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HHS indicates it cannot eliminate Medicare appeals backlog by the end of 2020

Date: March 10

In a status report filed with the U.S. District Court for the District of Columbia HHS indicated that “although the initiatives undertaken by HHS have significantly slowed the growth of the backlog, the significant annual reductions that this court has directed are not possible given current funding and legislative authorities.” The court directive, issued on December 5, 2016 by Judge James Boasberg, ordered HHS to incrementally reduce the backlog of 657,955 appeals pending before the agency’s Office of Medicare Hearings and Appeals (OMHA) over the next four years. The order mandated a 30% reduction in the backlog by December 31, 2017, 60% reduction by December 31, 2018, 90% reduction by December 31, 2019 and 100% by December 31, 2020.

In the newly filed status report HHS indicates that as of March 5, 2017 there are 667,326 pending appeals at the OMHA. HHS projects the number of pending appeals to be 687,382 by the end of FY 2017 (September 30, 2017), 714,347 by the end of FY 2018 (September 30, 2018), 788,493 by the end of FY 2019 (September 30, 2019), 882,437 by the end of FY 2020 (September 30, 2020), and 1,009,768 by the end of FY 2021 (September 30, 2021).

District Court Orders HHS to Eliminate Medicare Appeals Backlog

Date: December 8

On Monday, in an opinion issued by Judge James Boasberg, the U.S. District Court for the District of Columbia ordered the Department of Health and Human Services (HHS) to clear its backlog of Medicare reimbursement appeals by the end of 2020. Judge Boasberg’s opinion granted a motion for summary judgment filed by the American Hospital Association in American Hospital Association v. Burwell (14-851).

Commending the AHA for offering a “thoughtful and reasonable four-year plan,” Judge Boasberg’s opinion adopts the deadlines and mandatory-percentage reductions put forth by the AHA; 30% reduction by December 31, 2017, 60% reduction by December 31, 2018, 90% reduction by December 31, 2019 and 100% by December 31, 2020. The final point in AHA proposed plan, a requirement to grant default judgment in favor of claimants for appeals still pending at the ALJ level on January 1, 2021 without a hearing for more than one calendar year, raised concerns for the court and was not included in the order.  The judge’s order requires HHS file status reports with the court every 90 days.

Opportunity for Reimbursement from UHCIC

Date: November 21

On March 29, 2013 the Florida Department of Financial Services issued a “Notice to Medical Providers” regarding the liquidation of Universal Health Care, Inc. (UHC) and Universal Health Care Insurance Company, Inc. (UHCIC). The Notice was sent to providers whose records indicated they “may have provided medical services” to members/policyholders of UHC and UHCIC. If you have any denied claims for UHCIC it may not be too late to get paid for those claims.  Although the Proofs of Claim deadline was in 2014, we believe that we can file late claims for a limited period of time, until approximately November 30, 2016. If you have any claims denied by UHCIC with service dates between 02/01/2012 and 03/31/2013, we would be happy to pursue them on your behalf.

The Receiver has announced that Class 2 medical providers (i.e. those for whom Proofs of Claim were filed by the 6/30/14 deadline) will be paid in full at 100% of the claim pricing, and will be paid prior to any remaining class of creditor. Providers with late filed claims will be Class 8 creditors (not Class 2 priority). However, based on the published financial statements of the Receivership, it is expected that Class 8 creditors will also be paid in full at 100% of claims pricing. We are aware of providers who are expected to receive large payments on aged claims that were written off years agoWe can pursue any denied or underpaid UHCIC claims dating from 02/01/2012 through 03/31/2013, and medical providers are expected to be paid in full at 100% of the of claim pricing.

If you choose to pursue this opportunity please contact us at (410) 296-5192 or email Gail Robinson at g.robinson@washingtonwest.com.

 

CMS Posts 2016 Hospital Appeals Settlement Details

Date: November 3

Today, the Centers for Medicare and Medicaid Services (CMS) posted the highly-anticipated details of the 2016 Hospital Appeals Settlement. Beginning December 1, 2016, CMS will make available an administrative settlement process for inpatient status claims. This process will be open to eligible hospitals willing to withdraw certain pending appeals in exchange for timely partial payment (66% of the net allowable amount). CMS is encouraging hospitals with inpatient status claims currently in the appeals process at the Administrative Law Judge (ALJ) level or the Departmental Appeals Board level to consider utilizing the proposed settlement process. To request participation in the process, hospitals must complete an Expression of Interest and submit it to MedicareAppealsSettlement@cms.hhs.gov. The deadline for hospitals to submit their Expression of Interest is January 31, 2017.

