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Classification Criteria and Coverage Criteria

An inpatient rehabilitation hospital or an inpatient rehabilitation unit of a hospital is excluded from the IPPS and is eligible for payment under Medicare’s Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) if it meets all of the criteria specified in 42 Code of Federal Regulations (CFR) 412.25 (for units) and 412.29.

Specifically, to be classified for payment under the IRF PPS, at least 60 percent of a facility’s total (all payers, not limited to Medicare) inpatient population must have one or more of 13 conditions listed in 42 CFR 412.29(b)(2).

Inpatient rehabilitation providers must also adhere to Medicare’s Coverage Requirements for determining and documenting the medical necessity of IRF admissions.

Please visit the Centers of Medicare and Medicaid Services webpages for more information:


AMRPA Response to OIG Report on Rehabilitation Hospitals and Units