Coding at the Inpatient Rehab Facility: It’s Complicated

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  • March 1, 2020
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Coding at the Inpatient Rehab Facility: It’s Complicated

Ensuring both quality data and proper reimbursement at the IRF takes the whole team.

There’s a lot to think about when a patient enters an inpatient rehabilitation facility (IRF). While providing quality care, skilled clinicians must assess the patient’s activities of daily living (ADL) functions in the presence of illness. They must also justify the patient’s etiology for complications and comorbidities in the medical record.

Meanwhile, medical coders must glean support from the clinicians’ documentation to correctly assign specific hierarchical condition category (HCC) codes for risk adjustment (RA). They must also read and comprehend all the hard copy, faxed, or online documents while putting the medical record in chronological order to ensure the impairment codes and minimum data set (MDS) forms match the HCC and RA-scored diagnosis. The HCC code and RA-scored diagnosis ultimately explain to the insurance company the patient’s reason for seeking treatment and ensure the IRF is properly reimbursed.

This all takes time and cooperation from both the clinical and business staff at the IRF.

Documentation Support of Inpatient Rehab Coding

Inpatient rehabilitation patients suffer medical dilemmas ranging from stroke, cancer, serious chronic illness, neurological illness, senility, amputations, or major trauma resulting in temporary or permanent impairments. Inpatient rehab coding involves abstracting the diagnosis code from the history of present illness (HPI), daily progress notes, pre-admission form, post-admission evaluation, consultation, interdisciplinary notations, and (most important) the discharge summary.

The inpatient rehab’s clinical staff are using the documenting method called MEAT (Monitor, Evaluate, Assess, and Treat), along with signing/attesting to the presented clinical facts for each patient’s situation. Many diseases have stages and/or levels. The IRF physicians and clinical support staff must document to prove medical necessity for treating the principal diagnosis on admission (POA), as well as the ongoing comorbidities.

Inpatient rehab coders must use the most detailed HCC codes to reflect the correct coding conventions aligned with the patient’s current illness or injury, ongoing comorbidities, or any complications that develop. As an inpatient rehab coder, you must understand the nuances of various medical records of the HPI, discharge summary, daily progress notes, pre-admission form, MDS form, and most of the payer’s preauthorization rules. You also should peek at the goals and assessment section of the MDS form completed by the nurse coordinator. This section outlines which method the therapists will use to coordinate care with the physician’s order for skilled nursing.

The MDS, usually compiled by the IRF’s nurse coordinator, classifies further clinical assessments of how independently a patient can accomplish activities in six domains: self-care, sphincter control, mobility, locomotion, communication, and social cognition from the physiatrist and therapist. Information gathered from the patient’s HCC earlier, during the concurrent coding process, is then compared, after the physician’s discharge summary, to ensure connection occurs with the medical decision making (MDM), IRF Patient Assessment Instrument (IRF-PAI), and the UB-04 inpatient billing format. More important is to show the treatment and condition of the patient by giving all the details in the whole medical record. Once all these forms have been documented, they must be attested/signed by the patient’s entire care team before billing. 

Impairment Codes, IRF-PAI, MDS Forms

All these codes and factors determine the impaired patient’s functional abilities while maintaining self-care to ensure rehabilitation is funded by the payer. In addition, the coder needs to ensure one of the 17 body system impairment codes listed on field 21 on the IRF-PAI form matches the impairment codes on the preadmission form related to the POA diagnosis given at intake process.

Commercial payers may want the IRF diagnosis codes during intake process for the new rehab patient to coincide with the payer’s prior authorization approvals. All the impairment codes and quality indicators on these different forms should be in sync. This alone is a challenge.

Now include the factors of the case mix group payment model and analysis of IRF stay. The case mix group has four tiers — age, comorbidities, cognitive impairment, and mobility of daily living activities — that require quality indicators for the care received. The IRF-PAI form helps compensate for inpatient care with a predetermined revenue amount from the RA-scored diagnosis related to the rehab patient’s documented treatment. The IRF-PAI form completion and staff documentation supports the case mix, POA diagnosis, HCC-RA ratings for each disease, and associated comorbidities. This is important because if the insurance company wants faxed records, you will need to be able to show support for the HCC codes you selected.

