10 Things To Consider Before Accepting Medicare’s 68-Percent Settlement Offer

Hospitals have until October 31, 2014, to consider an offer by the Centers for Medicare & Medicaid Services (CMS) to settle pending appeals of denied Medicare claims for 68 percent of the net allowable amount. All acute care hospitals and critical access hospitals with pending appeals are eligible for this program. To be eligible for settlement, a claim must: (i) be Medicare Fee-For-Service (not Medicare Advantage); (ii) have a date of admission that is earlier than October 1, 2013; (iii) have been denied by a Medicare contractor (e.g., RAC, ZPIC or MAC); and (iv) be based on a finding that, while the services may have been reasonable and necessary, provision on an inpatient basis was not. CMS hopes this administrative offer will reduce the number of pending appeals and provide timely partial payment for hospitals' appealed claims.

CMS' settlement offer promises hospitals a guaranteed return on their appeals and a quicker resolution than waiting for their turn in the case backlogs of administrative law judges. On the other hand, hospitals must balance these advantages against the rights they would give up in accepting the settlement. Here are 10 considerations that a hospital should weigh prior to accepting CMS' offer:

Inpatient Status Claims Only. As the settlement applies only to inpatient status denials, it offers hospitals the opportunity to resolve only a segment of its potential claims. Hospitals will need to consider whether the offer will resolve a sufficient number of claims to justify the settlement amount. Relinquishment of Part B Billing Rights. In agreeing to the settlement, a hospital relinquishes the right to bill any eligible services as a Part B claim. If the hospital forgoes the settlement, it may resubmit any upheld denials that are eligible under Part B. Under Part B, the hospital may be able to recoup between 30 and 50 percent of the denied claim. Thus, a hospital must consider whether the settlement still offers a better chance at maximizing its recovery, given its potential ability to resubmit denied claims under Part B. No Interest Payment. Hospitals may be entitled to interest payments on successfully appealed claims. If a hospital participates in the settlement offer, it forfeits its rights to interest payments. Given that a hospital may have a significant number of appeals that have been pending for a number of years, hospitals must balance forfeiting potentially significant, accumulated interest against the value...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT