CMS Flags a 45 Percent Improper Payment Rate for Medicare Outpatient Rehabilitation Facilities in 2024

Comprehensive outpatient rehabilitation facilities, known as CORFs, provide physical therapy, speech-language pathology, respiratory therapy, and other services to Medicare patients in outpatient settings. A 2024 Medicare fee-for-service improper payment analysis found that 45.4 percent of CORF claims were paid in error, with projected overpayments totaling 10.8 million dollars.

CMS drew attention to the data in its August 20, 2026 Medicare Learning Network newsletter, directing providers to updated compliance guidance. According to the underlying data, insufficient documentation was the cause of 84.3 percent of the errors. Incorrect coding and other factors accounted for the remainder.

To pass a Medicare audit, CORF providers must document each patient's certification, the treating physician's plan of care, and the required frequency and duration of therapy. When those records are incomplete or missing, Medicare may classify a claim as improperly paid and pursue repayment.

The rate places CORFs among the higher error categories tracked in Medicare's annual fee-for-service improper payment data. CMS's online compliance resources for CORF providers include documentation checklists and a summary of the most common billing errors.

For patients, the risk is indirect. Providers subject to audits and repayment demands may face increased scrutiny of their billing, and beneficiaries whose claims are later reviewed could receive coverage denials or requests to verify their eligibility for services received.