The HHS Office of Medicare Hearings and Appeals (“OMHA”) recently launched Phase III of the Settlement Conference Facilitation (“SCF”) Pilot to help resolve outstanding Medicare Part A appeals.  The SCF program is one of several strategies initiated by HHS to attempt to resolve the historic backlog of Medicare claims appeals.  Phase III, which opened on February 26, 2015, covers Part A claims appeals that were not eligible for the 2014-2015 CMS Part A Hospital Appeals Settlement in which CMS offered to resolve at 68 percent outstanding appeals of inpatient claims denied by contractors on the theory the services should have been provided on an outpatient basis.

To be eligible for the new SCF pilot program, Medicare Part A providers must have a pending but unscheduled request for an Administrative Law Judge hearing to appeal a Medicare Part A Qualified Independent Contractor (“QIC”) reconsideration decision as of December 31, 2015; have a minimum of 50 claims at issue totaling at least $20,000 (but no individual claim for more than $100,000); and include all pending appeals for the same item or service type that meets the SCF criteria. 

There are a number of other conditions for participation.  Appellants must certify that they have not filed for bankruptcy and do not expect to file for bankruptcy in the future.  Appeals brought directly by beneficiaries are not eligible (they receive hearing priority over providers) and claims in which a beneficiary has been found liable also are ineligible.  Finally, Part A claims that have been addressed in other venues, like OMHA’s Statistical Sampling Initiative, are ineligible as well.

Both parties’ participation in the settlement process is voluntary and any resolution reached during this process will be binding and not available for appeal.  If the parties do not resolve the appeal, the appellant’s claims are returned to the ALJ hearing process queue in the order that the original hearing request was received.

It is worth noting that, at this time, claims that have been resolved via the SCF process will continue to appear as claim denials in Medicare’s payment systems.  This could cause complications if, for example, future claims related to the settled claims require appeals (for example, repair or future rental claims for equipment that was previously denied but now resolved in the settlement process).  CMS has reported that it is aware of this issue and exploring ways to allow payments for downstream claims in the future.

How to Participate

To formally request a settlement conference under this program, an appellant must first receive a preliminary report of appeals pending at the ALJ level.  While OMHA is responsible for distributing these SCF Preliminary Notifications to potential participants, an interested party can file a Medicare Part A Expression of Interest document to initiate OMHA’s record review process.  Following OMHA’s review of pending appeals, it will provide a preliminary report of pending appeals to CMS and grant the agency 15 calendar days to determine whether it will participate in the settlement conference.  If both parties have agreed to participate in the process, OMHA will issue an SCF spreadsheet with OMHA’s outlay of eligible appeals for the pilot.  The provider will have 15 calendar days to review OMHA’s materials and file a formal Settlement Conference Facilitation package before a settlement conference date is scheduled.  OMHA reports that to date, most settlement conferences have been conducted by telephone, but videoconferencing and/or in-person conferences may be possible depending on the needs and geographic locations of the parties.  Although each case will vary, the timeline that OMHA has articulated suggests that a settlement conference could be scheduled within four-to-six months of initial contact with the SCF program.

More information about OMHA’s Settlement Conference Facilitation Pilot is available here. 

Reporter, C’Reda Weeden, Washington, D.C. +1 202 626 5572, cweeden@kslaw.com.