There is no single CPT code for inpatient rehabilitation: Medicare pays the facility one per-discharge amount under the IRF PPS, set by a case-mix group (CMG) from the IRF-PAI, while physicians bill their own visits with hospital inpatient E/M codes such as 99221–99233.
Many coders search for an “inpatient rehab CPT code” after a denial or an audit request, expecting one code that covers the stay. That code does not exist. An inpatient rehabilitation facility (IRF) stay produces two completely different types of claim, and each follows its own rules.
The facility bills an institutional claim (UB-04 or 837I) that carries a HIPPS code, not a list of therapy CPT codes. The rehabilitation physician, and any consultants, bill professional claims (CMS-1500 or 837P) for their face-to-face visits using E/M codes. Therapy CPT codes such as 97110 or 97530 matter only in outpatient settings or in limited Part B situations.
This guide explains how each claim works, the Medicare coverage rules that drive IRF denials (the 60% rule, the 3-hour rule and the new FY 2027 timing rules), and a worked example of a full IRF stay.
Key Takeaways
- Medicare pays IRFs per discharge under the IRF prospective payment system (IRF PPS), not per CPT code or therapy unit.
- The facility claim uses revenue code 0024 with a five-character HIPPS code that starts with A, B, C or D and represents the CMG from the IRF-PAI.
- Physicians bill hospital inpatient E/M codes: 99221–99223 on admission, 99231–99233 for daily visits and 99238–99239 at discharge, selected by medical decision making or total time.
- Coverage depends on Medicare’s IRF coverage criteria: multiple therapy disciplines, about 3 hours of therapy a day at least 5 days a week, rehab physician visits at least 3 days a week, and timely screening, plan of care and team meetings.
- For FY 2027 (from 1 October 2026), CMS finalized a 2.3% payment update and requires all therapies ordered at admission to begin within 36 hours after midnight of the admission day.
Why There Is No Single Inpatient Rehabilitation CPT Code
CPT codes describe professional services and procedures. Medicare does not pay an IRF by adding up those services. Instead, the IRF PPS pays one amount per discharge, based on the patient’s case-mix group. The CMG reflects the patient’s rehabilitation impairment category, functional scores and age, taken from the IRF Patient Assessment Instrument (IRF-PAI).
The base amount is then adjusted for the area wage index and facility factors such as rural location, low-income patient share and teaching status, with high-cost outlier payments for unusually expensive cases. Because the payment is bundled, the therapy, nursing and room charges on the facility claim support cost reporting but do not set the payment.
If you need a refresher on how CPT, HCPCS and ICD-10 fit together, see our rehab medical billing and coding guide, which covers outpatient therapy coding in detail.
Facility vs Physician vs Outpatient Billing Compared
| Setting | Who bills | Claim and key codes | How Medicare pays |
|---|---|---|---|
| IRF facility | The IRF hospital or IRF unit | UB-04/837I, bill type 11X, revenue code 0024 with HIPPS (CMG) code | Per discharge under the IRF PPS |
| IRF physician | Rehab physician, consultants, qualified NPPs | CMS-1500/837P with E/M 99221–99239 | Physician Fee Schedule, per visit |
| Outpatient therapy | Therapy practice, hospital outpatient, rehab agency | Timed CPT codes such as 97110, 97112, 97530 in 15-minute units | Physician Fee Schedule, per unit |
| Skilled nursing facility | The SNF | UB-04 with HIPPS code from the MDS | Per diem under the SNF PPS (PDPM) |
| Acute inpatient | The acute hospital | UB-04 with ICD-10-PCS procedures | Per discharge by MS-DRG under the IPPS |
Do not bill outpatient therapy CPT units for a covered Part A IRF stay. Therapy is part of the IRF PPS payment. Timed-unit rules such as the 8-minute rule apply to outpatient therapy, not to the IRF facility payment.
How the IRF Facility Claim Works
The IRF-PAI drives the payment
Every Medicare Part A fee-for-service patient needs an admission and a discharge IRF-PAI. The admission assessment covers the first 3 days of the stay. CMS’s IRF-PAI manual states that data transmitted more than 27 calendar days after discharge (counting the discharge day as day 1) are considered late. Under Medicare’s IRF-PAI rule, a Medicare fee-for-service claim will not be accepted and processed for payment until the corresponding IRF-PAI has been received and accepted by CMS.
The grouper assigns the CMG from the IRF-PAI. Comorbidities reported with ICD-10-CM codes on the IRF-PAI can place the patient in a comorbidity tier, which is reflected in the first letter of the HIPPS code.
