Medicare Compliance & Reimbursement

Only two groups of hospitals can apply for this option.

The Centers for Medicare & Medicaid Services (CMS) has a new administrative agreement strategy to ease the procedural burden of current appeals on both acute care and critical access hospitals. Will these changes hasten the Medicare appeals system process and speed up reimbursement?

Background: To swiftly reduce the volume of inpatient status claims currently pending in the appeals process, CMS is now offering an administrative agreement to any hospital ready to pull out the appeals it has submitted that are yet awaiting resolution. CMS in turn would provide timely partial payment (68 percent of the net allowable amount). CMS is encouraging hospitals to make use of this administrative agreement strategy to ease the procedural burden of current appeals on both the hospital and the Medicare appeals system.

Who Can Apply: Two groups of hospitals can apply for the option:

• Acute Care Hospitals, including those paid via Prospective Payment System (PPS), Periodic Interim Payments (PIP), and Maryland waiver; and
• Critical Access Hospitals.

Eligible Claims: Eligible claims are the presently pending appeals of inpatient-status claim denials by Medicare contractors on the grounds that services may have been medically necessary but inpatient admission was not justifiable. Eligibility criteria also requires that:

• Patients should have been admitted prior to October 1, 2013;
• The patient should not be a Part C enrollee.

However, the hospital having multiple appeals would not be able to withdraw on some claims and continue the appeal on other claims. Also, hospitals involved in False Claims Act litigation or investigations are excluded from this opportunity.

Last Date: Hospitals should apply by Oct. 31, 2014 by sending an email to MedicareAppealsSettlement@cms.hhs.gov with requisite documents that you can download from http://cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/InpatientHospitalReviews.html.

You would need to request an extension from CMS if you are not able to meet the deadline.

Follow This 3-Step CMS Review and Validation Process

Round 1: Here is how the process of claims settlement works. As per the CMS inpatient hospital reviews dated Aug. 29, the hospital submits to CMS proposed spreadsheet of eligible claims/appeals along with a signed Administrative Agreement. If CMS validates the information submitted, it will countersign the agreement and provide the payment to the hospital. The appeal stands dismissed. If there is disagreement regarding eligibility, validation will continue on to the second round of review. Appeals will continue to be suspended as the settlement is reviewed.

Round 2: In case of a discrepancy, the hospital resubmits a revised spreadsheet to CMS within two weeks. If validated successfully this time, CMS provides payment within 60 days and the appeals stand dismissed. If not, CMS and the hospital will have a discussion until both parties are in agreement, and a new agreement will be signed for payment and appeal dismissal.

Reconciliation Process: The Administrative Law Judge (ALJ) or Departmental Appeals Board (DAB) later reviews and may identify errors in the agreed upon settlement. “Usually when the DAB is referenced for Medicare it is the Medicare Appeals Council (MAC) that is referenced” shares Duane C. Abbey, Ph.D., president of Abbey and Abbey Consultants Inc., in Ames, IA.

The ALJ and DAB can request that CMS:

• Revoke the payment for claims that were actually ineligible for settlement and were inadvertently included in an agreement; or
• Pay providers the settlement amount for claims pending appeal that were inadvertently omitted from an agreement.

Don’t forget to check the “Frequently Asked Questions” section on the CMS website for your queries about this settlement process. You can also email your questions to MedicareSettlementFAQs@cms.hhs.gov.