Many Changes Posted in CMS Global Settlement Offer FAQs

To take this offer, you have to go "ALL-IN" with CMS

To take this offer, you have to go “ALL-IN” with CMS

CMS posted many changes to their Frequently Asked Questions (FAQ) documents about their recently issued proposed settlement terms – demanding an “all in” stance – for acute care hospitals with appeals stuck in the highly over-burdened Medicare appeals process, on August 29. What has not changed is that, essentially, CMS still wants to settle with providers and pay 68 percent of the “net paid amount” of those stalled appeals. Since their inital announcement, CMS held an Open Door Forum (ODF) on September 9 to answer questions and “sell” the program to providers on the call.

We produced a Finally Friday! show about the basics of this settlement offer, on September 5, 2014.

If you want "MORE" look no further than the FAQs for the Global Settlement Offer. Changes, changes and more changes.

If you want “MORE” look no further than the FAQs for the Global Settlement Offer. Changes, changes and more changes. Maybe the changes aren’t so big… but give them time. After all, it’s only been a couple weeks.

Perhaps in an attempt to get out in front of the ODF, on September 8, CMS posted a list of FAQs about this settlement process. However, since that date, they have updated that list of FAQs, three times, creating three versions of the document.

We take a look at some of the interesting differences in the three versions, below.

For me, the FAQs have now taken on the flavor of CMS Transmittals… publish, republish, and publish again… because we can’t seem to think this through very well when we create these programs.

And you thought software companies were bad at shoving products out into the market without thinking it through very well?

General Questions Section

FAQs 1 through 7 have not changed since the original publication on September 8, 2014. The first six questions are basic and simple, needing no comment. But then comes number seven, under the first section, A. GENERAL QUESTIONS.

Question #7:

How are Recovery Auditor contingency fees impacted by this settlement offer? Recovery Auditor contingency fees are governed by contract requirements and will be handled accordingly.

This has not changed, since it was added to the 9-16-2014 posting.

Immediately after the settlement campaign was announced, I heard from my contacts that the RACs were screaming bloody murder, because they were being told that CMS claimed that they would be taking back all the contingency fees paid out for any claim that was settled, under this new program. Of course, RACs would cry foul, as this would likely not be legal under their existing contracts. While I cannot confirm the legality of this without seeing those contracts, it seems highly unlikely that such a scenario was ever imagined by anyone involved in that process, until now. Therefore, it is also highly unlikely that any existing contract clause could be used to justify such a process – aside from declaring the denials as overturned by appeal, which CMS has made clear they have no intention of doing. (Remember, too, that the delays in awarding the new RAC contracts is due to CMS trying to change the way they pay the RACs, and these changes are largely due to the fact that the previous contracts had no facility or process for refunding fees to CMS for denials overturned on appeal AFTER the contract expiration date.)

Regardless, so many providers have complained to the AHA that they think it completely unfair to allow the RACs to keep their fees for these settled claims, that the AHA wrote a letter to CMS Adminstrator Marilyn Tavenner, asking for “a definitive answer” to the question, further stating that since “hospitals have been asked to accept partial payment in order to alleviate the significant strain on the appeals system, we expect that CMS has required a corresponding financial sacrifice from the RACs.”  Not exactly strong language, now is it?

No word back from CMS, as yet, and would anyone like to wager on whether an answer is forthcoming in time for the next Open Door Forum call about the Settlement Offer on October 9?

Question #8:

What happens if we do not accept the 68% reimbursement? The settlement offer is completely voluntary. Providers are not required to submit a settlement request. Providers who do not submit a settlement request will remain in the normal appeal process.

This has not changed, since it was added into the 9-16-2014 posting.

What it does NOT say or suggest, is how providers will be “viewed” by CMS, it’s review contractors, or the Administrative Law Judges, who will now be forced to live with the overloaded appeals backlog, and who can now be said to be less-than-previously inclined to side with providers against the unreasonable policies now being enforced under the guise of “protecting the Medicare Trust Fund,” also sometimes known as “maintaining budget neutrality.” My prediction is a drastic reduction in the number of appeals receiving favorable decisions at the ALJ level.

Question #9:

Will these claims be excluded from future audits by any/all auditing entity, e.g., MAC, RAC, QIO, CERT, OIG? Claims that have already been reviewed are always excluded from future review by a MAC and Recovery Auditor. Because CERT chooses claims randomly, it is possible that a handful of these claims will be selected for CERT review. This settlement does not impact reviews being conducted under the false claims act, so ZPIC or OIG reviews of potentially fraudulent claims will continue.

This has not changed, since it was added into the 9-16-2014 posting.

