(Medicare Claims Processing Manual)

4. In general, when the A/B MAC (A) is using a sample of medical records to determine compliance with the requirements in 140.1.1B- D, the A/B MAC (A) always has the discretion to determine if a patient meets or does not meet any of the medical conditions listed  in 140.1.1C based upon a review of the clinical record, regardless of the results of the presumptive methodology described previously. In other words, the compliance percentage that is determined using the medical review methodology described in this section will supersede the compliance percentage that was determined for the same compliance review period using the presumptive methodology. To ensure that the compliance review process is similar for all IRFs, the A/B MAC (A) must have written policies that describe the reasons for using a random sample of medical records to determine an IRFs compliance percentage when the presumptive methodology has shown that the IRF met the compliance  threshold.  5. The A/B MAC (A) will inform the RO if an IRF fails to provide information in accordance with the requirements specified above in subsection D2. The RO will notify the IRF that failure to provide the A/B MAC (A) with the information in accordance with the r equirements specified above in subsection D2 will result in a determination by the RO that the IRF has not met the requirements specified  above in 140.1.1B- D.  F. - By the 15th day of each month, the A/B MAC (A) responsible for determining the compliance percentage for each IRF using either of the methods specified above in 140.1.3C or 140.1.3D will submit a report to CMS via e-mail.  Instructions regarding the format of the report, how to complete the report, and where to send it are specified on the IRF PPS website at: http://www.cms.gov/Medicare/Medicare-  Fee-for-Service-  Payment/InpatientRehabFacPPS/Criteria.html .  G. - The A/B MAC (A) must verify that the requirements specified above in 140.1.1B-E and 140.1.2 G- K were  met.  H. - The State Agency will determine whether the criteria specified above in  140.1.1F-K and 140.1.2 Q were met.  140.1.4 - New IRFs (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  An IRF hospital or IRF unit is considered new if it has not been paid under the IRF PPS for at least 5 calendar years.  A new IRF will be considered new from the point that it first participates in Medicare as an IRF until the end of its first full 12 -month cost reporting period.  A new IRF must provide written certification that the inpatient population it intends to serve will meet the requirements in 140.1.1B- D above. The written certification is effective for the first full 12 -month cost reporting period that occurs after the IRF begins being paid under the IRF PPS, and for any cost reporting period of not less than 1 month and not more than 11 months occurring between the date the IRF begins being paid under the IRF PPS and the start of the IRFs first full 12 -month cost reporting period.   As described in section 140.1.9 below, retroactive adjustments may be made for any period during which the hospital has self- attested to meeting the requirements specified in 140.1.1B-D, but is shown not to have actually met these requirements during that period.  140.1.5 - Changes in the Status of an IRF Unit  (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  For purposes of payment under the IRF PPS, the status of an IRF unit may be changed from not excluded from the IPPS to excluded from the IPPS only at the start of a cost reporting period. If an IRF unit is added to a hospital after the start of a cost reporting period, it cannot be excluded from the IPPS before the start of the hospital's next cost reporting period.  The status of an IRF unit may be changed from excluded from the IPPS to not excluded from the IPPS at any time during a cost reporting period, but only if the hospital notifies the A/B MAC (A) and the RO in writing of the change at least 30 days before the date of the change.  In addition, the hospital must maintain the information needed to accurately determine which costs are and are not attributable to the IRF unit. A change in the status of a unit from excluded to not excluded that is made during a cost reporting period must remain in effect for the remainder of that cost reporting period.   140.1.6 - New IRF Beds  (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  Any IRF beds that are added to an existing IRF must meet all applicable State Certificate of Need and State licensure laws.  New IRF beds may be added one time at any time during a cost reporting period and will be considered new for the rest of that cost reporting period.  A full 12- month cost reporting period must elapse between the delicensing or decertification of IRF beds in an IRF hospital or IRF unit and the addition of new IRF beds to that IRF hospital or IRF unit.  Before an IRF can add new beds, i t must receive written approval from the appropriate CMS RO, so that the CMS RO can verify that a full 12-month cost reporting period has elapsed since the IRF has had beds delicensed or decertified.   New IRF beds are included in the compliance review calculations for determining compliance with 140.1.1B -D above from the time that they are added to the IRF.    140.1.7 - Change of Ownership or Leasing  (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  If an IRF hospital (or a hospital that has an IRF unit) undergoes a change of ownership or leasing, as defined in 42 CFR 489.18, the IRF hospital (or IRF unit of a hospital) retains its excluded status and will continue to be paid under the IRF PPS before and after the change of ownership or leasing if the new owner(s) of the IRF hospital (or the hospital with an IRF unit) accept assignment of the previous owners Medicare provider agreement and the IRF continues to meet all of the requirements for payment under the IRF PPS.  