6 - Length-of-Stay Review 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The contractor shall determine whether the length-of-stay for PPS cost outlier claims and 
specialty hospital/unit claims, when selected for medical review, is appropriate and 
medically necessary. Identify cases of potential delayed discharge. For example, the 
beneficiary was medically stable, and continued hospitalization was unnecessary, or 
nursing home placement or discharge to home with home care would have been 
appropriate in providing needed care without posing a threat to the safety or health of the 
beneficiary (see 4110). 
 
If Medicare payment is applicable to only part of the stay, review the covered portion of 
the stay and enough of the rest of the medical record (if necessary) to answer any specific 
questions that may arise from review of the covered part of the stay. If a beneficiary 
became Medicare eligible during a hospital stay, review enough of the medical record 
prior to the initiation of Medicare benefits to acquire sufficient information to make a 
determination. Do not perform lengthy reviews of non-covered care. In PPS 
waived/excluded areas, length-of-stay review is performed for all inpatient admissions 
that are selected for medical review. 
 
The contractor shall determine whether the length of stay was appropriate for claims 
selected for medical review that represent PPS cost outliers. However, the contractor 
shall not include days on which care is determined not to have been medically necessary 
in the calculation of outlier payments. Where it is determined that a beneficiarys stay 
was unnecessarily long, and potentially represents fraud or abuse, the contractor shall 
make a referral to the UPIC. 
 
6.5.7 - Reserved for Future Use 
(Rev. 475, Issued: 07-19-13, Effective Date: 08-19-13; Implementation Date: 08-19-
13) 
 
6.5.8 - Reserved for Future Use 
(Rev. 475, Issued: 07-19-13, Effective Date: 08-19-13; Implementation Date: 08-19-
13) 
  6.5.9 - Circumvention of PPS 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
If you suspect, during review of a claim associated with a transfer or readmission, that a 
provider of Medicare services took an action with the intent of circumventing PPS (as 
described in 1886(f)(2) of the Act) and that action resulted in unnecessary admissions, 
premature discharges and readmissions, multiple readmissions, or other inappropriate 
medical or other practices with respect to beneficiaries or billing for services, you shall 
make a referral to your Unified Program Integrity Contractor (UPIC). 
 
6.6 - Referrals to the Quality Improvement Organization (QIO) 
(Rev. 10365; Issued: 10-02-20; Effective: 08-27-20; Implementation: 08-27-20) 
 
The MACs shall only refer Quality of (Health) Care Concerns to the QIOs. A Quality of 
(Health) Care Concern is defined as a concern that care provided did not meet a 
professionally recognized standard of health care. The Contractor shall follow the 
referral process as agreed upon in the QIO-MAC Joint Operating Agreement. The QIOs 
will retain their responsibility for performing expedited determinations, Hospital-Issued 
Notices of Non-Coverage (HINN) reviews, quality reviews, transfer reviews, readmission 
reviews and, provider-requested higher-weighted DRG reviews. 
 
The Circumvention of PPS will continue to be reported to your UPIC. The quality 
initiatives associated with payment for performance are now the reporting source for 
Readmission Reviews and Transfer Review data to the QIOs. Non-covered 
benefits/services are not to be reported to the QIO. 
 
All initial payment determinations and claim adjustments are required to be performed by 
the MAC. 
 
All MACs are to turn off all automated edits/processes that generate a referral to the 
QIOs prior to a medical record review of the claim. Referrals to the QIO shall be limited 
to Quality of Health Care issues as defined above and shall result from a clinicians 
medical record review of a providers medical documentation. 
 
If during the medical record review process, a concern that care provided did not meet a 
professionally recognized standard of health care, the MAC shall issue a payment 
determination and/or adjustment for the claim, complete the QIO referral form, and 
forward the completed referral form and file(s) to the QIO. If the referral form is not 
complete, the QIO will return the file to the MAC and request that the MAC provide the 
missing information prior to the QIO performing a review. 
 
A non-covered service and/or procedure shall not be automatically referred to the QIO. 
The MAC shall make the initial payment determination and/or claim adjustment for a 
non-covered service or procedure in accordance with the Medicare IOM 100-04, Claims 
Processing Manual and IOM 100-02, Benefit Policy Manual. 
  If during the medical record review process, a concern that care provided did not meet a 
professionally recognized standard of health care, such as a medically unnecessary 
procedure, the claim shall be referred to the QIO for quality review after payment 
determination and/or claim adjustment is made. 
 
The MACs shall not instruct providers, suppliers, or beneficiaries to refer payment issues 
to the QIO. If the provider or supplier does not agree with the payment and/or claim 
adjustment decision, the MAC shall communicate their options to follow the current 
process in IOM 100-08, requesting a reopening or an appeal. If the beneficiary disagrees 
with the payment decision and makes a request for re-evaluation/redetermination, this 
will be considered a demand bill and is the responsibility of the MAC. 
 
