CORF Services may consist of physician services, physical and occupational therapy services, speech pathology services, respiratory services, prosthetic or orthotic devices and related services, social and psychological services, drugs and biologicals, vaccines and supplies, appliances and equipment. Any of these services may be provided provided a physician first certifies the medical necessity of skilled rehabilitation services and establishes a plan of treatment in accordance with 42 CFR §410.105. The 2008 Regulations are intended to do the following:

1.          Distinguish the types of physician services which are comprehensive outpatient rehabilitation facility (CORF) services provided by a physician and, therefore, included within the CORF reimbursement, from physician services which are separate medical or surgical physician services and therefore not included within CORF reimbursement but are separately billable;

2.          Coordinate the regulations with the existing fee schedule reimbursement structure;

3.          Revise the conditions for coverage; and

4.          Clarify the coverage of nursing services, drugs and biologicals, and vaccines.


1.          Statute: The distinction is based upon the statutory language of 42 USC §1395x(cc)(1)(2), which defines CORF services and CORF. The definition of services includes physician services but is not intended to cover typical outpatient or inpatient physician services.

2.         Regulations: The 2008 Regulations distinguish between types of services. 42 CFR §414.100(a) specifically provides that CORF physician services are administrative in nature and that diagnostic and therapeutic physician services are not CORF services, but (if otherwise covered) would be separately reimbursable under part 414.

a.         Physician Services are defined in 42 USC §1395x(q) as surgical and medical or consultative services. 

b.         CORF services are defined in 42 USC §1395x(cc) to exclude any services which would not be covered if provided to an inpatient at a hospital facility.

c.         42 USC §1395x(b)(4) defines hospital inpatient services and specifically excludes medical or surgical services provided by physicians (including residents or interns) certified nurse midwives, certified registered nurse anesthetists, and psychologists.


42 CFR §414.1105 defines the payment mechanism for CORF services, which has been in effect since 1999 when CORF reimbursement was changed from cost-based reimbursement to physician fee schedule reimbursement. 

1.         Section 414.1105(b) specifically states that there will be no separate payment for physician services that are CORF services (physician/administration services).

2.         All other services are paid pursuant to the physician fee schedule pursuant to Section 414.1105(a) which states, that CORF services will be paid at the lesser of 80% of the following:

            a.         The actual charge for the item or services; or

b.         The non-facility amount determined under the physician fee schedule established under Section 1848(b) of the act for the item or service.

That reference is to Section 1848 of the Social Security Act, i.e., 42 USC

§1395w-4, which established the Medicare RB-RVS physician fee schedule in 1992.

3.          Supplies and durable medical equipment that are CORF services under 42 CFR §410.100(f), orthotic devices that are CORF services under 42 CFR §410.100(g), and drugs and biologicals that are CORF services at the lesser of eighty percent (80%) of either (1) actual charge or (2) the DMEPOS fee schedule.

a.         Prosthetic devices are devices that replace all or part of an organ or body member but exclude dental and renal dialysis machines.

b.         Orthotic devices include orthopedic devices and services reasonably necessary to effectuate their use.

c.         Drugs and biologicals are those prescribed by a physician and not otherwise excluded from Part B coverage.


CMS has revised the coverage requirements of 42 CFR §410.105 to clarify that all services provided must be necessary for the rehabilitation of the patient, allows certain home services, and extends the review period to 90 days instead of 60 days, except for respiratory services. 42 CFR §410.105(c)(1)(ii) now requires that treatment plan to:

1.        Indicate the diagnosis and rehabilitation goals;

2.        Prescribe the type, amount, frequency and duration of the skilled rehabilitation services, including PT, OT, speech and respiratory therapy; and

3.        Indicate the other CORF services to be furnished that relate directly to such rehabilitation goals.