Medicare Fraud Alert: Inpatient Rehabilitation Hospitals

By the C|C Whistleblower Lawyer Team

A recently-released report from Department of Health and Human Services Office of the Inspector General (HHS-OIG) revealed potentially serious problems related to Medicare beneficiary stays in inpatient rehabilitation hospitals. Such hospitals—either standalone or included as distinct units within general-purpose hospitals—are designed to address the needs of patients who require intensive rehabilitative therapy to recover from injury, illness, or surgery.

Medicare rules include certain eligibility criteria for inpatient rehab hospitals to ensure that Medicare beneficiaries—the majority of whom are aged 65 and older—receive the most appropriate care for their overall condition and specific needs. In general, Medicare will only pay for services, supplies or equipment that are “medically reasonable and necessary.”

In the inpatient rehab context, Medicare rules require providers to certify that a beneficiary requires and can benefit from:

• Intensive physical or occupational rehabilitation consisting of at least three hours per day, five days per week;
• At least one additional type of therapy, such as speech, occupational, or prosthetics/orthotics therapies;
• Full-time access to a rehabilitation doctor, including at least three visits per week; and
• Full-time access to a skilled rehabilitation nurse.

Unfortunately, inpatient rehab hospitals can be fertile ground for fraudulent schemes that not only costs taxpayers money, but also negatively impact patient care. In response to incidental findings of medically unnecessary or unreasonable treatment in such rehab facilities, HHS-OIG contracted with physicians to review medical records for a sample of patients admitted to inpatient rehab hospitals during March 2012. The physicians identified 39 instances in which patients were unable to actively participate in and benefit from intensive therapy. The audit also analyzed claims data to determine whether inpatient rehab hospitals kept these unsuitable patients for extended periods of time.

The results point to significant overpayments for medically unreasonable stays: 32 of 39 patients were not suited for intensive rehab therapy yet remained in inpatient rehab hospitals for extended periods of time, including some who were in very poor condition. HHS-OIG indicates this may just be the tip of the iceberg, warning that an HHS-OIG audit “currently in progress will provide a national assessment of the proportion of inpatient rehab stays that do not comply with all Medicare coverage and documentation criteria.”

Hospitals and others that bill Medicare for healthcare services that are not medically reasonable or necessary can violate the False Claims Act (FCA). If you have information about inappropriate rehab hospital stays or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.

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