6.7 - Medical Review of Inpatient Rehabilitation Facility (IRF) Services 
(Rev. 10184; Issued: 06-19-2020; Effective: 07-21-2020; Implementation: 07-21-
2020) 
 
This section applies to Unified Program Integrity Contractors (UPIC), Medicare 
Administrative Contractors (MAC), Supplemental Medical Review Contractor (SMRC), 
Recovery Audit Contractors (RAC) and the Comprehensive Error Rate Testing (CERT) 
Contractor, as indicated. 
 
6.7.1  Reviewing for Intensive Level of Rehabilitation Therapy Services 
Requirements 
(Rev. 10184; Issued: 06-19-2020; Effective: 07-21-2020; Implementation: 07-21-
2020) 
 
When reviewing IRF claims, the UPIC, MAC, SMRC, CERT and RAC shall verify that 
the IRF documentation requirements are met in accordance with IOM 100-02, Medicare 
Benefit Policy Manual, Chapter 1, Section 110. 
 
The UPIC, MAC, SMRC, CERT and RAC shall not make absolute claim denials based 
solely on a threshold of therapy time not being met. When the current industry standard 
of generally 3 hours of therapy (physical therapy, occupational therapy, speech-language 
pathology, or prosthetics/orthotics) per day at least 5 days per week or at least 15 hours of 
intensive rehabilitation therapy within a 7 consecutive day period is not met, the claim 
shall undergo further review. 
 
The UPIC, MAC, SMRC, CERT and RAC shall use clinical review judgment to 
determine medical necessity of the intensive rehabilitation therapy program based on the 
individual facts and circumstances of the case, and not on the basis of any threshold of 
therapy time. The standard of care for IRF patients is individualized (i.e., one-on-one) 
therapy.  Group and concurrent therapy can be used on a limited basis within the current 
industry standard of generally 3 hours of therapy per day at least 5 days per week or at 
least 15 hours of intensive rehabilitation therapy within a 7-consecutive day period. In 
those instances in which group therapy better meets the patients needs on a limited basis, 
the situation/rationale that justifies group therapy should be specified in the patients  medical record at the IRF. However, MAC, SMRC, CERT and RAC shall not deny solely 
because the situation/rationale that justifies group therapy is not submitted in response to 
an ADR. 
 
6.8  Medical Review of Evaluation and Management (E/M) 
Documentation  
(Rev.808; Issued: 07-13-18; Effective: 08-14-18; Implementation: 08-14-18) 
 
This section applies to MACs, RACs, UPICs, SMRC and CERT. 
 
6.8.1  Medical Review of E/M Documentation Provided by Student 
(Rev.808; Issued: 07-13-18; Effective: 08-14-18; Implementation: 08-14-18) 
 
The Medicare Claims Processing Manual, Chapter 12, Section 100.1.1 (B) states the 
teaching physician must personally perform (or re-perform) the physical exam and 
medical decision making activities of the E/M service being billed, but may verify any 
student documentation of them in the medical record rather than re-documenting this 
work. If the teaching physician chooses to rely on the medical student documentation and 
chooses not to re-document the E/M service, contractors shall consider this requirement 
met if the teaching physician signs and dates the medical students entry in the medical 
record.  
 
6.9  Medical Review of Diagnostic Tests  
(Rev. 850, Issued: 12-14-18; Effective: 12-17-18; Implementation: 12-17-18) 
 
This section applies to MACs, RACs, UPICs, SMRC and CERT. 
 
6.9.1  Medical Review of Diagnostic Laboratory Tests 
(Rev. 850, Issued: 12-14-18; Effective: 12-17-18; Implementation: 12-17-18) 
 
42 CFR 410.32 states that all diagnostic x-ray tests, diagnostic laboratory tests, and 
other diagnostic tests must be ordered by the physician who is treating the beneficiary 
and that tests not ordered by the physician who is treating the beneficiary are not 
reasonable and necessary.  
 
Pub. 100-02, Chapter 15, Section 80.6.1 states that while a physician order is not required 
to be signed, the physician must clearly document, in the medical record, his or her intent 
that the test be performed.  
 
Contractors shall consider order requirements for diagnostic laboratory tests met if there 
is: 
1.  A signed order or signed requisition listing the specific test; or 
2.  An unsigned order or unsigned laboratory requisition listing the specific tests to 
be performed AND an authenticated medical record that supports the  physician/practitioners intent to order the tests (e.g. order labs, check 
blood, repeat urine); or 
3.  An authenticated medical record that supports the physician/practitioners intent 
to order the specific tests. 
See Pub. 100-08, Chapter 3, Section 3.3.2.4 for authentication requirements.  
 
Regardless of how the order requirements are met, contractors shall verify that the 
supporting authenticated medical record documentation contains sufficient information 
supporting the ordered/provided tests are reasonable and necessary per 42 CFR 410.32.  
 
Note: As noted in Pub. 100-02, Chapter 15, Section 80.6.1, if the order is communicated 
via telephone, both the treating physician/practitioner or his/her office, and the testing 
facility must document the telephone call in their respective copies of the beneficiarys 
medical records.  
 
  Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R10365PI 10/02/2020  Updates to Chapters 1, 2, 3, 4, 5, 6, 7, 8, 10,  08/27/2020 11884 
11, and Exhibits of Publication (Pub.) 100-08 
R10228PI 07/27/2020  Updates to Chapters 1, 2, 3, 4, 5, 6, 7, 8, 10,  08/27/2020 11884 
11, and Exhibits of Publication (Pub.) 100-08 
Rescinded and replaced by Transmittal 10365 
R10184PI 06/19/2020  Updates to Chapters 4, 6, and 8 of  07/21/2020 11812 
Publication (Pub.) 100-08 
R924PI  11/15/2019  Updates to the Medical Review Instructions  12/17/2019 11520 
Related to Skilled Nursing Facilities (SNF) 
R870PI  03/22/2019  Manual Updates Related to Home Health  04/22/2019 11104 
Certification and Recertification Policy 
Changes 
R850PI  12/14/2018  Medical Review of Diagnostic Laboratory  12/17/2018 10908 
Tests 
R836PI  10/19/2018  Medical Review of Diagnostic Laboratory  11/21/2018 10908 
Tests 
R832PI  10/05/2018  Modification to Chapter 6, Section 6.3  11/06/2018 10921 
(Medical Review of Certification and 
Recertification of Residents in SNFs) of 
Publication (Pub.) 100-08 
R808PI  07/13/2018  Medical Review of Evaluation and  08/14/2018 10627 
Management (E/M) Documentation 
R771PI  02/23/2018  Clarification of Instructions Regarding the  03/23/2018 10482 
Intensive Level of Rehabilitation Therapy 
Services Requirements 
R721PI  06/09/2017  Elimination of Routine Reviews Including  07/11/2017 9809 
Documentation Compliance Reviews and 
Instituting Three Medical Reviews 
R716PI  05/12/2017  Clarifying Medical Review of Hospital  06/13/2017 10080 
Claims for Part A Payment 
R704PI  03/17/2017  Home Health (HH) Language in Pub. 100-8  04/17/2017 10006 
R656PI  06/15/2016  Medical Review of Skilled Nursing Facility  06/28/2016 9571 
Prospective Payment System (SNF PPS) 
Bills 
R651PI  05/27/2016  Medical Review of Skilled Nursing Facility  06/28/2016 9571 
Prospective Payment System (SNF PPS) 
Bills  Rescinded and replaced by 
Transmittal 656  Rev #  Issue Date  Subject  Impl Date  CR# 
R608PI  08/14/2015  Update to Pub. 100-08 to Provide Language- 09/14/2015 8747 
Only Changes for Updating ICD-10 and ASC 
X12 
R603PI  07/21/2015  Medical Review of Home Health Services  08/11/2015 9189 
R602PI  07/10/2015  Medical Review of Home Health Services   08/11/2015 9189 
Rescinded and replaced by Transmittal 603 
R601PI  07/02/2015  Review of Home Health Claims  08/03/2015 9240 
R475PI  07/19/2013  PIM Chapter 6 MR Guidelines 6.54-6.5.7  08/19/2013 8379 
Update 
R308PI  10/30/2009  Rural Air Ambulance  11/30/2009 6682 
R264PI  08/07/2008  Transition of Responsibility for Medical  08/15/2008 5849 
Review From Quality Improvement 
Organizations (QIOs) 
R196PI  03/30/2007  Medical Review of Skilled Nursing Facility  04/30/2007 5418 
(SNF) Claims Using the MDS QC System 
Software 
R174PI  11/17/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities 
R171PI  11/03/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities  Replaced by Transmittal 174 
R163PI  09/29/2006  Transition of Medical Review Educational  10/06/2006 5275 
Activities  Replaced by Transmittal 170 
R102PI  02/01/2005  Medical Review of Rural Air Ambulance  02/14/2005 3571 
Services 
R093PI  01/14/2005  Medical Review of Rural Air Ambulance  02/14/2005 3571 
Services - Replaced by Transmittal 102 
R082PI  07/23/2004  Home Health Demand Bills  08/23/2004 3266 
R074PI  04/23/2004  SNF Certification and Recertification  05/24/2004 3150 
R071PI  04/09/2004  Rewrite of Program Integrity Manual (except  05/10/2004 3030 
Chapter 10) to Apply to PSCs 
R042PI  06/20/2003  Intermediary Medical Review Guidelines  07/01/2003 2720 
R026PIM 04/27/2002  Deletes Section 1.7 Quality Issues in SNF  N/A  2100 
and Referral to other Agencies 
R023PIM 03/18/2002  Revises and clarifies HHAs Certification and  05/02/2002 1981 
Plan of Care Data 
R020PIM 02/21/2002  Revises Terminology used in Chap 6,sec 12  04/01/2002 1974 
MR of Ambulance Services  Rev #  Issue Date  Subject  Impl Date  CR# 
R018PIM 01/17/2002  Manualizes PM A-00-08, Revises the  N/A  1064 
existing SNF MR guidelines 
R015PIM 10/29/2001  MR of Partial Hospitalization Claims,  12/13/2001 1831 
R003PIM 11/22/2000  Complete Replacement of PIM Revision 1.  NA  1292 
R002PIM 9/15/2000  Intermediary MR Guidelines for Specific  NA  882 
Services 
R001PIM 06/2000  Initial Release of Manual  NA  931 
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