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Medicare Settlement Plan Could Relieve Appeal Backlog

• New CMS Medicare appeals settlement initiatives aim at curtailing nearly three-year backlog of cases
• Forthcoming details could decide amount of dent in backlog

(Bloomberg Law) — A pair of initiatives announced recently by the Centers for Medicare & Medicaid Services could allow the agency to resolve a portion of its gargantuan Medicare administrative appeals backlog.

But although health-care attorneys hope the initiatives will help close some of the cases contributing to the $6.6 billion in disputed Medicare reimbursements, their success will depend largely on how the CMS implements them, they told Bloomberg Law. “The CMS hasn’t really given many details on how they will be applying these, so I will be curious to know what limits, if any, they will place on them,” R. Ross Burris III, a health-care attorney with Polsinelli PC in Atlanta, told Bloomberg Law.

The Medicare appeals backlog has grown so much in recent years that a health-care provider challenging a reimbursement decision may have to wait as long as three years before its reimbursement appeal is finally adjudicated. The backlog has been the subject of multiple lawsuits, including one brought by the American Hospital Association that led a federal court to order the CMS to come up with ways to reduce the backlog.

In the face of this judicial pressure, the CMS Nov. 3 announced two new settlement initiatives aimed at reducing the number of pending appeals. The low-volume appeals settlement option allows providers with fewer than 500 pending appeals and a total billed amount of less than $9,000 per appeal to settle their claims for 62 percent of the net allowed amount. Additionally, the CMS has said it will expand the use of settlement conference facilitation, which is a type of mediation between the health-care providers and the CMS, to arrive at an acceptable settlement value for resolving claims.

Provider Buy-In Required

According to Burris, the settlement initiatives could put a sizable dent in the Medicare backlog if health-care providers determine that it is worth it give up a portion of their claim in return for quicker payment.

“I know that some parties have gone through the process the CMS offered before and came away very pleased with the process, saying it was worth the reduced payment to not have to wait two years,” he said.

However, Burris said, some parties that have participated in settlement conferences with the CMS have come away disappointed with the amounts they were offered.

“It depends on how likely you think you are to get more of your claim repaid by going through the appeals process and how able you are to wait out that process,” he said.

In particular, some attorneys say, the low-volume appeals settlement option will require the most buy-in from health-care providers.

“Any effort to resolve the appeals through an expanded settlement program is always good news for at least some providers, the questions is how many,” Joseph Glazer of the Law Office of Joseph D. Glazer PC in Princeton, N.J., told Bloomberg Law. “As the new settlement option is targeted at certain providers with ‘low-volume appeals,’ HHS will need significant buy-in from those providers to reduce the backlog in any meaningful way through this initiative,” he said.

Denial or Approval of Claims?

Burris said the decision by a health-care provider to seek a settlement will rest prominently on how those settlements are treated by Medicare. “A lot rides on whether Medicare deems the settlement an approval of the charges or a denial of the charges,” he said.

Burris also said health-care providers have to know what kind of precedent they are setting by accepting the settlements. “If you settle your claims and Medicare deems it as a denial of the claim, what kind of precedent are you setting for any future claims that you may have that are of the same type,” he asked.

Further, “If the charges are deemed denied by Medicare, a provider is going to have a much harder time collecting in a secondary payer situation,” he added.

The CMS website that announces the new initiatives urges potential participants to check back for details about the initiatives in coming months. As the CMS answers the questions posed by these attorneys with more detailed information, there should be a clearer view of how much a dent they will put in the backlog.

To contact the reporter on this story: Matthew Loughran in Washington at mloughran@bna.com

To contact the editor responsible for this story: Peyton M. Sturges at PSturges@bna.com

For More Information

The CMS announcement is at http://src.bna.com/ugn.

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The above story appeared in:
Daily Report for Executives
Health Care Daily Report