The CMS is again hoping to clear a backlog of Medicare appeals by offering to pay hospitals a portion of the denied claims if they drop pending appeals.
On Friday, the agency announced that starting Dec. 1, it would provide partial payment, equal to 66% of the net allowable amount of the claim, for pending appeals of denied inpatient stays. Only denied claims with dates of service prior to Oct. 1, 2013, with appeals pending before an administrative law judge or the Medicare Appeals Council are eligible. Hospitals have waited as long as two years before they see responses to their appeals.
Acute-care and critical-access hospitals have until Jan. 31, 2017, to submit an expression of interest.
The CMS made a similar offer in 2014, offering a payout of 68% of the net allowable amount of the claim.
“They are sending a message that if you are waiting to decide to take these payments, the offer is not going to go up,” said attorney Linda Fotheringill, a founding member of Washington & West, a consultancy and claims denial firm.
Under the 2014 Hospital Appeals Settlement Process, the CMS engaged in settlements with 2,022 hospitals, representing approximately 346,000 claims. The agency paid out approximately $1.47 billion.
In exchange for the partial payment, a hospital must withdraw all of its pending administrative appeals for these inpatient denials, and hospitals cannot choose to settle some claims and continue to appeal others.
Experts and insiders for years have called the appeals process flawed, saying the recovery audit contractors that the CMS hired to find inappropriate or over payments have financial incentives to refute payments to hospitals. RACs are paid a fee for every successful audit.
Still others have said the CMS' decision to settle the denials is an opportunity for hospitals to game the system and overwhelm the pipeline with frivolous appeals.
The CMS will host a call on Nov. 16 to provide more details and answer questions on the most recent effort to clear out the backlog.
