Low-Volume Appeals (LVA) and expansion of its Settlement Conference Facilitation (SCF) program are two new offerings by the Office of Medicare Hearings and Appeals (OMHA) to improve the appeal process.

In an effort to improve the Medicare appeal process, hospitals are being offered two new programs – one designed for hospitals with a low volume of pending Part A and B claims at the administrative law judge (ALJ) level and the expansion of the federal Settlement Conference Facilitation (SCF) program.

The two programs were announced on Nov. 3 and posted today by the Centers for Medicare & Medicaid Services (CMS) and the Office of Medicare Hearings and Appeals (OMHA).

“In a surprise move, CMS announced that they are offering a third settlement offer to hospitals (that) have outstanding cases awaiting hearings at the ALJ or Medicare Appeals Council level,” wrote Ronald Hirsch, MD, in a statement to RACmonitor. “But unlike previous offers, this offer only applies to hospitals with fewer than 500 Part A and B claims awaiting adjudication where no single claim exceeds $9,000. CMS is now offering a settlement of 62 percent of the net allowed amount.”

As of today, there are still no available details on how hospitals can apply for the settlement or the time frame for applying for participation. CMS has indicated that it will post updates on its Hospital Appeal Settlement Process page at https://www.cms.gov/Medicare/Appeals-and-Grievances/OrgMedFFSAppeals/Hospital-Appeals-Settlement-Process-2016.html.

“This offer has a couple of interesting points,” said Hirsch. “First, it appears from the $9,000 limit that they are targeting a reduction the number of appeals that remain after the hundreds of thousands of appeals that resulted from the many Recovery Audit Contractor (RAC) denials of short-stay inpatient admissions.”

Hirsch, vice president of physician advisory services at R1, said that while CMS had what he described as “many takers” of its 68 percent and 67 percent offers, the number of remaining claims still is taxing the ALJs handling an overwhelming number of appeals.

Hirsch also described the offer of 62 percent as interesting because in most negotiations, the first offer is a starting point and subsequent offers are higher.

“By offering only 62 percent in this third round, it seems they (CMS) are hoping more providers have become tired of waiting for their hearings and will accept this lower payment,” Hirsch said. “Anecdotally, I find most hospitals that did not accept the first two offers declined the offers on the principal that they were right and the RAC wrong. Offering them now a lower percentage is likely to be viewed as an insult rather than a legitimate offer to consider. Time will tell how well this is accepted.”

CMS also noted that there will be an expansion of the SCF process, but gave no details.

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