Analysis based on CMS's September 25 expansion notice, IRF Review Choice operational guide, official Jurisdiction J service-area page, Alabama Cycle 3 report, and Palmetto GBA's published non-affirmation reasons.
Georgia and Tennessee inpatient rehabilitation facilities have three months to prepare for Medicare claim review on every eligible fee-for-service stay. CMS said September 25 that the IRF Review Choice Demonstration will expand January 1, 2027, to all facilities billing Medicare Administrative Contractor Jurisdiction J, regardless of the state where the building sits. The opening choice is stark: 100% pre-claim review or 100% postpayment review. Facilities that do not choose by December 14 will land in postpayment review. For OT departments, routine therapy records are about to become part of the facility's first-line payment defense.
In brief
- Jurisdiction J IRFs can select 100% pre-claim review or 100% postpayment review from November 13 through December 14; the demonstration begins January 1, 2027.
- CMS says the expansion applies to every IRF that bills Jurisdiction J, regardless of physical location. Jurisdiction J processes Medicare fee-for-service claims for Alabama, Georgia, and Tennessee.
- The review record can include the preadmission screen, plan of care, OT evaluation and skilled notes, proof that therapy began within 36 hours from midnight on admission day, and weekly interdisciplinary-team documentation.
- An IRF that makes no selection is assigned to 100% postpayment review. Compliance is measured in six-month cycles, beginning with an 80% affirmation or approval threshold.
A two-choice opening, with a costly default
Medicare Jurisdiction J covers Alabama, Georgia, and Tennessee under Palmetto GBA. Alabama IRFs have participated in Review Choice since August 2023. The September 25 notice extends the demonstration across the rest of the jurisdiction and reaches any IRF billing Jurisdiction J, even when the facility is physically located elsewhere. Organizations with cross-state billing arrangements should therefore check the Medicare contractor tied to each provider transaction access number, or PTAN.
The selection is made at the PTAN level. Choice 1 places every eligible stay in pre-claim review. Choice 2 pays the claim first and then pulls every claim in the cycle for postpayment review. An IRF that misses the November 13-to-December 14 selection period is automatically assigned to postpayment review.
CMS evaluates performance after six months. A facility meeting the first-cycle 80% affirmation or approval threshold, based on at least 10 requests or claims, can continue pre-claim review or move to selective postpayment or spot-check prepayment review. The threshold rises to 85% in cycle two and 90% in cycle three. A facility below the threshold returns to one of the two full-review choices for another cycle.
Pre-claim review happens while the record is still close
The name can sound like an admission gate. CMS allows an IRF to submit the pre-claim request at any point before the final claim, including after the patient has been admitted. The contractor is expected to communicate an initial decision by telephone within two business days and issue the written decision within 10 business days. A facility can resubmit a non-affirmed request as many times as needed before filing the final claim.
A provisional affirmation gives the facility an early coverage signal and a unique tracking number for the claim. When the final claim matches the affirmed request and all other requirements are met, CMS says it will be excluded from later review by the MAC, Recovery Audit Contractor, and Supplemental Medical Review Contractor absent evidence of fraud or gaming. CERT sampling and program-integrity review can still occur.
Postpayment review reverses the cash-flow sequence. The IRF furnishes care and submits its claim, the contractor processes payment, and an additional-documentation request follows for every eligible claim in the cycle. That route avoids assembling a pre-claim package during the stay, while leaving the facility exposed to later denials and recoupment. Leaders need to model staffing, record-assembly time, and financial risk before choosing.
The OT record sits inside an institutional claim
Medicare's IRF coverage test begins with the expected need for active, ongoing treatment from multiple therapy disciplines, one of which must be physical or occupational therapy. The patient must be stable enough to participate, reasonably expected to benefit from an intensive rehabilitation program, and require rehabilitation-physician supervision. Review Choice enforces those existing standards on every eligible claim in the opening cycle.
The documentation package can begin with a preadmission screen completed or updated within the 48 hours before admission. CMS expects that record to describe prior function, expected improvement, the time needed to reach it, likely complications, anticipated therapies, and the discharge destination. Supporting material may include the history and physical, the plan of care, therapy evaluations, skilled notes, and interdisciplinary-team notes.
OT documentation has several specific jobs in that record. The initial evaluation should show why skilled OT belongs in the intensive program, how the patient's abilities affect daily occupations, what practical improvement is expected, and how the findings connect with the preadmission screen. The file must also support timely therapy initiation: required treatments begin within 36 hours from midnight on the day of admission. CMS lists the initial OT evaluation and subsequent OT notes among the records to submit when applicable.
A polished OT note cannot repair a missing physician requirement or an inaccurate preadmission screen. It can expose a mismatch early. If the screen predicts independence in dressing and kitchen activity while the evaluation documents a different baseline, prognosis, or discharge plan, the team should reconcile the record while the facts are fresh. Weekly conference notes then need to show progress, barriers, and decisions with the applicable therapist present.
Alabama's results show the learning curve
CMS's latest detailed Alabama report covers the third six-month cycle, when the target had reached 90%. Thirteen of 15 participating IRFs chose pre-claim review. Six facilities met the 90% threshold; the other nine finished between 80% and 90%. CMS also reported that participating facilities submitted 17% fewer claims for payment by the end of cycle three than during the six months before the demonstration began.
The report does not establish why claim volume fell or what happened to patient access. The 17% figure should lead facilities to track admissions, referrals declined, short stays, transfers, non-affirmations, resubmissions, final denials, and appeals. A payment-review program can affect behavior before a claim reaches the contractor, and a facility needs its own data to see where that pressure lands.
Palmetto's published top three non-affirmation reasons offer a practical preview. In Alabama's fourth cycle, reviewers most often found that the record did not support the patient's ability to participate in and benefit from intensive rehabilitation, that the preadmission screen lacked a detailed and comprehensive review, or that the record lacked support that the patient was sufficiently stable at admission. Those findings reach across medicine, nursing, case management, and therapy. They call for a shared admission narrative rather than parallel documentation streams.
What IRF OT leaders should do before November
Start by identifying every PTAN that bills Jurisdiction J and the executive who will make the review selection. Put the November 13 opening and December 14 deadline on the compliance calendar. Ask finance to model both choices using claim volume, days in accounts receivable, staffing for document requests, denial exposure, and the likely number of resubmissions.
Run a mock review on a recent group of stays. Read each preadmission screen beside the initial OT, PT, and speech evaluations; the physician record; the four-day plan of care; therapy-start timestamps; and the first interdisciplinary conference note. Look for contradictions in baseline function, participation tolerance, expected benefit, treatment intensity, and discharge destination. Track how long it takes to assemble a clean package without interrupting patient care.
OT teams should tighten the parts they own: objective functional baselines, skilled reasoning, patient-centered goals, response to treatment, barriers, caregiver needs, equipment and environmental demands, and measurable progress with practical value. Review readiness grows from a coherent record of why this patient needs this rehabilitation setting, what the team expects to change, and how the plan is working. January 1 leaves enough time to build that record deliberately.