- In an effort to reduce the backlog of contested Medicare claims, the Centers for Medicare and Medicaid Services has offered to pay hospitals 68% of what they say they are owed for short-term inpatient stays.
- The system of hearings on challenged claims has been on hold since December, when the HHS Office of Medicare Hearings and Appeals temporarily suspended most new requests for administrative law judge hearings on payment denials by recovery audit contractors.
- Hospitals will have 60 days to decide whether to accept CMS' offer, which does not apply to any short-term hospital admission that occurred after October 1, 2013.
Hospitals have a tricky decision to make in considering whether to accept CMS' offer. On the one hand, it is cash on the barrelhead and avoids a prolonged fight with the RACs.There's something to be said for accepting a substantial settlement and moving on, rather than tying up resources fighting for every last penny of their claim.
On the other hand, hospitals may well feel they can't afford to voluntarily give up roughly a third of the payment if the size of the challenged claims is large enough. Also, hospital leaders may feel that they have to hold the line on the RACs, who often lose in court when they are challenged. (Of the 40% of RAC denials that are appealed, hospitals prevail 72% of time).
Either way, hospitals have to give up something substantial, either the time they invest fighting the RACs or a good chunk of the money they believe they are owed. It's a difficult situation.