As previously reported, on August 29, 2014, CMS issued a global settlement offer (GSO) to acute care hospitals with pending appeals of denials for inpatient claims.  Specifically, CMS is offering to settle all qualifying claims at 68 percent of the “net paid amount” of such claims within 60 days of CMS’s execution of an “Administrative Agreement.”  On September 9, 2014, CMS further clarified the terms of the GSO during a Medicare Learning Network (MLN) National Provider Call.  Gerald Walters, Senior Advisor to the Chief Financial Officer, Office of Financial Management; Melanie Combs-Dyer, Director, Provider Compliance Group; and Amy Cinquegrani, Health Insurance Specialist, Provider Compliance Group, presented on behalf of CMS. 

During the MLN call, CMS acknowledged the massive backlog of the Medicare Appeals System and encouraged hospital providers to participate in the GSO to alleviate the appeals backlog.  CMS also stated that the implementation of the Two Midnight Rule is designed to reduce future appeals.  CMS, however, did not address the need for contractor reform during the call. 

Since the issuance of the GSO on August 29, 2014, providers have raised several questions concerning how the settlement process and claim reconciliation would be effectuated as well as the potential reimbursement consequences of participating in the GSO.  CMS addressed some of these questions during the MLN call.

For example, CMS addressed the timeliness of the claim reconciliation process.  According to the terms of the GSO, CMS must pay the settlement amount to a provider within 60 days of a fully executed Administrative Agreement.  CMS set no timetable for when it must countersign an Administrative Agreement after reconciling a provider’s list of eligible claims.  During the MLN call, CMS confirmed that contractors will assist CMS with this reconciliation process and further stated that the “goal” is for contractors to respond to a provider’s GSO submission within 30 days.  However, CMS explained that the length of time required to reconcile a provider’s list of eligible claims will largely depend on a provider’s claim volume.

CMS also clarified during the call that settled claims will not count toward a hospital’s inpatient days which will impact graduate medical education (GME) payments.  Additionally, CMS clarified certain limitations on collecting money from beneficiaries if a hospital elects to participate in the GSO.  Although providers are not required to refund previously collected beneficiary deductibles and coinsurance, a hospital provider cannot continue collecting such funds once the hospital has applied for the GSO unless the beneficiary has already entered into a repayment plan with the hospital.  CMS also clarified that to the extent there are unpaid deductibles and coinsurance associated with the claims included in the GSO, a hospital cannot report these unpaid fees as bad debt.

CMS also reserved answering questions on a few topics (such as secondary insurance and Part B rebilling issues) because it plans to address those issues in future guidance. 

The audio recording and transcript of the MLN call are not yet available, but will be posted here when they become available.  The presentation materials are available here.

CMS also posted updated FAQs on September 9, 2014.  The FAQs are available by clicking here.

Reporter, Stephanie F. Johnson, Atlanta, + 1 404 572 4629, sfjohnson@kslaw.com.