Slides from the CMS 68 percent Settlement Offer Presentation at the Craneware Revenue Integrity Summit. This gives the details of the CMS 68% Settlement offer that was given. Learn more at http://www.healthcarescene.com

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CMS 68% Settlement Offer
William L Malm, ND, CMAS, CRCR
Jeff St. Vrain

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CMS Settlement Offer
Agenda
1
Introduction & Background
2
Source Authority Review
3
Review of Decision Matrix
4
Next Steps

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CMS Settlement Offer
Objectives
1
Participant will state where to find source authority documents
2
Participant will state the need for 2 settlement agreements
3
Participant will state the two phases of the offer
4
Participant will state what are “eligible” claims
5
Participant will be able to state deadlines required by CMS

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INTRODUCTION / DISCLAIMERS

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Settlement Summation
Craneware is NEITHER suggesting or advising against taking the settlement.
The sole purpose of this presentation is to provide information and source authority documents to provide clarity to the settlement offer
There are several matrix provided also for educational purposes by Craneware and Appeal Academy.
Purpose of these matrix is to show the considerations as well as decision pathway that detail Round 1 and Round 2 processes.

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Source Authority Documents

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Settlement Source Authority
CMS Settlement Landing Page:
http://cms.gov/Research-Statistics-Data-and-Systems/Monitoring- Programs/Medicare-FFS-Compliance-Programs/Medical- Review/InpatientHospitalReviews.html
Original Documents:
http://www.cms.gov/Outreach-and-Education/Outreach/NPC/National- Provider-Calls-and-Events-Items/2014-09-09-Hospital-Settlement.html
CMS FAQ’s:
http://cms.gov/Research-Statistics-Data-and-Systems/Monitoring- Programs/Medicare-FFS-Compliance-Programs/Medical- Review/Downloads/Hospital_Appeals_SettlementFAQs_10032014_508.pdf

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Two Salient Documents
Administrative Agreement:
http://cms.gov/Research-Statistics-Data-and-Systems/Monitoring- Programs/Medicare-FFS-Compliance-Programs/Medical- Review/Downloads/AdminstrativeAgreement.pdf
Eligible Claims Spreadsheet:
http://cms.gov/Research-Statistics-Data-and-Systems/Monitoring- Programs/Medicare-FFS-Compliance-Programs/Medical- Review/Downloads/EligibleClaimSpreadsheet_updated09092014.xlsx

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What’s On The Website

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Non – Source Authority (Proprietary)
A significant discussion was undertaken on 10/10/14 with Appeal Academy
The handout’s can be found on their site at:
http://appealacademy.com/this-week-on-finallyfriday/

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BACKGROUND

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Background and Overview
The RAC programme has lead to over 800,000 claims in appeal status at the Administrative Law Judge level (ALJ)
OMHA had a seminar earlier in the year indicating there would be delays in even scheduling appeals at the ALJ level until some of the cases could be cleared
Recently the ALJ are stating that they are getting a “years worth of claims” almost weekly
Cannot sustain the current work

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Background and Overview
CMS stating it isolating to appeals prior to 10/1/13 because they feel they have managed the number of appeals moving forward.
CMS states that as of 10/1/13 the IPPS rule provides provisions to control future appeals through:
Final Rule 1599 (published in August 2013), also known as the “2- Midnight Rule”, clarified how Medicare contractors review inpatient hospital and critical access hospital (CAH) admissions for payment purposes
‒Part B billing: Interim Rule 1455-R and Final Rule 1599

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CMS Stated Purpose for the Settlement
To more quickly reduce the volume of patient status claim denials currently pending appeal, CMS is providing a process for resolving patient status determinations that are: Pending appeal or
within the timeframe to request an appeal review
The YouTube and presentation is from CMS
http://www.cms.gov/Outreach-and- Education/Outreach/NPC/Downloads/2014-09-09-Hospital- Settlement-Presentation.pdf
http://www.youtube.com/watch?v=I5zc9LPXzeo&feature=youtu.be

