CMS offers plan (again) in hopes of clearing Medicare appeals backlog

Hospital executives who are tired of waiting for their Medicare appeals cases to be settled are being presented with an option. The Centers for Medicare and Medicaid is offering to pay hospitals 66 percent of the net allowable for short-term inpatient stays in exchange for dropping their pending appeals of denied claims.

CMS recently announced that beginning December 1, it will make available an administrative settlement process for inpatient status claims. This process will be open to eligible hospitals willing to withdraw certain pending appeals in exchange for timely partial payment.

The move is intended to make a dent in the Medicare appeals backlog, which according to the Department of Health and Human Services, grew to nearly 900,000 at the end of last year.

CMS made a similar offer in 2014, at which time it completed settlements with 2,022 hospitals, representing approximately 346,000 claims. CMS paid approximately $1.47 billion to providers that agreed to the settlement process. However, it also paid out 68 percent of hospital claims, less than this time around.

CMS has indicated four main reasons for the backlog:

• An increase in the number of beneficiaries
• Updates and changes to Medicare and Medicaid coverage and payment rules
• Growth in appeals from state Medicaid agencies
• National implementation of the Medicare Recovery Audit Contractor Program

The deadline to submit an Expression of Interest is Jan. 31, 2017.

It’s important to note that only acute care hospitals, including those paid via Prospective Payment System (PPS), Periodic Interim Payments (PIP), and Maryland waiver; and critical access hospitals are eligible to participate.

The following facility types are NOT eligible to submit a settlement request:

• Psychiatric Hospitals paid under the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS)
• Inpatient Rehabilitation Facilities
• Long-Term Care Hospitals
• Cancer Hospitals
• Children’s Hospitals

To be considered an eligible claim, it must have been denied by a Medicare contractor on the basis that services may have been reasonable and necessary, but that treatment on an inpatient basis was not; that are either under appeal at Level 3 or Level 4 or within their administrative timeframe to request an appeal review; and with dates of admissions prior to October 1, 2013, and where the patient was not a Part C enrollee.

Want to know more? CMS will conduct a call on Nov. 16 to offer more details on the settlement process.

The Health Law Offices of Anthony C. Vitale The firm can assist hospitals with completing the Expression of Interest forms as well as negotiating settlement terms with CMS. For more information contact us at 305-358-4500.