The Centers for Medicare & Medicaid Services (CMS) reached a settlement with inpatient rehabilitation facilities (IRFs) in disputes over denied Medicare claims to allow those hospitals to settle denied claims at almost any level of administrative appeal, it was announced Tuesday.
It marks the end to a two-year negotiation period between inpatient rehab hospitals and CMS.
Under the settlement, CMS agreed to pay:
- 100% of the net payable amount for all IRF appeals in which the claim was denied based solely on a threshold of therapy time (such as the three-hour rule).
- 100% of the net payable amount for all IRF appeals in which the claim was denied solely because justification for group therapy was not documented in the medical record.
CMS agreed to pay 69% of the net payable amount for all claims associated with pending IRF appeals that do not otherwise meet the special criteria above.
CMS must also pay all claims within 180 days of a fully executed settlement agreement or incur interest. To qualify for the settlement, an eligible claim must have been denied by a CMS contractor and appealed on or before August 31, 2018.
As of the settlement date, the appeal must still be pending at one of the four levels of administrative appeal. Extrapolations of denials and Office of Inspector General denials are exempt from the settlement.
The global settlement represents the highest percentage ever offered by CMS, according to the American Medical Rehabilitation Providers Association (AMRPA), which was an active participant in the negotiation process.
“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,” said Richard Kathrins, chair of the AMRPA board of directors, in a statement. “In addition, we feel the generous terms of this settlement are a testament to the millions of patients that have had their livelihoods restored or significantly improved through the care delivered by our providers."
The Federation of American Hospitals (FAH) was also involved in the negotiations and praised the terms from CMS.
“CMS’s voluntary settlement offer to the inpatient rehabilitation community regarding claims stuck in the Medicare appeals backlog is a positive step forward," FAH President and CEO Chip Kahn said in a statement. “We appreciate partnering with CMS to achieve fair outcomes for the Medicare program, inpatient rehabilitation hospitals, and the patients who benefit from the unique intensive therapeutic care they provide.”