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CMS Authority to Conduct Settlement
CMS is offering this settlement pursuant to the Social Security Act and CMS’s regulations regarding claims collection and compromise at 42 C.F.R. 401.601 and 401.613, and regarding compromise of overpayments at 42 C.F.R. 405.376.
The settlement will be 68% of the inpatient net paid/payable amount.
DRG payment plus Add-on Payments (DSH & IME interim payments, etc.), minus deductible and co-insurance
Cannot collect copay/ deductible if not already collected or part of a payment plan

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Eligible Facilities / Eligible Claims
The following facility types are generally ELIGIBLE to submit a settlement request:
Acute Care Hospitals, including those paid via Prospective Payment System (PPS),
Periodic Interim Payment (PIP), and Maryland waiver;
Critical Access Hospitals (CAH)
No other facilities are eligible at this time for the settlement or are they ?
Rumour of Home Health getting a settlement process

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Eligible Facilities / Eligible Claims
Eligible Claims are defined as:
Claim pending appeal or within the timeframe to request appeal review
Denial based on the appropriateness of the inpatient admission (patient status review)
Date of Admission prior to 10/1/2013
•
Remember after 10/1/2013 the “2 midnight rule” is in play
Not previously withdrawn/ billed for Part B payment

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Eligible Claim – Administrative Agreement
…“eligible claims” are defined as those meeting all elements of the following definition:
1) the claim was denied by any entity that conducted a review on behalf of CMS;
2) the claim was not for items or services furnished to a Medicare Part C enrollee;
3) the claim was denied based on an inappropriate setting determination, that is, on the basis that the service might have been reasonable and necessary, but treatment on an inpatient basis was not;
4) the first day of the admission was before October 1, 2013;
5) the Hospital timely appealed the denial;
6) as of the date of an executed Agreement submitted to CMS by the Hospital, the appeal decision was still pending at the MAC, QIC, ALJ, or DAB levels of review, or the Hospital had not yet exhausted its appeal rights at the MAC, QIC, ALJ, or DAB level; and
7) the Hospital did not receive payment for the service as a Part B claim.

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Selection of Claims – Your In or Out
CMS has been “crystal clear.”
It’s all or nothing – you are completely in for the settlement after signing the administrative agreement
Selection is at Round 1 and Round 2
Each round “you are in or your out”

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Deadlines and Requirements
The settlement is in two phases.
The initial settlement must have the required elements filed prior to October 31, 2014
Hospital Signed Administrative Agreement
Spreadsheet of Claims/ Appeals Numbers
Hospital will need to stay all appeals during the settlement
Second phase will involve disputed claims on the list of CMS / Appellant and separate requirements for settlement

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Summary Round 1 / Phase 1
Round 1:
Hospital will submit their proposed spreadsheet of eligible claims/appeals for CMS review with a signed Administrative Agreement. CMS will validate the information and notify the hospital if there are any discrepancies from the contractor eligible claims list. Proceedings on all eligible pending appeals will be stayed.
If CMS has identical information to that submitted, the original agreement will be countersigned by CMS, and payment will be provided. The impacted appeals will be dismissed.
If discrepancies are identified, the subset of agreed upon claims will be made the subject of an initial agreement signed by both parties, payment will be provided, and the impacted appeals will be dismissed. The subset of claims in which there is disagreement regarding eligibility will continue on to the second round of review. Appeals will continue to be suspended as the settlement is reviewed.

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Summary Round 2 / Phase 2
Round 2:
Hospital will review the discrepancies from the first round validation process and resubmit a revised spreadsheet and Administrative Agreement for CMS validation within 2 weeks of receipt.
If CMS has identical information to that submitted, the original agreement will be countersigned by CMS, and payment will be provided within 60 days. The included appeals will be dismissed.
If discrepancies are identified, CMS and the hospital will conduct Round 2 discussions until both parties are in agreement, and a new agreement will be signed for payment and appeal dismissal regarding any appeals that there has been agreement upon.

