Good News for Medicare Providers as CMS Expands Settlement Conference Facilitation and Introduces New Initiative for IRFs

The Centers for Medicare and Medicaid Services (CMS) made a number of recent changes to expand the Settlement Conference Facilitation (SCF) process for providers and suppliers mired in the backlog of appeals at the Administrative Law Judge (ALJ) level and Medicare Appeals Council (Council). The SCF program is an alternative dispute resolution process which offers appellants an opportunity to meet with CMS with a facilitator to negotiate a potential payment resolution for eligible Medicare Part A/B claims awaiting adjudication at the ALJ or the Council levels of appeal.

The most notable change to the SCF process with this recent expansion was the elimination of a $1,000,000 cap for participation for claims involved in a statistical extrapolation. Previously, providers or suppliers with an initial demand notice of over $1,000,000 in extrapolated overpayments were ineligible to participate. Because the statistical sampling and extrapolation process by its very nature allows CMS contractors to extrapolate an error rate from a relatively small sample of claims to a larger “universe” of claims, the initial overpayment demands were often substantial for many providers and suppliers and frequently in excess of $1,000,000. Thus, CMS’s recent elimination of the cap means that many more providers and suppliers will now be eligible to participate in the SCF process.

In addition to eliminating the $1,000,000 cap, OMHA also extended the time period for eligible claims to include appeals to the ALJ or Council that were filed by or before March 31, 2019. The prior cut-off date was November 3, 2017; thus, the recent changes allow appellants who have filed as recently as six months ago an opportunity to seek an early resolution to their appeals.

CMS also recently announced a new voluntary appeals settlement initiative applicable to inpatient rehabilitation facilities (IRFs) starting June 17, 2019. This voluntary settlement option is available to IRFs with Medicare appeals filed no later than August 31, 2018, which are pending at any level of appeal. Pursuant to the IRF Voluntary Settlement Option, CMS will generally pay 69% of the net payable amount for all pending claims with certain exceptions. Specifically, for any claims denied based solely on the threshold of therapy time not being met or lack of justification for group therapy documented in the medical record, CMS announced that appellants may be reimbursed for 100% of the net payable amount.

Although the Department of Health and Human Services recently reported that the number of pending appeals at the ALJ level has decreased by almost 20% by the end of the second quarter of FY 2019, the backlog continues to be significant, with 343,658 appeals still pending. As a result, the expansion of these initiatives gives providers and suppliers entangled in the appeals backlog some viable alternatives to the long waiting period.

For more information please contact Lanchi Bombalier or Charmaine Mech or click on the following links to read more about the SCF process and new voluntary IRF settlement option.