CMS clarifies short-stay claims settlement offer

The Centers for Medicare & Medicaid Services has issued an update on its settlement process with providers regarding disputed short-term hospital claims.

In late August, CMS announced it would offer to settle the claims in dispute by paying hospitals with disputed claims 68 cents on the dollar. There are as many as 800,000 such claims in dispute clogging the already burdened claims system, and 90 percent of hospitals disputing a claim are waiting 120 days or longer for hearings in front of a federal administrative law judge, where they have the best chance of prevailing.

Short-stay hospital claims have been a sore spot for disputes, with some recovery audit contractors (RACs) denying them because they claim the care should have been rendered in the significantly less expensive outpatient setting.

CMS now states that providers may request a "potential list" of claims that may be eligible under the settlement before deciding to move forward, according to an extensive "frequently asked questions" section posted on the CMS website earlier this week. The list would be processed within two business days of the request submission. Providers have 14 days to accept a settlement offer after receiving the list.

The agency also informed hospitals that any claims in dispute that involve a patient admission will not affect the patient's admission status. Medicare will not pay for skilled nursing facility (SNF) care if a patient is transferred to a SNF without being admitted as a hospital inpatient.

CMS also said it would not use the settlements against a provider's additional documentation requests from RACs.

CMS also confirmed that it does not intend to distribute copies of specific settlements with providers, "but it cannot guarantee complete confidentiality. CMS may be required to disclose copies of executed Administrative Agreements in response to a lawful request."

To learn more:
- read the CMS FAQ list (.pdf)

Related Articles:
CMS offers to settle disputed short-term hospital claims
RAC appeals backlog continues to grow
Hospitals push to clear RAC appeals backlog
Hospitals, auditors clash over RAC reform
Hospitals face increased RAC activity, denials

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