Rehab facilities could be left with ED bill

CMS provides ambiguous answer to concern

One of the odd twists that some rehab administrators fear could occur under the inpatient rehabilitation facility (IRF) prospective payment system (PPS) is a situation in which an inpatient rehab patient requires a brief emergency department (ED) visit and is then returned to the rehab facility, which then must foot the ED bill.

"The rehab facility would have no say over what the ED does, which tests are run, but the bill is sent back to the rehab provider to pay," says David Ross, CPA, director of reimbursement and internal audit for Kessler Rehabilitation Corp. in West Orange, NJ.

This scenario is a possibility, because under PPS rehab facilities are paid a set amount for all care provided to the patient during the inpatient rehab stay. This means that a rehab patient who experiences symptoms of a heart attack or stroke and is sent to the ED may be held in the emergency department for up to 48 hours for observation and never be admitted to an acute care hospital. If this happens, the rehab facility may be responsible for all of the charges associated with that ED visit and observation stay, Ross explains.

Under the rehab PPS interrupted stay criteria, a patient can be gone from the rehab facility for up to three days and then return. Such an interruption results in no additional Medicare payment to the rehab facility, Ross says.

This raises the question of whether the Center for Medicare & Medicaid Services (CMS) in Baltimore intended for rehab facilities to foot the bill for services provided by other health care facilities during a patient’s rehab stay.

The American Medical Rehabilitation Providers Association (AMRPA) in Washington, DC, requested an explanation about this issue from CMS, but the resulting brief letter still leaves the situation ambiguous, Ross says.

AMRPA will review the CMS response and discuss the issue with rehab directors who have expressed concern, says Carolyn Zollar, JD, vice president for government relations for AMRPA.

"To my mind, the sole question of when someone is discharged is still an issue in play here," Zollar says. "It appears in this letter that much of what happens depends on when someone is discharged."

Laurence Wilson, director of the Division of Institutional Post Acute Care for CMS, responded to Zollar’s questions on Aug. 28, 2002, with a letter that states, in part:

"As you know, with the implementation of the IRF PPS, CMS did not change the billing process for payment of ED services or observation beds. Further, under the interrupted stay policy, the date of discharge is key in determining the beginning of an interruption of the inpatient rehabilitation stay."

The letter continues: "The date of discharge should not be determined retrospectively in order to suit a particular billing objective with respect to ED services. If the beneficiary is discharged to receive services and returns to the same IRF on the same day, only the IRF will receive payment. If the beneficiary is discharged to receive services and does not return to the same IRF on the same day (but does return within 3 consecutive calendar days), the IRF receives payment based on the IRF PPS and the acute care hospital receives a DRG-based payment."

Ross says he would like to see CMS revisit this topic by answering questions posed by the full rehab provider community and by expanding on the letter to AMRPA.

Need More Information?
  • David Ross, CPA, Director of Reimbursement and Internal Audit, Kessler Rehabilitation Corp., 300 Executive Drive, Suite 275, West Orange, NJ 07052.
  • Carolyn Zollar, JD, Vice President for Government Relations, American Medical Rehabilitation Providers Association, 1710 N St. NW, Washington, DC 20036. Telephone: (202) 223-1920. Web site: