Looking for land mines on the CORF battlefield

Here are items to consider before joining the fray

Establishing a Comprehensive Outpatient Rehabilitation Facility (CORF) makes sense if your community has a significant Medicare population that seems to be being released from the hospital a little earlier and a little sicker, saysNancy Beckley, MS, MBA, president of the Bloomingdale Consulting Group in Valrico, FL.

"Everybody, not just managed care, is forcing down the length of stay," she says.

Here are some steps you should take if you are considering setting up a CORF:

• Conduct a feasibility study to determine the needs in your community.

— Look at the number of Medicare patients in your community and the number you can expect to serve in the future.

— Look at the types of patients being served.

— Pinpoint the location of existing facilities for Medicare patients.

— Research physician referral sources to see if there is a need for your services.

"You have to have a patient base and strong support from referring physicians in order to succeed. If only 10% of your patients are Medicare patients, a CORF probably is not feasible financially," warns Mimi Stachowski, administration director for ambulatory services at Bryn Mawr Rehabilitation in Malvern, PA. Stachowski implemented 13 CORFs in six states for her previous employer, Dallas-based Milestone Health Care, a contract management company.

• Insert the data from your outpatient records into a CORF cost report (available from the Health Care Financing Administration in Baltimore) to see if you have the number and type of patients that would make a CORF beneficial for your facility, advises Lenore Hersh, director of planning and site development for Casa Colina Centers for Rehabilitation, with headquarters in Pomona, CA.

• Be aware of all Medicare regulations for CORFs. Make sure that compliance will be to your advantage, based on your patient population.

• Analyze thoroughly the advantages and disadvantages of being a certified CORF as opposed to simply revising your outpatient department.

Keep in mind that you will not be paid for social services, nursing, or counseling services for rehab patients unless you establish a CORF.

• Keep up with the changing nature of payers in your community. Determine where Medicare is going under managed care and capitation to make sure you won’t lose money on your charges.

• Know the cost of your services.

• Develop a good method of cost accounting. Medicare will pay for 80% of your costs, with patients picking up the remaining 20% through co-payments.

• Check with state regulators to see if you need to file for a certificate of need to open a CORF. Most states don’t require one.

• Check with your state office for licensing and certifications to see if additional licensing requirements exist.

• Communicate with your Medicare intermediary to make sure your charges are reimbursed. Be aware that the reimbursement regulations for CORF services are open to interpretation by your state’s Medicare intermediary. Interpretations of what can and can’t be reimbursed often vary among intermediaries, Stachowski warns.