New CMS policy could change inpatient rehab denial trend

In the past, Medicare contractors have been allowed to deny a claim for inpatient rehab if the required three-hour minimum of direct care mark was missed by mere minutes, even if the additional minutes were made up on a subsequent day. Now, however, due to new guidance released by CMS, this denial trend could change.

In a memo with an implementation date of March 23, 2018, CMS instructs Medicare contractors to consider the patient’s overall needs and treatment when denying claims, rather than just the minutes of therapy completed. The argument is that basing claims denial strictly on therapy minutes doesn’t take into consideration the patient’s medical necessity or medical conditions, factors that should be considered when justifying rehab.

Because Medicare contractors have an incentive to deny claims, it’s unclear whether this change will make a difference in the amount of inpatient rehab claims denied.

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