- CMS quietly announced last week that it has paid out $1.3 billion to over 1,900 hospitals to help ease the Medicare claims appeals backlog.
- The pay-out is the result of a deal the agency offered last August to pay 68% of the value of inpatient claims that were languishing in the hearings and appeals process.
- The agency said that the $1.3-billion figure accounted for 300,000 claims across all levels of appeals, noting that the final number "may change slightly, but not by much." CMS has not provided any insight into how it set the 68% figure.
Both the amount and the volume of the pay-out suggests that most hospitals preferred to cut their losses rather than continue to fight through cumbersome appeals. There is some controversy over how accurate the RAC process is: While CMS says that only 18% of appealed claims have been decided in the favor of hospitals, the American Hospital Association says its data suggests that hospitals have prevailed in two-thirds of appealed cases.
Not surprisingly, RACs—which are paid for every successful audit—have already fired back at the administration for offering the deal in the first place.
"We are concerned about the message that this sends to providers," The Council for Medicare Integrity, which represents RACs, said in statement. "Game the system by appealing every claim denial, bring the appeals system to a standstill and then be paid regardless of the outcome of their case. This essentially incentivizes hospitals to continue to overwhelm the system with frivolous appeals."