For example: The inpatient rehab patient arrives with phlebitis and thrombophlebitis of the left tibial vein POA. This codes to ICD-10-CM I80.232, HCC 108, and RA 215. The same patient could have comorbidities of type 2 diabetes with hyperglycemia (ICD-10-CM E10.65, HCC 18, and RA 30) and chronic multifocal osteomyelitis of the right shoulder (ICD-10-CM M86.311 and HCC 39). Additionally, ICD-10-CM Z79.4 shows the patient has a current intake of insulin (HCC 19 and RA 31) uses a cane (Z99.2).

The RA scores help calculate payments for the enrollee related to their healthcare history, including disease interactions, demographics, and chronic conditions. However, if the inpatient has two similar diseases with HCC codes, the diagnosis with the higher RA score is used. For example, if the patient has two types of cancer at the same time the cancer with the highest RA score is used. This is called HCC “trumping.”

Team Communication Means Fewer Insurance Denials

Inpatient rehab coding involves reading proper, clear documentation, as well as skillful, accurate, and detailed abstraction of the POA diagnosis code, sequela effects, ongoing comorbidities, forever diagnosis codes, chronic conditions, use of assistive devices, and complications.

Some common denials of inpatient rehab billing can be incorrect diagnosis coding, code sequencing, not understanding how all the details of the ongoing patient stay help coding, forgetting the Excludes1 note, or not getting staff to sign/attest to certain medical documents. Denials also may be due to the wrong diagnosis code being given at the preauthorization process with the payer, poor documentation of types and stages of disease, not adding specific details of assistive devices, or not giving diagnostic history codes of past related illness or demonstrated past risky health behaviors.

These days insurance companies can data mine to check if the national coding conventions are followed. Insurance companies use a rapid processing system to review a provider’s HCC coding for their enrollees. The process is called “sweeps” — the intense scrutiny of data from submitted claims on a yearly basis. The rationale behind sweeps is to audit the provider and create risk pools among their subscribers to determine which method is more cost effective for their care.

In addition, POA diagnosis code information and IRF-PAI impairment codes should be linked to the disease in the same medical body system. When using the UB-04, make sure the IRF-PAI and MDS forms listing diagnosis and impairment codes match according to the patient’s health. The UB-04 inpatient billing claim form has 81 different spaces/fields, but fields 67 and 69 are designated for the POA. The UB-04 has 18 more fields listed for the patient’s diagnostic codes of ongoing illnesses. Most insurance payers review the first nine diagnosis codes related to IRF data of patient care. The UB-04 field 66 A-Q spaces have 10 spaces for the comorbidities taken from the clinical documentation and the IRF-PAI form during the same patient IRF stay. The UB-04 field 72 has three spaces used for external diagnosis codes if this is applicable to the patient’s inpatient rehab stay. The etiology is the main reason for care of the patient; this must match one of the 17 impairment codes on the IRF-PAI form. The remaining illnesses go on the IRF form in conjunction with the UB-04 billing format.

Teamwork Is Required

There’s a required thought process and cooperation among staff to get correct, complete documents required for proper reimbursement. This includes documenting and consenting of preadmission forms completed within 48 hours, collecting past medical records from other facilities, doctor’s evaluation and medication forms reviewed and signed with 24 hours of admission, physical therapy intensity notations, plan of care, and IRF-PAI and MDS forms linked with impairment codes. Collaboration among staff is important to ensure quality care while lessening denials and increasing revenue for the IRF’s bottom line.


Poe Bernard, Sheri. “Risk Adjustment Documentation & Coding,” AMA (2018)

Bassett, Mike. “The Here and Now on POA Indicators,” For the Record. Vol. 28, No. 2, p 50 (Feb 2016)

CMS, IRF PAI Regulations.

Lawrence, Daniel. “Many Inpatient Rehabilitation Facility Stays Did Not Meet Medicare Coverage and Documentation Requirements,” Office of Inspector General (Sept 2018)

Phillips, Angela. “IRF Count Down Continues. Are You Ready?” RAC Monitor (April 10, 2019)

Phillips, Angela. “IRF Count Down Continues: Part II,” RAC Monitor (June 19, 2019)

Stonemetz, J. “Financial Impact of Concurrent Coding.” (Oct 2009)

Sturgeon, Judy. “The Mechanics of the Inpatient Chart Review,” For The Record, Vol. 22, No. 12, p. 14. (June 21, 2010).

Certified Inpatient Coder CIC

T Thivierge
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Tamara Thivierge, MHA, CPC, is a certified medical coder with over 25 years of broad professional history in diverse settings, including inpatient rehab, behavioral health center, family physicians, and auditing with an insurance payer. She has also led workshops on billing in the Hampton Roads, Va., area.

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