Rehabilitation Hospital Services

• When does Medicare cover Rehabilitation Hospital care?
• How can a treating physician assist me in obtaining Medicare coverage for Rehabilitation Hospital services?

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Quick Screen – When should Medicare Coverage be Available for Inpatient Hospital Rehabilitation

Medicare claims for inpatient hospital rehabilitation are suitable for Medicare coverage, and for appeal if they have been denied, if they meet the following criteria:

1. The patient’s physician certifies that inpatient hospitalization for rehabilitation is medically necessary; and
2. The patient requires a relatively intense, multidisciplinary rehabilitation program; and
3. The rehabilitation program is provided by a coordinated, multidisciplinary team; and
4. The goal of the rehabilitation program is to upgrade the patient’s ability to function as independently as possible; and
5. The care is provided in a Medicare certified facility which has 24 hour a day availability of a physician.

Advocacy Tips:

1. Resist arbitrary caps on coverage. For example, don’t accept assertions that Medicare coverage cannot be gained if the patient needs less than 3 hours per day of physical and occupational therapy, or that hospital rehabilitation for certain conditions (ie. below the knee amputations or upper extremity paralysis) is not coverable.  The Medicare statute and regulations include no such restrictions.  In practice, administrative law judges will grant coverage if it can be shown that the patient needed a multidisciplinary, coordinated rehabilitation program provided by a team of professionals which was not actually available at a skilled nursing facility or on an outpatient basis.
2. It will be helpful to succeed on appeal if the patient needs close medical supervision (i.e. 24 hour a day availability of a physician and/or nurse with training or experience in rehabilitation).
3. The care need not be expected to return the patient to his/her prior level of function.  It is sufficient if the goal and result are for the patient to adapt to his/her disability and/or make progress that is of practical value to the individual.
4. The patient’s attending physician is always the key to obtaining Medicare benefits.  If possible, obtain a statement from the physician explaining why inpatient hospital rehabilitation is medically necessary and that the needed rehabilitation program is not actually available at a skilled nursing facility or on an outpatient basis.
5. Don’t be satisfied with a Medicare determination unreasonably limiting coverage and don’t allow the patient to forego medically necessary care.  Appeal for the benefits the patient deserves.  It will take some time but benefits will probably be won in the end.

The Inpatient Hospital Rehabilitation Benefit

Medicare coverage for hospitalization includes payment for the services generally available in a hospital; bed and board, nursing services and other related services, use of hospital facilities, medical social services, drugs, supplies, and equipment, diagnostic or therapeutic items or services and medical or surgical services provided by certain interns and residents. Section 1361 of the Medicare Act, 42 U.S.C. Section 1395x(e), specifically defines hospitals to include institutions which provide rehabilitation as well as care for an acute illness. Under this section of the Act hospitals are defined to include institutions which provide “therapeutic services for medical diagnosis, treatment and care of injured, disabled, or sick persons, or rehabilitation services for the rehabilitation of injured, disabled, or sick persons.”

Coverage Criteria And Appeal Rights

There are certain requirements that must be met in order for a patient to receive Medicare coverage for inpatient hospital rehabilitation. These requirements include:

• The physician must certify that the patient needs inpatient hospitalization for rehabilitation.
• The hospital must be a Medicare certified facility.
• The inpatient must require relatively intense, multi-disciplinary rehabilitation provided by a coordinated team of physical therapists, occupational therapists, speech language pathologists, nurses and/or other professionals supervised by a physician with experience or training in rehabilitation medicine.
• The care must be reasonable and necessary and not actually available at a lower level of care.

Historically, the Medicare administration, has restrictively interpreted these coverage requirements and unfairly denied or limited coverage for patients with certain diagnoses (i.e. below the knee amputees) or with certain treatment plans (i.e. less than 3 hours per day of physical and occupational therapy). Coverage for inpatient hospital rehabilitation has, therefore, often been erroneously denied.  However, appeals of inpatient hospital rehabilitation denials are often eventually sucessful.

Articles and Updates

• CMS Revises Inpatient Rehabilitation Facility “Review Choice Demonstration” – Confirming Individual Assessments Must be Used to Adjudicate Claims July 27, 2023
• CMA Comments on CY 2022 HH Prospective Payment System & More August 5, 2021
• Patients Need Therapy – Medicare Payment Systems Create Barriers December 12, 2019
• New Fact Sheet Available – Medicare Inpatient Rehabilitation Hospital/Facility Coverage In Light of Jimmo v. Sebelius April 11, 2019
• CMS Clarifies 3-Hour “Rule” Should Not Preclude Medicare-Covered Inpatient Rehabilitation Hospital Care March 15, 2018
• Value of Inpatient Rehabilitation Hospital Care Reaffirmed May 18, 2016
• Saga of an Inpatient Hospital Appeal: Notice and Use of Lifetime Reserve Days and Comments on Observation Status May 21, 2015
• No Site Neutral Payments for Inpatient Rehabilitation Facilities and Skilled Nursing Facilities December 11, 2014
• Inpatient Rehabilitation Facilities and Skilled Nursing facilities: Vive La Difference! July 31, 2014

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