Inpatient Providers Settle Payment Dispute with CMS over Medicare Claims

The Centers for Medicare & Medicaid Services (CMS) has ended a two-year dispute settling appeals from inpatient rehabilitation facilities (IRF) over Medicare claims that were denied.

The agency has agreed to pay 69 percent of the net payable amount for most claims that are pending appeal before the Medicare Administrative Contractor (MAC), the Qualified Independent Contractor (QIC), the Office of Medicare Hearings and Appeals (OMHA) and/or Medicare Appeals Council (Council) levels of review.

CMS will pay 100 percent of the net payable amount for all IRF appeals in which the claim was denied based solely on a threshold of therapy time not being met where the claim did not undergo more comprehensive review for medical necessity of the intensive rehabilitation therapy program based on the individual facts of the case and also when the claim was denied solely because justification for group therapy was not documented in the medical record.

The settlement is available to those IRF providers that filed appeals before Aug. 31, 2018 and requires IRF providers to settle ALL eligible claims. The appellant cannot choose to settle some appeals and not settle others.

If the appeal is no longer pending, but eligible for further appeal, CMS will include those as well.

The settlement excludes extrapolated denials and Medicare claims denied by the Health and Human Services Office of Inspector General.

For its part, CMS must pay within 180 days of a fully executed settlement. If CMS does not pay within that time frame, then interest will accrue.

The settlement is voluntary. An IRF may decide instead to await a decision from an ALJ or during other levels of the appeals process. At any time prior to signing the agreement, the appellant can withdraw from the settlement process and will retain their full appeal rights.

The settlement is being touted as the highest percentage recovery to date of any CMS global settlement and a positive step forward in moving claims stuck in the Medicare appeals backlog.

It is estimated that CMS will pay between $180 million to $200 million to inpatient rehabilitation hospitals based on the total net payable amounts, according to the American Medical Rehabilitation Providers Association, which represents more than 650 rehabilitation providers in the U.S

CMS has said it will accept submissions for settlements until September 17. You can read more about the settlement agreement here and how to participate in the process.

The Health Law Offices of Anthony C. Vitale can assist IRF providers in negotiating CMS settlements and advise them of their rights, duties and obligations in resolving such settlements.  Give us a call at 305-358-4500 or send an email to and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale