The CMS has agreed to settle appeals from inpatient rehabilitation facilities regarding denied Medicare claims.
The settlement ends a two-year dispute with the inpatient rehabilitation industry after they were frequently denied Medicare claims for a variety of reasons, including if the patient missed a few minutes of their minimum time for daily therapy. Medicare would only pay for the therapy if beneficiaries participated at least three hours a day.
The agency said it will pay 69% of the net payable amount for most claims currently pending appeal, but some providers will be eligible to receive 100% of the amount denied if the claim was rejected solely because the time threshold wasn't met and a comprehensive review of the therapy's need wasn't performed.
The settlement is available to inpatient rehabilitation providers that filed appeals with the agency prior to Aug. 31, 2018.
In an emailed statement, a CMS official said the settlement option is part of the agency's efforts to reduce provider burden and "to improve and eliminate the backlog in the Medicare appeals process."
The settlement follows a notice from the CMS last March that Medicare contractors can no longer deny a claim solely because the three-hour threshold was missed. Instead, contractors will have to use clinical judgment to determine if inpatient rehab facility services are needed based on a patient's overall needs and treatment.
The CMS will also pay 100% of the net payable amount for providers who were denied claims solely because group therapy was conducted but not documented in the medical record. The CMS also denied claims if it was determined by Medicare contractors the patient didn't require hospital-level therapy services. Those providers may be eligible to receive 69% of the net payable amount if they filed appeals.
The American Medical Rehabilitation Providers Association, which represents more than 650 rehab providers in the U.S., applauded the CMS announcement.
"This settlement is important to our members and the entire rehabilitation provider community by allowing providers to focus more of their resources on delivering care to patients," Richard Kathrins, board chair of the association, said in a statement.
The group estimates the CMS will pay between $180 million to $200 million to inpatient rehabilitation hospitals based on the total net payable amounts. About 340,000 fee-for-service Medicare beneficiaries received care in a rehabilitation hospital or unit in 2017, according to the association.
The CMS is accepting submissions for settlements until Sept. 17.