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Written by: Darlene D'Altorio-Jones (1959-2015) on Sunday, August 19, 2012 Posted in: Inpatient Rehab

I recently heard “chatter” about the new ”ten-days from discharge penalty” window for assessing a 25 percent late fee for IRF PAIs submitted to CMS in a non-timely fashion.  This is huge, how did that get past me I thought.

As you can imagine, this made me scurry to as many references as possible to see how this could possibly be true.  I didn’t have to look very far before I figured out why there was confusion.  When reviewing the discharge and transmission timelines, the instructions are found in several places (CFR Title 42, Section 412.610 & 412.614, the Medicare Claims Processing Manual Chapter 3, Section 140.3.4 and where most of the clinical staff review the schedule, in the IRF PAI Manual itself.  Unfortunately, the description language, when comparing the various references side-by- -side may lead you to believe there was a change, or  that is does not list the same schedule.   It’s the description that might be hard to follow.   In fact, there is no change advised Susanne Seagrave, Ph.D., Inpatient Rehab Team Lead, Centers for Medicare & Medicaid Services.  She provided a clear example in an email to me dated 08/06/2012.

“The IRF actually has 27 calendar days from (and including) the day of discharge to transmit the IRF-PAI to CMS without incurring a payment penalty.  On the 28th day, a 25 percent payment penalty will be assessed on the claim.  The timeline is as follows:

Day 1 – Day of Discharge, per §412.610(c)(2)(ii)

Day 2

Day 3

Day 4

Day 5 – Completion Deadline, per §412.610(c)(2)(i)(B)

Day 6

Day 7

Day 8

Day 9

Day 10

Day 11 – Encoding Deadline, per §412.610(d)

Day 12

Day 13

Day 14

Day 15

Day 16

Day 17 – Transmission Deadline, per §412.614(c)

Day 18

Day 19

Day 20

Day 21

Day 22

Day 23

Day 24

Day 25

Day 26

Day 27 – Last day of 10 day grace period specified in §412.614(d)(ii)

Day 28 – The first day the 25% payment penalty will begin being assessed on the claim

I hope this is helpful.  The confusion might arise because there are two different 7-day periods here, one between the completion and the encoding deadlines and another 7-day period between the encoding deadline and the transmission deadline.  I think listing out the actual days makes it simpler to understand,” Susanne noted.

I personally found it helpful that the above example was started on calendar day 1 as Susanne has done.  The IRF PAI Manual demonstrates this exact schedule on page II-4 using Oct. 16, 2011 as the discharge date.  I have included date counts in red to help align this example with the one that Susanne provided.


It’s quite important to understand the date of discharge, when the IRF PAI must be completed, encoded and transmitted. The additional ten days is a grace period in the event the original transmission deadline is not met.  This is not from the discharge date, but rather from the original transmit deadline day; day 17. If transmission is not accomplished by day 28 counting the discharge date, the 25 percent penalty is imposed.   Finally, don’t forget to include the IRF PAI in the medical record and be sure to communicate the date of transmission to your billing department so they can include this date on the uniform bill to validate timeliness of transmission.

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