Starting December 1, 2016, CMS will offer acute care hospitals and critical access hospitals with inpatient status claims appeals who did not take advantage of the previous settlement another opportunity to do so. Claims that are currently at the administrative law judge (ALJ) or Departmental Appeals Board (DAB) are eligible for settlement. An Expression of Interest in this opportunity must be submitted by January 31, 2017.
Previous settlement. The first settlement process involved fee-for-service (FFS) denials for claims submitted for patients who were admitted prior to October 1, 2013. In 2015, CMS paid out about $1.5 billion to 2,000 hospitals, which totaled 68 percent of the net allowable amount for the disputed claims. In exchange, hospitals withdrew their pending claims, alleviating the significant administrative backlog (see Hospital appeals settlement recipients identified by CMS, August 24, 2016).
Second round. This round will allow hospitals to settle their appeals for 66 percent of the net allowable amount. Claims eligible are those denied because a Medicare contractor believed that the treatment was necessary but not on an inpatient basis, and that are either under Level 3 or Level 4 appeal. The claims must still be based on dates of admission prior to October 1, 2013. Certain facilities are not eligible to request a settlement:
- psychiatric hospitals paid under the inpatient psychiatric facilities prospective payment system;
- inpatient rehabilitation facilities;
- long-term care hospitals;
- cancer hospitals; and
- children’s hospitals.
Participation. Hospitals initiate this process by submitting the Expression of Interest. If CMS approves the hospital for participation, the agency generates a spreadsheet of eligible appeals. The hospital validates the information, notifying CMS if there are any discrepancies. During this process, proceedings on all eligible pending appeals will be stayed.
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