What goes on the UB-04
| Field | What to report |
|---|---|
| Bill type | 111 for admit through discharge; 110 for no-pay; 117 and 118 for adjustments and cancels |
| Revenue code 0024 | The HIPPS code from the IRF-PAI in the HCPCS/rates field (FL 44) |
| Ancillary revenue codes | Room, nursing, therapy (for example 042X physical therapy, 043X occupational therapy, 044X speech-language pathology) and other charges |
| Diagnoses | ICD-10-CM codes that match the impairment and comorbidities documented on the IRF-PAI |
| Interrupted stay | If the patient leaves and returns by midnight of the third consecutive day, it is one stay and one payment; Noridian instructs IRFs to report the interruption days as non-covered with occurrence span code 74 |
When a beneficiary does not qualify for Part A coverage, certain ancillary services may be billed under Part B on a 12X bill type. Our guide on the UB-04 form explains each form locator.
Medicare Coverage Rules Behind Most IRF Denials
Most IRF recoupments are not coding errors. They are coverage findings: the reviewer decides the patient did not need, or the record does not prove, an intensive inpatient rehabilitation program. The rules come from Medicare’s IRF coverage and classification requirements.
The 3-hour rule and therapy timing
Intensity. The patient must need active, ongoing therapy from multiple disciplines, one of which is physical or occupational therapy, generally at least 3 hours a day at least 5 days a week. In well-documented cases, at least 15 hours over a 7-consecutive-day period is acceptable.
Start of therapy (new for FY 2027). All therapy treatments or evaluations ordered at admission must begin within 36 hours after midnight of the admission day.
Physician supervision. A rehabilitation physician must see the patient face to face at least 3 days a week throughout the stay. From the second week, a qualified non-physician practitioner may perform one of the three weekly visits where state law allows.
Required documentation
- Preadmission screening completed within the 48 hours immediately before admission, with documented review and concurrence by a rehabilitation physician.
- An individualized plan of care developed by a rehabilitation physician with team input within 4 days of admission.
- An initial interdisciplinary team meeting within 4 days of admission, then at least once a week after the prior meeting, led by a rehabilitation physician.
- Therapy notes that show minutes, discipline and mode (individual, group, concurrent or co-treatment), matching what is coded on the IRF-PAI.
The 60% rule
The 60% rule is a facility classification requirement, not a claim edit. Under Medicare’s 60% rule, at least 60% of an IRF’s patients over a 12-month period must need intensive rehabilitation for one or more of 13 listed conditions, including stroke, spinal cord injury, brain injury, amputation, hip fracture, major multiple trauma, burns, certain neurological disorders and specified arthritis and joint replacement cases. A facility that falls short can lose IRF classification, so accurate impairment and etiologic diagnosis coding on the IRF-PAI matters beyond any single claim.
Medicare Advantage plans often require prior authorization for IRF admission. CMS rules effective in 2024 require MA plans to apply traditional Medicare coverage criteria, including the IRF criteria, when making medical necessity decisions, so the same documentation supports both.
Physician and Professional Billing in an IRF
The rehabilitation physician (often a physiatrist), consultants and qualified non-physician practitioners bill each visit on a professional claim. Since 2023 these codes are selected by the level of medical decision making or by total time on the date of the encounter; history and examination no longer determine the level.
| CPT code | Service | Time threshold (when billing by time) |
|---|---|---|
| 99221 | Initial hospital inpatient or observation care, straightforward or low MDM | 40 minutes |
| 99222 | Initial care, moderate MDM | 55 minutes |
| 99223 | Initial care, high MDM | 75 minutes |
| 99231 | Subsequent care, straightforward or low MDM | 25 minutes |
| 99232 | Subsequent care, moderate MDM | 35 minutes |
| 99233 | Subsequent care, high MDM | 50 minutes |
| 99238 / 99239 | Discharge day management | 30 minutes or less / more than 30 minutes |
| G0316 | Medicare prolonged inpatient care, each additional 15 minutes | With 99223 from 90 minutes; with 99233 from 65 minutes |
The old prolonged service codes 99354–99357 were deleted in 2023. For Medicare, report G0316 only when the primary visit was selected by time; G0316 cannot be reported with discharge day management codes. Other payers may accept CPT 99418 instead, so check each contract.
Report the place of service that matches the setting. CMS defines POS 61 as a comprehensive inpatient rehabilitation facility; some payers and contractors expect POS 21 for a rehab unit inside an acute hospital, so confirm the rule with your MAC. Our article on POS 21 billing and compliance explains why the facility rate applies to inpatient visits.
