September 4, 2014

CMS Offers Hospitals 68 Percent Solution to Relieve Inpatient Status Claims Backlog

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Seeking to reduce the volume of inpatient status claims pending in the appeals process, the Centers for Medicare & Medicaid Services (CMS) is offering acute-care and critical access hospitals (CAHs) an administrative agreement to resolve their pending appeals or waive their right to request an appeal in exchange for what the agency describes as a “timely partial payment of 68 percent of the net payable amount.”

The CMS announcement was made last Friday as a special e-news edition of “Medicare Learning Network (MLN) Connects.” In the document, CMS “encourages hospitals with patient status claim denials currently in the appeals process to make use of this administrative agreement to alleviate the burden of current appeals on both the hospital and Medicare system.”

A special MLN Connects call is scheduled to take place on Tuesday, Sept. 9 at 1 p.m. EST.

Reaction to the settlement offer was swift and predictable.

“In this very focused proposal to hospitals and CAHs, CMS has recognized the tremendous burden that is placed on these facilities and their cash flow caused by the Administrative Law Judge (ALJ) work stoppage,” Brock Slabach, senior vice president at National Rural Health Association, told RACmonitor. “For rural facilities, the burden is even higher and could be a contributing factor to the now 25 rural hospitals that have closed since Jan. 1, 2013. Yet this all-or-nothing proposal from CMS doesn’t do anything to resolve the systemic issues regarding the excessive and burdensome practices of Recovery Audit Contractors (RACs).”

Healthcare attorney David Glaser sounded a cautionary tone as well as an encouraging note.

“Organizations should base the decision on whether to accept (the) offer in large part based on their approach to appeals,” Glaser told RACmonitor. “Organizations that have appealed most denials, even when they know the appeal is a long shot, may benefit from accepting the offer.” 

However, Glaser cautioned some providers to tread lightly.

“By contrast, organizations that have appealed selectively, and are likely to prevail on most of their cases, should think carefully before agreeing to what is functionally a 32 percent reduction in compensation,” he said.

Ronald Hirsch, MD, vice president of Accretive Physician Advisory Services, indicated that he would be inclined to participate – with specific conditions.

“I’d take the deal for all medical DRGs and for surgical DRGs without a device or implant (where 68 percent of the DRG is far greater than the APC),” Hirsch explained to RACmonitor. “For device/implant cases, I’d withdraw my appeal now before sending in my list of pending claims to CMS and rebill under part B, as that payment seems to exceed the 68 percent and you can still bill the patient for the copay.”

In the end, Hirsch acknowledged that such a decision is still difficult, and not without peril.

“It a tough call,” Hirsch said. “If a lot of hospitals take the offer, the wait time for Administrative Law Judge will drop. But the ALJs seem to be misbehaving, so then it can be a total loss if you risk that.”

More details about the providers and claims eligible for an administrative agreement, as well as the documents needed to request such an agreement, can be found on the CMS Inpatient Hospital Reviews web page.

About the Author

Chuck Buck is the publisher of RACmonitor and executive producer and host of Monitor Mondays.

To comment on this article go to editor@racmonitor.com

Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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