CMS offers deal to hospitals to reduce backlog of appeals

In an effort to reduce the backlog of Medicare claims appeals that has hindered long-term care and other providers, CMS is offering a new way to settle some cases. Hospitals could receive a partial payment if they withdraw appeals related to inpatient status, the Centers for Medicare & Medicaid Services announced Friday.

Many pending appeals stem from auditors’ determinations that beneficiaries were designated as hospital inpatients when they should have been outpatients. To more quickly reduce the volume of inpatient status claims, CMS is now offering an administrative agreement mechanism. Hospitals that enter into this agreement would receive over 60% of the amount in dispute, the agency’s memo stated.

Long-term care providers have protested both the broken Medicare appeals process and the confusion over when to grant hospital inpatient status. Some believe that this confusion has caused hospitals to err on the side of caution by keeping people in observation status rather than admitting them as inpatients, preventing them from qualifying for Medicare coverage of post-acute services

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