CMS Pub. 100-04, ch. 3, § 140.1.2

Units

(Rev. 12575; Issued:04-11-24; Effective: 07-12-24; Implementation: 07-12-24)

In addition to the requirements specified above in §140.1.1, an inpatient rehabilitation unit

shall meet the additional criteria in paragraphs A through M below in order to be excluded

from the IPPS and be paid instead under the IRF PPS.

A. - The inpatient rehabilitation unit must be a part of an institution that has in effect an

agreement to participate as a hospital that is not excluded in its entirety from the IPPS.

B. - The inpatient rehabilitation unit must have written admission criteria that are applied

uniformly to both Medicare and non-Medicare patients.

C. - The inpatient rehabilitation unit must have admission and discharge records that are

separately identified from those of the hospital in which it is located and are readily

retrievable. The record must indicate the dates of the admission and discharge for patients of

the unit. The IRF must also have a process in place to ensure that each patient’s medical

record at the IRF meets the hospital conditions of participation in 42 CFR Part 482 and all of

the documentation requirements specified in 42 CFR §412.622 (a)(3), (4), and (5). Further

guidance on the IRF documentation requirements is available in chapter 1, section 110 of the

Medicare Benefit Policy Manual (Pub. 100-02). The inpatient rehabilitation unit's policies

must provide that necessary clinical information is transferred to the unit when a patient of the

hospital is admitted to the inpatient rehabilitation unit, as described further in chapter 1,

section 110.1.1 of the Medicare Benefit Policy Manual (Pub. 100-02).

D. - If state law provides special licensing requirements for rehabilitation units, the inpatient

rehabilitation unit must be licensed in accordance with the applicable requirements.

E. - The hospital's utilization review plan must include separate standards for the type of care

offered by the inpatient rehabilitation unit.

F. - The beds assigned to the inpatient rehabilitation unit must be physically separate from

(i.e., not co-mingled with) beds not included in the unit. This means that patients from other

parts of the hospital may not be treated in the beds assigned to the inpatient rehabilitation unit.

G. - The hospital must have enough beds not excluded from the IPPS to permit the provision

of adequate cost information. The A/B MAC (A) has discretion as to how to apply generally

accepted accounting principles when making this analysis.

H. - The inpatient rehabilitation unit and the hospital in which it is located must be serviced

by the same A/B MAC (A).

I. - The inpatient rehabilitation unit must be treated as a separate cost center for cost finding

and apportionment purposes.

J. - The accounting system of the hospital in which the inpatient rehabilitation unit is located

must provide for the proper allocation of costs and maintain statistical data that are adequate

to support the basis of allocation.

Compliance with the criteria in items H, I, and J above may be determined based on the

hospital's most recently filed cost report or, if necessary, by the hospital's presentation of

evidence that shows, to the satisfaction of the A/B MAC (A), that the hospital has the

accounting capability to meet these criteria for the cost reporting period for which the

exclusion from the IPPS, if approved, applies.

K. - The cost report for the hospital must include the costs of the inpatient rehabilitation unit,

covering the same fiscal period as the hospital, and use the same method of cost

apportionment as the hospital.

L. - As of the first day of the first cost reporting period for which all other exclusion

requirements are met, the inpatient rehabilitation unit must be fully equipped, staffed, and

must be capable of providing hospital inpatient rehabilitation care regardless of whether there

are any inpatients in the unit on that date.

M. - Each hospital may have only one unit of each type (psychiatric and rehabilitation)

excluded from the IPPS.

The criteria specified in paragraphs A through M above are used to determine whether a part

of a hospital qualifies for exclusion from the IPPS. An excluded unit must be established as a

separate cost entity for cost reporting purposes.

If a hospital wishes to have an IRF unit, it must notify OPOLE and the A/B MAC in writing

of the change at least 30 days before the date of the change currently in regulation at

§ 412.25(c)(1) to allow a hospital to open a new IRF unit anytime within the cost reporting

year. OPOLE will notify the hospital if they approve of the opening or not of the following:

(1) the particular areas that it has designated as the unit, and (2) the square footage and

number of beds in the unit. The A/B MAC (A) or OPOLE will inform the IRF of the proper

procedures. The hospital’s notification of its intent to have a unit excluded from the IPPS

must be sent to the A/B MAC (A) at the same time that it is sent to OPOLE, and it must

identify the designated space for the excluded unit through the use of room numbers and/or

bed numbers. OPOLE will then determine, based on information obtained from the State

Survey Agency and the hospital’s A/B MAC (A), whether the unit qualifies for exclusion

from the IPPS. If OPOLE rejects the hospital’s request to have the unit excluded from the

IPPS, it will notify the A/B MAC (A), CMS, and the hospital. If OPOLE approves the

hospital’s request to have the unit excluded from the IPPS, it will notify the hospital, and will

also notify the A/B MAC (A) of the unit’s exclusion from the IPPS and of the new unit’s

new provider identification number.

The hospital must self-attest that it meets all of the applicable criteria for having a unit that is

excluded from the IPPS. This self-attestation is subject to verification by OPOLE, the State

Agency, and the A/B MAC (A).

After the initial classification as an IRF, changes in the amount of space occupied by the unit,

or in the number of beds in the unit, are allowed to be made one time during a cost reporting

period if the hospital notifies its Medicare contractor and OPOLE in writing of the planned

change at least 30 days before the date of the change. A change in bed size or a change in

square footage may occur at any time during a cost reporting period and must remain in effect

for the remainder of that cost reporting period.