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Validation
There is an analysis on both Round 1 and Round 2 and will be validated as follows per CMS:
For claims which CMS agrees with the hospital: Medicare Administrative Contractor (MAC) sends agreement lists to hospital for final review
•
Hospital sends CMS either Confirmation to proceed, or
•
Notice of abandonment
CMS signs agreement
MAC will effectuate the payment
Appeal entities will dismiss associated appeals

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Validation
When CMS finds discrepancies:
CMS may add additional eligible claims
MAC sends disagreements/additions to hospital for review ‐if hospital agrees - resubmit revised spreadsheet and administrative agreement if hospital disagrees - MAC and the hospital will have discussions
MAC effectuates a second payment based on Round 2 validation
Appeal entities will dismiss associated appeals

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Validation by:
Depending on the level of the appeal different groups will validate the appeal
MAC will validate eligible claims at the “redetermination” level
Administrative Qualified Independent Contractor (AdQIC) will validate claims at reconsideration.
AdQIC will also validate a “sample” of claims pending with the ALJ or Medicare Appeals Council.
•
There is also a review by the ALJ and Medicare Appeals Council but no time limit was set forth for this validation process

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SETTLEMENT IMPLICATIONS

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Settlement Implications
All claims will remain denied
FAQ 16. How will eligible claims that are the subject of the administrative agreement be characterized in the relevant CMS database (such as the Common Working File) for purposes of determining such statistics? Will they be characterized as paid claims? Denied claims?
•
Claims included in this settlement will remain denied and the appeals will be dismissed.

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Medicare pays the Per Resident Amount (PRA) on a calculation based on:
Medicare pays its portion of this amount based on the ratio of the number of total inpatient days Medicare patients spend in the hospital divided by the hospital's total inpatient days for all patients.
With the claims being settled and remaining as “denied” then the days covered by those claims is removed from the total Medicare days in the above calculation
The result would be an adverse impact on the GME payments but the extent would depend on the number of days in the settlement for the facility.
DGME Implications

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Medicare Disproportionate Share Impact

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Is 68% really 68% or is it more like 52%
In general, providers have determined that the ability to attain the 68% threshold requires that the co-pays and deductible were collected before the settlement.
F. Payment - 2: What is the provider’s refund responsibility related to the Beneficiary’s co-insurance and deductible?
The providers refund responsibility is as follows:
•
a. If the Beneficiary co-insurance has been collected at the time CMS signs the administrative agreement, no refund is required.
•
b. If the Beneficiary co-insurance has not been collected at the time CMS signs the administrative agreement, the provider must cease collections.
•
c. If a Beneficiary repayment plan has been executed at the time CMS signs the administrative agreement, the provider may continue to collect the co-insurance in accordance with the repayment plan.
•

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Future Oriented Considerations
Would settlement now allow for:
Focusing on corrective actions
Utilize monies for improvement of revenue integrity process and documentation improvement instead of fighting appeals
Claims with low success overall may achieve a better result at 68 percent
HOW SUCCESSFUL DO YOU THINK YOU WILL BE OR SHOULD YOU ACCEPT THE SETTLEMENT AND MOVE ON

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THE CRANEWARE DECISION MATRIX

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Factors to Consider

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Factors to Consider

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DECISION TREE APPEAL ACADEMY

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Appeal Academy Decision Tree

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Appeal Academy Validation Tree

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SUMMATION

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Settlement Summation
Whether the facility takes or declines the opportunity for the settlement a “root cause analysis” must continue to occur
Is there anything that the facility is doing or not doing that is leading to the denials
Have you performed a real introspective look into the causes of denials
Review the EMR is it adding to the problem or denial rate

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Settlement Summation
Every facility will need to meet with their physician advisors, utilization review personnel, financial representatives and in some cases legal counsel to:
Evaluate the immediate impact of settling
Evaluate potential impact on DSH and GME
Evaluate your prior ALJ success history and trend your last 36 months – have you had the same success rate
Make decisions about the likelihood that the ALJ will continue with the same decision history as you previously enjoyed

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Settlement Summation
Every facility will need to meet with their physician advisors, utilization review personnel, financial representatives and in some cases legal counsel to:
Determine the cost to pursue ongoing appeals if the settlement is not undertaken
Determine the probability that pursuing the settlement could raise the probability for other payors looking at denial rates to begin to audit
Determine potential that the media will use the settlement in a way other than expected – adverse community image
Lots and lots of considerations will be undertaken

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Thank You

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Thank You
On behalf of Craneware and Craneware Insight staff we would like to thank you for your participation today.
As always we look forward to being of assistance to you. Should you have further comments or questions from today’s presentation please address them to: w.malm@craneware.com or J.stvrain@craneware.com

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Questions