Note that an IRFs payment status under the IRF PPS is a Medicare classification s tatus, which cannot be separated from its host hospital and therefore cannot be purchased outside of the purchase of its host hospital.   If the new owner(s) do not accept assignment of the previous owners Medicare provider agreement, the IRF is considered to be voluntarily terminated and the new owner(s) may re-apply to the Medicare program to operate a new IRF, under the requirements for new IRFs in 140.1.4 above.   If, after the change of ownership or leasing, the IRF does not continue to meet all of the requirements for payment under the IRF PPS, then the IRF loses its excluded status and will be paid instead under the IPPS.  140.1.8 - Mergers  (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  If an IRF hospital (or a hospital with an IRF unit) merges with another hospital and the owner(s) of the merged hospital accept assignment of the IRF hospitals provider agreement (or the provider agreement of the hospital with the IRF unit), then the IRF hospital or IRF unit retains its excluded status and will continue to be paid under the IRF PPS before and after the merger, as long as the IRF hospital or IRF unit continues to meet all of the requirements for payment under the IRF PPS. Note that an IRFs  payment status under the IRF PPS is a Medicare classification status, which cannot be separated from its host hospital and therefore cannot be merged with another entity outside of the merger with its host hospital.   If the owner(s) of the merged hospital do not accept assignment of the IRF hospitals provider agreement (or the provider agreement of the hospital with the IRF unit), then the IRF hospital or IRF unit is considered voluntarily terminated and the owner(s) of the merged hospital may re -apply to the Medicare program to operate a new IRF under the requirements for new IRFs in 140.1.4 above.   140.1.9 - Retroactive Adjustments for Provisionally Excluded IRFs or IRF Beds  (Rev. 2673, Issued: 03 -14-13, Effective: 04 -22-13, Implementation: 04- 22-13)  For cost reporting periods beginning on or after October 1, 1991, if a new IRF (or new beds that are added to an existing IRF) are paid under the IRF PPS for an initial cost reporting period during which the hospital has self -attested to meeting the requir ements specified above in 140.1.1B -D, but the inpatient population actually treated in the new unit or the beds added to the existing unit during that cost reporting period do not meet the requirements specified above in 140.1.1B -D, CMS adjusts payments to the hospital retroactively in accordance with the procedure specified below.   A. - If an IRF hospital, IRF unit, or group of new IRF beds is paid under the IRF PPS for a cost reporting period based on a written certification that it will meet the requirements specified above in 140.1.1B -D, but does not actually meet the requirement f or that cost reporting period, CMS adjusts Medicare payments to the hospital retroactively in accordance with paragraph C below.  B. - In the case of a unit to which new beds have been added, the requirement in 140.1.1B -D above is applied to the entire unit, including both new and existing beds. If the entire unit is able to meet the requirement, the previously existing unit and the a dded beds are presumed to meet the requirement separately and no payment adjustment as specified below in paragraph C is made. If the unit as a whole does not meet the requirement specified above in 140.1.1B -D, the hospital must furnish the A/B MAC (A) or the State Agency, as specified by the RO, the information needed to determine whether the requirement specified in 140.1.1B -D above was met by the established portion of the unit (that is, the previously existing unit) and by the newly added beds, cons idered separately. If the hospital is not able to demonstrate that the established portion of the unit met the requirement, then that portion of the facility will not be classified as an IRF for the following cost reporting period.  Retroactive adjustments  may apply.  If the added beds are shown to have met the requirement specified above in 140.1.1B -D, then those beds are eligible to be included as part of the units classification as an IRF for the following cost reporting period. If the added beds did not meet the r equirement, the A/B MAC (A) adjusts its payment to the unit retroactively in accordance with paragraph C below and the added beds will not be included as part of the unit classified as an IRF for the following cost reporting period.   If the hospital does not have the records needed to discriminate between the performance of the previously existing unit and that of the added beds, or for other reasons does not furnish the information requested by the A/B MAC (A) or State Agency, neither  the previously existing unit nor the added beds will be classified as an IRF for the following cost reporting period. In that case, the A/B MAC (A) adjusts its payment to the entire unit retroactively in accordance with paragraph C below.   C. - The A/B MAC (A) adjusts payment to the hospital by calculating the difference between the amount actually paid for services to Medicare patients in the IRF hospital, IRF unit, or new IRF beds during the period of provisional exclusion, and the amount that would have been paid if the IRF hospital, IRF unit, or new IRF beds had not been excluded from the IPPS. The A/B MAC (A) then takes action to recover the resulting overpayment, or corrects the underpayment to the hospital.  140.2 - Payment Provisions Under IRF PPS  (Rev.  11504, Issued 08- 05-22; Effective:10 -01-22; Implementation: 10 -03-22)