The facility types eligible for the settlement are:

  • Acute Care Hospitals, including those paid via Prospective Payment System (PPS), Periodic Interim Payments (PIP), and Maryland waiver; and
  • Critical Access Hospitals.

Psychiatric Hospitals paid under the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS), Inpatient Rehabilitation Facilities (IRFs), Long-Term Care Hospitals (LTCHs), Cancer Hospitals and Children’s Hospitals will not be eligible under the proposed settlement. A full definition of each of these facility types can be found at §1886(d) or §1820(c) of the Social Security Act.

If a hospital is approved for participation in this process, the resulting settlement will apply to all eligible claims from that provider. Eligible claims are those denied by a Medicare contractor on the basis that services may have been reasonable and necessary but treatment on an inpatient basis was not, that are either under appeal at Level 3 or Level 4 or within their administrative timeframe to request an appeal review, with dates of admissions prior to October 1, 2013, and where the patient was not a Part C enrollee. The hospital cannot choose to settle some claims and continue to appeal others. Certain hospitals will be excluded from this settlement opportunity based on pending False Claims Act litigation or investigations.

Settlement Process

The settlement process is initiated by the hospital submitting their Expression of Interest to CMS at MedicareAppealsSettlement@cms.hhs.gov. If the hospital is approved for participation, CMS then generates a proposed spreadsheet of eligible claims/appeals for the hospital’s review, along with the Administrative Agreement for the hospital to sign. The hospital will validate the information and notifies CMS if there are any discrepancies on the eligible claims list by submitting an Eligibility Determination Request to CMS at MedicareAppealsSettement@cms.hhs.gov within 15 calendar days of receiving the Agreement. CMS and the hospital have 30 days to resolve any discrepancies. If discrepancies are resolved, the hospital will sign the Administrative Agreement, then CMS will sign the agreement. At any time prior to the hospital signing the agreement, they may withdraw its interest and will retain its full appeal rights. Proceedings on all eligible pending appeals will be stayed during this process.

CMS Awards New RAC Contracts

Date: November 1

On Monday, October 31st, the Centers for Medicare & Medicaid Services (CMS) announced that they had awarded the long-awaited new round of contracts for the Medicare Fee-for-Service Recovery Audit Contractors (RACs). The agency identified the awarding of contracts to the following:

  • Region 1 – Performant Recovery, Inc.
  • Region 2 – Cotiviti, LLC
  • Region 3 – Cotiviti, LLC
  • Region 4 – HMS Federal Solutions
  • Region 5 – Performant Recovery, Inc.

Per the announcement, “The RACs in Regions 1-4 will perform post-payment review to identify and correct Medicare claims that contain improper payments (overpayments or underpayments) that were made under Part A and Part B, for all provider types other than Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) and Home Health/Hospice,” CMS said on its website. “The Region 5 RAC will be dedicated to the post-payment review of DMEPOS and Home Health/Hospice claims nationally.”

CMS Announces 2016 Hospital Appeals Settlement Call

Date: October 28

On September 28, 2016 the Centers for Medicare and Medicaid Services (CMS) announced that it will “once again allow eligible providers to settle their inpatient status claims currently under appeal using the Hospital Appeals Settlement process.” At the time of the announcement no details on the new settlement offer were provided. Today, CMS announced that they will host a 2016 Hospital Appeals Settlement Call on November 16, 2016, from 1:30 to 3:00 P.M. CMS has created a Hospital Appeals Settlement Process 2016 webpage and indicated that details on the settlement process will be posted to the page in early November. Registration for the November 16th call is required and can be submitted through the MLN Connects Upcoming Events page.

CMS Reopens Medicare Appeals Settlements

Date: October 3

CMS has announced that they will reopen the Appeals Settlement to allow eligible providers to settle their inpatient status claims currently under appeal using the Hospital Appeals Settlement process. Specific details of the settlement have not yet been released. W&W will be monitoring CMS announcements for release of the settlement details.

BFCC-QIOs to Resume Two-Midnight Reviews

Date: September 15

CMS has announced that, effective September 12, 2016, BFCC-QIOs will resume initial patient status reviews of short stays in acute care inpatient hospitals, long-term care hospitals, and inpatient psychiatric facilities to determine the appropriateness of Part A payment for short stay hospital claims.  Per the CMS announcement, the temporary suspension, which was instituted on May 4, 2016, is being lifted because:

• The BFCC-QIOs successfully completed re-training on the Two-Midnight policy;
• The BFCC-QIOs have completed a re-review of claims that were previously formally denied;
• CMS examined and validated the BFCC-QIOs peer review activities related to short stay reviews;
• The BFCC-QIOs performed provider outreach on claims impacted by the temporary suspension; and
• The BFCC-QIOs initiated provider outreach and education regarding the Two-Midnight policy

CMS has not made any changes to the guidance under which the BFCC-QIOs will perform their reviews.  The BFCC-QIOs will continue to follow the guidance entitled, “Reviewing Short Stay Hospital Claims for Patient Status: Admissions On or After January 1, 2016.”  The outreach and education requirements detailed in the CY 2016 OPPS Final Rule also remain in effect.

Beginning June 6, 2016, CMS instructed the BFCC-QIOs to re-review all short stay patient status claims that were denied under the QIO medical review process. To address hospitals’ concerns that they do not have the opportunity to rebill for medically necessary Medicare Part B services by the time a medical review contractor has denied a Medicare Part A claim, CMS announced that these reviews would be limited to a six-month look-back period from the date of admission and that Medicare Fee-For-Service (FFS) claims that:

1. Are outside the six-month look-back period and were formally denied (as defined below) are being removed from the provider sample for re-review and will be paid under Part A.
2. Are outside the six-month look-back period and were not formally denied are being removed from the provider sample for re-review and will be paid under Part A.
3. Are within the six-month look-back period and were not formally denied will be reviewed when we resume QIO reviews as per issued sub-regulatory guidance.
4. Are within the six-month look-back period and were formally denied are being re-reviewed by the BFCC-QIO to determine whether the initial review decision was consistent with the two-midnight policy in effect at the time of the hospital admission.

If a hospital had already submitted an appeal for a denied claim, the BFCC-QIO was directed to share its re-review findings with the appeals adjudicators to be taken into consideration during the appeal process. If upon re-review it is determined that the claim was incorrectly denied, the appeals adjudicators would issue revised determinations as necessary.

Given the resumption of BFCC-QIO short-stay reviews, providers should be prepared for BFCC-QIO review of claims that fall within the six-month look back period and were not formally denied.  For other claims we would advise providers to (1) ensure that denied claims that fall within the six-month look back period were appropriately reviewed by the BFCC-QIO and (2) that any denied claims that fall outside the six-month look back period have been paid (these claims were removed from the QIO audit sample and should have been paid under Part A).

CMS Imposes Limit to Look-Back Period for Two-Midnight Reviews

Date: August 1

CMS has announced that it has clarified the instructions for medical review of claims affected by the temporary suspension of the BFCC-QIO claim audits under the two-midnight inpatient admissions rule.   Specifically, CMS announced that these reviews will be limited to a six-month look-back period from the date of admission.  Per CMS, Medicare Fee-For-Service (FFS) claims that:

  1. Are outside the six-month look-back period and were formally denied (as defined below) are being removed from the provider sample for re-review and will be paid under Part A.
  2. Are outside the six-month look-back period and were not formally denied are being removed from the provider sample for re-review and will be paid under Part A.
  3. Are within the six-month look-back period and were not formally denied will be reviewed when we resume QIO reviews as per our sub-regulatory guidance.
  4. Are within the six-month look-back period and were formally denied are being re-reviewed by the BFCC-QIO to determine whether the initial review decision was consistent with the two-midnight policy in effect at the time of the hospital admission.

The imposition of the six-month look-back period is to help ensure that providers receiving denials for Part A claims have sufficient time  to rebill under Medicare Part B.