Again, let’s take note of what it does NOT say. There is no mention of UPICs or any other type of review contractor, only the MAC and RAC. It also does NOT say what happens to a claim that happens to be “randomly” chosen for later CERT review. Claims selected for CERT review are subject to overpayment recoupment, potential postpayment denials, payment adjustments, or other administrative or legal actions depending on the result of the review. So… the question remains, will all future reviews of the claims, except for suspected fraud, be excluded from recoupment of the settlement? They don’t say.

Question #11:

Confirm this is a onetime option. Yes. This is a one-time settlement offer.

Added into the 9-16-2014 posting.

Right. You’ll never offer this again. And ICD-10 will NOT be delayed again, either. Uh huh. I’m dubious.

Question #12:

Question Removed.

Added into the 9-16-2014 posting.

Why is this even here? And even more puzzling, why does it continue to appear, even in the later edition?  And just what WAS Question #12?

[CUE MUSIC: theme to “The Twilight Zone”]

Questions 13 through 17 are pretty self-explanatory and need no comment.

Process Questions Section

Further down in the September 22 edition, we find some interesting items under the C. PROCESS section.

There was a concern raised by providers, as soon as CMS mentioned the word “sample” in their explanations: So, now comes this question.

Question #19:

Will CMS and its contractors validate all claims on a hospital’s eligible claims list or only a sample?CMS and its contractors will validate all information about the QIC level and below. CMS and its contractors will validate a sample of information about the ALJ and DAB level cases. After the settlement payments are issued, OMHA and the DAB will conduct a full review on all cases at their level. If the ALJ or DAB identify errors in the settled claims, CMS will direct the MACs to take recovery actions for claims that were ineligible for settlement that were inadvertently included in the agreement; or pay providers the settlement amount for claims pending appeal that were inadvertently omitted from an agreement.

This is a new addition to the 9-22-2014 edition.

Note that “sample” here has nothing to do with the dollar amounts in question. Apparently, CMS is expecting some very large spreadsheets from providers with too many appeals to be validated with their existing staff or whatever process they intend to use to validate the list of claims submitted by those providers. What they propose to do is take the list, choose a small sample of the appeals listed, and validate only those appeals against the ALJ and DAB database of appeals.

One wonders – does this mean that the numbers are so big, or that the database is too hard to work with at ALJ & DAB, or perhaps the cases are not even IN a database where they can be cross-checked? Actually, I find this last scenario most feasible, albeit frightening. Regardless, CMS only promises to validate a small number of submitted ALJ/DAB level appeals.

Now comes the problem with this… in typical CMS fashion, just because they approve something and pay it, if they LATER decide that was “in error”, they will make appropriate adjustments, in whatever direction they deem necessary – recoupment or payment.

Does anyone know of a program where once CMS agrees to something, they can’t later change their mind with impunity? Are they ever sure of an amount? If they later declare a different amount is owed… which one is correct? The first one or the latest one? How can you tell?

Further down in Question #21, they explain that this sampling process “…is meant to expedite claim appeal validation, and to limit the time taken to make payment to a provider…” but they ignore the fact that, once again, no one can take CMS at its word.


As I’ve stated before, I for one do NOT think this is a good deal for providers. I believe, however, that it is the best that CMS will propose, given the reality of their own position.

Consider that despite recent rumors that CMS told the RACs they would have to give back all their fees they collected for these claims, there is (in my estimate) no legal process for them to actually take back that money from the RACs. That means that if the hospital gets 68%, and the RAC got 12% (worst case), then only 20% remains, and that is probably how much the MAC got for their processing fees in the first place.

The money is all spent:    68% + 12% + 20% = 100%

So, if those estimates are correct, CMS cannot give any more than 68%, without losing money. (Thanks to Bill Malm at Craneware for helping me figure that one out, but who knows what’s in their mind, and we’ve already seen plenty of examples of how CMS seems to have a different math to use for their calculations.)

Anyway, I think the program is a bad deal, but some providers may need to take the money and run. It’s rather like medicine… it’s a case-by-case thing.

By All Means… Pay Attention to the Details

The program has many details, many questions, and some answers. The ones we covered here are perhaps the most vexing. At any rate, we covered the main details on Finally Friday! for September 5, so please refer to it for more.

Also, you can find even more commentary on our Finally Friday! show for September 26, where we are given a briefing from Dr. Ralph Wuebker or Executive Health Resources, who was kind enough to take a break from his busy schedule and join us for an hour.

You can also find a complete set of all the relevant documents in the handouts for those two shows.

Related Posts Plugin for WordPress, Blogger...
This entry was posted in Academy Blog and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *