CMS offers claims backlog relief to acute care, critical access hospitals

By Anthony Brino
09:31 AM

It’s not all that often providers get the chance to make a deal with the feds, but a new approach that the Centers for Medicare and Medicaid Services is taking will enable just that.

Amid a massive backlog of hospital inpatient claims appeals at the Office of Medicare Hearings and Appeals, in fact, CMS is giving providers the chance to settle up and get paid — at least in large part.

Any acute care or critical access hospital willing to withdraw their pending appeals can get “timely partial payment” of 68 percent of the disputed claims’ net allowable amount, CMS said in its latest hospital inpatient review update released late last week.

The agency is encouraging hospitals with inpatient status claims currently in the appeals process “to make use of this administrative agreement mechanism to alleviate the administrative burden of current appeals on both the hospital and Medicare system.”

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Claims that are eligible for CMS’ offer are those currently pending appeals of inpatient-status claim denials by Medicare contractors on the basis that services may have been reasonable and necessary but treatment on an inpatient basis was not, with dates of admissions prior to Oct. 1, 2013.

Hospitals can choose to settle some claims and appeal others. Those that want to appeal should do by Oct. 31, or request an extension.

The settlement option is not available for appeals of claims by psychiatric hospitals, inpatient rehabilitation facilities, long-term care hospitals, cancer hospitals and children's hospitals.

For hospitals with thousands or even millions of dollars worth of claims tied up in appeal, the option of getting paid 68 percent of the claims could be a fair choice — especially when the alternative is spending money on legal fees, waiting years for a judgment and perhaps not get anything.

Some hospital advocates, however, see the new settlement option as a mixed bag.

“We have had some discussions with CMS about a potential resolution to the intractable delays in payment caused by the ALJ work stoppage,” wrote Alicia Mitchell, senior vice president of communications at the American Hospital Association, in an email.

“We recognize CMS's announcement is a direct result of our lawsuit challenging the ALJ delay,” she continued, referring to backlog of appeals waiting for review by Medicare administrative law judges. “The narrow proposal fails to address the underlying cause of the problem — overzealous RAC review.”

[Related: DeSalvo: America 'waiting for us to get interoperability right'.]

CMS said it will review applications for agreements in three steps. Hospitals will submit spreadsheets of the claims and appeals for CMS. After the agency checks its records, hospitals will review any discrepancies, and submit a revised spreadsheet if needed. Hospitals will then get paid, and the appeals will be dismissed.

On Sept. 9, the agency will hold a Medicare Learning Network teleconference to discuss the settlement option.

And as for addressing concerns about overzealous RAC review, CMS leaders are promising to “refine and improve” the Medicare Recovery Audit program in next year’s contracts. Among the changes are a 30-day auditor-provider discussion period before claims can be sent for adjustment and revised additional documentation request limits based on a provider’s denial rate, with lower limits for those with fewer claims denials.

CMS has also pointed out that though still controversial, the two-midnight rule separating inpatient admissions from short stays provided on an outpatient basis may prevent many claims — like the ones in backlog — from being so ambiguous and subject to dispute in the first place.

This article originally appeared on Government Health IT siter site Healthcare Finance News

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