CMS Posts Draft Medicare Outpatient Observation Notice (MOON), Instructions, and a Supporting Statement

Date: June 14

CMS has posted the draft Medicare Outpatient Observation Notice (MOON), Instructions, and a Supporting Statement.  The Medicare Outpatient Observation Notice (MOON) is a standardized notice developed to inform beneficiaries (including Medicare health plan enrollees) that they are an outpatient receiving observation services and are not an inpatient of the hospital or critical access hospital (CAH).  The MOON is mandated by the federal Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act), passed on August 6, 2015.  The NOTICE Act requires all hospitals and CAHs to provide written and oral notification under specified guidelines.  The MOON, its instructions, and implementing regulations were published in the Federal Register on April 27, 2016, as part of the FY 2017 Medicare hospital inpatient prospective payment systems (IPPS) proposed rule. They are available for public comment through June 17, 2016

GAO Study Concludes that Opportunities Remain to Improve Medicare Appeals Process

Date: June 13

In a report requested by the Senate Finance Committee, the Government Accountability Office (GAO) has determined that opportunities still remain for HHS to improve the Medicare fee-for-service appeals process and to reduce the increased volume of appeals.  The GAO study concludes that (1) Absent more complete and consistent appeals data, HHS’s ability to monitor emerging trends in appeals is limited and is inconsistent with federal internal control standards and (2) HHS efforts do not address inefficiencies regarding the way appeals of certain repetitious claims are adjudicated, which is inconsistent with federal internal control standards.  Based on the findings of the study, the GAO is making the following recommendations:

  1. the Secretary of Health and Human Services should direct CMS, Office of Medicare Hearings and Appeals (OMHA), or Departmental Appeals Board (DAB) to modify the various Medicare appeals data systems to collect information on the reasons for appeal decisions at Level 3.
  2. the Secretary of Health and Human Services should direct CMS, OMHA, or DAB to modify the various Medicare appeals data systems to capture the amount, or an estimate, of Medicare allowed charges at stake in appeals in Medicare Appeals System (MAS) and Medicare Operations Division Automated Case Tracking System (MODACTS).
  3. the Secretary of Health and Human Services should direct CMS, OMHA, or DAB to modify the various Medicare appeals data systems to collect consistent data across systems, including appeal categories and appeal decisions across MAS and MODACTS.
  4. the Secretary of Health and Human Services should implement a more efficient way to adjudicate certain repetitive claims, such as by permitting appeals bodies to reopen and resolve appeals.

 

CMS Policy Change Delay: Required Use of JW Modifier for Discarded Part B Drugs and Biologicals

Date: June 9

CMS announced in the June 6th Hospital Open Door Forum call that the policy change announced in April, requiring the use of the JW modifier for discarded Part B drugs and biologicals, will be delayed to January 1, 2017.  Per the policy change, when processing claims for drugs and biologicals (except those provided under the Competitive Acquisition Program for Part B drugs and biologicals (CAP)), use of the modifier JW to identify unused drugs or biologicals from single use vials or single use packages that are appropriately discarded with be required. CMS will no longer allow contractors’ discretion to determine whether the JW modifier is required for claims with discarded drugs and biologicals.  The JW modifier, billed on a separate line, will provide payment for the amount of discarded drug or biological.  Also contained in the policy change is the requirement that providers record the discarded amounts of drugs and biologicals in the patient’s medical record.

MM9603 – JW Modifier: Drug Amount Discarded/Not Administered to any Patient

QIOs to Re-Review All Denied Short-Stay Patient Status Claims

Date: June 9

According to a CMS spokesperson, the temporary pause in short-stay status reviews that began on May 4, 2016 may stretch through the end of July. That information, along with the announcement that the BFCC-QIOs will re-review all short stay patient status claims that were denied under the QIO medical review process came during the June 6, 2016 Hospital/Quality Initiative Open Door Forum call. CMS has indicated that they temporarily paused short stay patient status reviews when they became aware of inconsistencies in the BFCC-QIOs’ application of the two-midnight policy. CMS is requiring the BFCC-QIOs to re-review all claims they denied in their medical review process since October 2015 to make sure medical review decisions and subsequent provider education are consistent with current policy. CMS has indicated that they are working with the BFCC-QIOs to improve quality, including through educational sessions on practical application of the two-midnight policy in order to improve standardization in the BFCC-QIOs’ review process.

