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CMS Posts 2016 Hospital Appeals Settlement Details

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 The deadline for hospitals to submit their Expression of Interest is January 31, 2017.

The facility types eligible for the settlement are:

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 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 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.

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