Inpatient rehabilitation hospitals (IRHs, also known as Inpatient Rehab Facilities/IRFs) provide intensive rehabilitation services to patients on an inpatient basis. Over time, a myth developed – based on a discredited CMS Policy – that patients are appropriate for Medicare-covered IRH care only if they can participate in at least three hours a day of rehabilitative services. The Centers for Medicare & Medicaid Services (CMS) has clarified, once again, that this is not true.
On February 23, 2018, CMS issued a technical direction to Medicare contractors clarifying that reviewers “shall not make absolute claim denials based solely on a threshold of therapy time not being met.” The Transmittal requires that if a patient does not receive three hours of therapy a day (or at least 15 hours of therapy within a 7 consecutive day period), the reviewer,
“shall use clinical review judgment to determine medical necessity of the intensive rehabilitation therapy program based on the individual acts and circumstances of the case, and not on the basis of any threshold of therapy time.” (Emphasis Added.)
The general standard of care in IRHs is individualized (one-on-one) therapy, although some use of group or concurrent therapy is permissible on “a limited basis.”
While this Transmittal is welcome, especially in light of denials of IRH coverage when a patient just misses minutes of therapy in a 7-day period, it is not new information. In 1989, a federal district court in Connecticut issued an Order in Hooper v. Sullivan recognizing the principle that,
“denials of admissions, services, and/or Medicare coverage based upon numerical utilization screens, diagnostic screens, diagnosis, specific treatment norms, the ‘three hour rule,’ or other ‘rules of thumb’ are not appropriate.”
The Hooper Order required the Health Care Financing Administration (now CMS) to revise language in its Medicare Intermediary Manual and Medicare Hospital Manual correcting the misconception about the three-hour criterion and recognizing, instead, that care in an IRH “will be considered medically necessary if the patient requires and receives ‘a more coordinated, intensive program of multiple services than is generally found out of a hospital.’” This is the law.
 https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/InpatientRehab.html. See the Center for Medicare Advocacy’s materials on inpatient rehabilitation hospitals at https://www.medicareadvocacy.org/?s=inpatient+rehabilitation+hospital&op.x=0&op.y=0.
 CMS, “Clarification of Instructions Regarding the Intensive Level of Rehabilitation Therapy services Requirements,” Transmittal 771, Pub 100-08, Medicare Program Integrity Manual (Feb. 23, 2018), https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2018Downloads/R771PI.pdf.
 Hooper v. Sullivan, No. H-80-99(PCD) (D. Conn, Jul. 20, 1989), 1989 West Law 107497, Medicare & Medicaid Guide (CCH) ¶37,985.