CMS is urging hospitals to work with their BFCC-QIO (KEPRO or Livanta, LCC) to determine if a denied claim has been re-reviewed (undergone a final determination) before appealing a claim denial. Per CMS, hospitals will receive a letter from the BFCC-QIO if denied claims are being re-reviewed, as well as a letter detailing the re-reviewed decisions. If a hospital already submitted an appeal, then the BFCC-QIO will share its re-review findings with the appeals adjudicators to be taken into consideration during the appeal process. If upon re-review it is determined that the claim was incorrectly denied, the appeals adjudicators will issue revised determinations as necessary.

Sarah Mendiola to Present at Association for Clinical Documentation Improvement Specialists (ACDIS) Annual Conference

Date: May 18

W&W Director of Clinical Services and Senior Attorney, Sarah Mendiola, will present at the 9th Annual Association of Clinical Documentation Improvement Specialists (ACDIS) Conference in Atlanta, Georgia on May 25th.  Ms. Mendiola’s presentation, titled Completing the Circle: The Importance of CDI Specialist Participation in the Denial Management Process, will discuss best practices for CDI specialist participation in denial management.  The interactive session will present actual examples of costly denials that could have been prevented with CDI specialist intervention. Examples will include 2-midnight denials, medical necessity for surgical denials (as outlined by CMS), and justification of MCCs that are difficult to support clinically while maintaining compliance guidelines.

Appeals Court Rules in Favor of Providers on Medicare Claims Appeal Backlog

Date: February 10

In an opinion issued on February 9th, the U.S. Court of Appeals for the District of Columbia Circuit reversed a lower court’s dismissal of the lawsuit filed by the American Hospital Association (AHA) and a group of hospitals that seeks to compel the U.S. Department of Health and Human Services (HHS) to meet its mandated deadlines for reviewing Medicare claims denials. The Appeals Court decision remands the case back to the district court for review and determination of whether HHS’ delay is so egregious as to warrant an order to compel the agency to comply with the statutory deadlines.

In its decision, the appeals court concludes that “the statute imposes a clear duty on the Secretary to comply with the statutory deadlines, that the statute gives the Association a corresponding right to demand that compliance, and that escalation – the only proposed alternative remedy – is inadequate in the circumstances of this case.”  In sending the case back to the district court, the appeals court indicates that “the clarity of the statutory duty likely will require issuance of the writ if the political branches have failed to make meaningful progress within a reasonable period of time – say, the close of the next full appropriations cycle.”

While providers must now wait for review by the district court, the appeals court decision is a step forward for hospitals in their quest to obtain timely review of the hundreds of thousands of claims that are currently mired in the backlog of claims awaiting review.

Cigna Banned From Selling New Medicare Advantage Plans

Date: January 29

In a January 21, 2016 letter to Cigna Corporation (“Cigna”) the Centers for Medicare & Medicaid Services (“CMS”) announced its determination and intent to impose intermediate sanctions suspending the enrollment of and marketing to new customers of all Cigna Medicare Advantage and Standalone Prescription Drug Plan Contracts.  The sanctions, which became effective at 11:59 p.m. on January 21, 2016, were imposed after a CMS conducted audit of Cigna’s Medicare operations concluded that Cigna “substantially failed to comply with CMS requirements regarding Part C and Part D organization/coverage determinations, appeals and grievances; Part D formulary and benefit administration; access to facilities and records; and compliance program effectiveness.”  In a Securities and Exchange Commission (SEC) filing Cigna indicated that the corporation is “working to resolve these matters as quickly as possible and is cooperating fully with CMS.”

OMHA Announces Settlement Conference Facilitation (SCF) Pilot Open Door Call

Date: September 17

An email on behalf of the OMHA Medicare Appellant Forum announced today that the Office of Medicare Hearings and Appeals’(OMHA) had scheduled an open door teleconference which will discuss  expansion of its Settlement Conference Facilitation (SCF) Pilot.  The open door teleconference will be held on October 15, 2015 at 1:00pm-2:00pm.

BREAKING: Supreme Court Upholds Subsidies

Date: July 16

The Supreme Court ruling in King v. Burwell (11-114) upholds the Federal tax subsides of the Patient Protection and Affordable Care Act.  As per the Court’s ruling:

“Petitioners’ plain-meaning arguments are strong, but the Act’s context and structure compel the conclusion that Section 36B allows tax credits for insurance purchased on any Exchange created under the Act. Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”

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