Inpatient Rehabilitation Facility Review Choice Demonstration: The Basics

On May 15, 2023, the Centers for Medicare & Medicaid Services (CMS) announced information on the implementation of a RCD demonstration for IRF services, to offer more flexibility and choice for providers, as well as a risk-based approach to reward providers that show compliance with Medicare IRF policies and guidelines. 

The demonstration will help make sure that payments for IRF services are appropriate through either pre-claim or post payment review; thereby working towards the prevention and identification of potential fraud, waste, and abuse, the protection of Medicare Trust Funds from improper payments, and the reduction of Medicare appeals. CMS expects that creating a review choice process will ensure that Medicare coverage and documentation requirements are likely met.

The RCD for IRF services will give providers in the demonstration states an initial choice of two options:

1. Choice 1: Pre-Claim Review (PCR), or
2. Choice 2: Post Payment Review 

IRFs who do not actively select one of the initial two review choices will be automatically assigned to participate in Choice 2: Postpayment Review.

IRFs will have until two weeks prior to the start of the demonstration in their state to make their choice selection. IRFs can make their selection by utilizing the Palmetto GBA eServices online provider portal. IRFs may select from one of the two review choices available to them. Be sure to read each choice thoroughly prior to making a selection.

IRFs will be evaluated for 6 months. If the full affirmation rate or claim approval meets the target rate or greater (based on a minimum of 10 submitted pre-claim review requests or claims) in the first cycle, the IRF may select one of the three subsequent review choices:

• Choice 1: Pre-Claim Review,
• Choice 3: Selective Postpayment Review, or
• Choice 4: Spot Check Review

IRFs that do not actively choose one of the subsequent review options will automatically be assigned to participate in Choice 3: Selective Postpayment Review.

If the IRF’s rate is less than the target affirmation rate or they have not submitted at least 10 requests/claims, the IRF must again choose from one of the initial two options.

An IRF’s target affirmation rate is based on the following sliding scale from the time an IRF starts the demonstration:

• Cycle 1: 80% affirmation rate
• Cycle 2: 85% affirmation rate
• Cycle 3: 90% affirmation rate 

Cycle Dates: 

• Cycle 1 Choice Selection Period: 7/7/23-8/6/23
• Cycle 1 Review Dates: 8/21/23 – 2/29/24
• Cycle 1 Results Letters Generated: 3/1/24-3/31/24
• Cycle 2 Choice Selection Period: 4/1/24 – 4/15/24
• Cycle 2 Review Dates: 5/1/24 – 10/31/24

The demonstration will begin for IRFs who are physically located in Alabama and bill to Palmetto GBA’s Jurisdiction J (JJ) A/B Medicare Administrative Contractor (MAC), then expand to Pennsylvania, Texas, and California. After the initial four states, CMS will expand the demonstration to include the IRFs that bill to and/or are in MAC jurisdictions J, L, H, and E.

Related Links     

• IRF RCD Operational Guide (PDF)
• IRF RCD Flow Chart (PDF)
• Review Choice Demonstration for Inpatient Rehabilitation Facility Services