Worked Example: A Stroke Patient’s IRF Stay
A Medicare patient is discharged from an acute hospital after an ischemic stroke and admitted to a freestanding IRF on a Monday. Her preadmission screening was completed and approved by the rehab physician on Sunday.
- Admission day. The physiatrist performs the admission evaluation with high-complexity MDM and bills 99223 on a professional claim. PT, OT and SLP evaluations are ordered and all start by Tuesday, inside the 36-hour window.
- Days 1–3. The team completes the admission IRF-PAI, including the impairment group, functional items and ICD-10-CM comorbidities. The initial team meeting and the individualized plan of care are both done by day 4.
- During the stay. The physiatrist sees the patient at least 3 days a week, billing 99231–99233 based on MDM. Therapy is delivered about 3 hours a day, 5 days a week, and documented in minutes. Weekly team meetings continue.
- Discharge. The physician spends 40 minutes on discharge day management and bills 99239. The discharge IRF-PAI is completed and transmitted on time.
- Facility claim. The IRF submits one UB-04 with bill type 111, revenue code 0024 and the HIPPS code from the IRF-PAI, plus ancillary charges. Medicare pays one IRF PPS amount for the stay; no therapy CPT units are billed.
What Changed for FY 2027
| Item | FY 2027 final rule (CMS-1845-F) |
|---|---|
| Payment update | 2.3%: a 3.2% market basket increase minus a 0.9 percentage point productivity adjustment |
| Estimated impact | CMS estimates IRF payments will increase by $340 million in FY 2027 |
| Outlier threshold | Updated to keep outlier payments at 3% of total IRF PPS payments |
| Therapy start | All therapies ordered at admission must begin within 36 hours after midnight of the admission day |
| Team meetings | Initial meeting within 4 days of admission; then at least weekly after the prior meeting |
| Quality reporting | IRFs that fail IRF QRP requirements face a 2 percentage point reduction to their annual increase factor |
Common IRF Billing Errors and How to Prevent Them
- Billing therapy CPT units on a Part A IRF claim instead of relying on the CMG payment.
- Submitting the facility claim before the IRF-PAI has been accepted, or transmitting the IRF-PAI late.
- Impairment group or comorbidity codes on the IRF-PAI that do not match the physician documentation.
- Preadmission screening done more than 48 hours before admission, or without the rehab physician’s documented concurrence.
- Gaps in therapy intensity without a documented clinical reason, or therapy that starts after the 36-hour window.
- Physician E/M levels chosen by habit rather than MDM or time, or the deleted codes 99354–99357 still in the charge master.
When a claim is denied, read the reason and remark codes first; our guide to claim denial causes and fixes explains how to work each type. Professional coders can also audit physician E/M levels through our medical coding services, and hospital-based units can review aging balances with our hospital A/R services.
Running an inpatient rehab unit or physiatry practice and tired of chasing IRF denials? Steady Medical Billing’s rehab billing team reviews documentation, codes physician visits and follows every claim to payment.
Frequently Asked Questions
What is the CPT code for inpatient rehabilitation?
There is none. Medicare pays the inpatient rehabilitation facility one amount per discharge under the IRF PPS, based on a case-mix group reported as a HIPPS code with revenue code 0024. Physicians bill their visits separately with hospital inpatient E/M codes such as 99221 to 99233 and 99238 to 99239.
Can an IRF bill therapy codes like 97110 or 97530?
Not for a covered Medicare Part A stay. Therapy is included in the IRF PPS payment, and therapy minutes are recorded on the IRF-PAI. Timed therapy CPT codes are used for outpatient therapy and in limited Part B situations when the stay is not covered under Part A.
What is the 3-hour rule for inpatient rehab?
Under Medicare’s IRF coverage rules, the patient must generally need at least 3 hours of therapy a day at least 5 days a week from multiple disciplines, one of which is physical or occupational therapy. In well-documented cases, at least 15 hours over 7 consecutive days is acceptable.
What is the 60 percent rule for IRFs?
It is a Medicare facility classification rule. At least 60 percent of an IRF’s patients over a 12-month period must need intensive rehabilitation for one or more of 13 listed conditions, such as stroke, spinal cord injury, brain injury, amputation or hip fracture.
What changed in the FY 2027 IRF PPS final rule?
CMS finalized a 2.3 percent payment update effective 1 October 2026, required all therapies ordered at admission to begin within 36 hours after midnight of the admission day, and required the initial interdisciplinary team meeting within 4 days of admission.
