CMS Settles 300,000 Hospital Appeals

$1.3 Billion Paid to Providers

Click to visit the page at

Click to visit the page at

The Centers for Medicare & Medicaid Services (CMS) has settled almost 300,000 appeals with over 1,900 hospitals under the Hospital Appeals Settlement, formerly known as the CMS Global Settlement Offer for Existing Appeals of Inpatient Claims. , accorded to an announcement posted on their website earlier today. This is the first public update given since February 25, 2015, when CMS held a conference call with that program’s participants.

Those few facts are all that is said by CMS. Readers here now know as much as anyone else does, period.

However, also updated on the CMS website, some updated instructions have been provided, specifically suggesting that Settlement Participants should download a revised version of the Round 1 and Round 2 instructions.

“Additional” Round 2 Instructions for Participants

Download link to this document appears at the end of the article.

Download link to this document appears at the end of the article.

The announcement states “Settlement participants are encouraged to see the revised ‘Critical Steps for Providers in the Appeals Settlement Process’ found in the Downloads section… for additional Round 2 instructions. ”  The download file says that it was updated on 2/20/2015, and the paragraph to notify providers of the new instructions is dated March 26, 2015. Get the download here.

The “Critical Steps” document is quite different from the original set of instructions, in “Hospital Participant – Settlement Instructions” document. Of course, at this point, the Round 1 instructions are pretty much moot, since entrance to Round 1 was closed last fall. Interestingly, the date March 26, 2015 was just added to the line on the webpage stating that CMS was almost done with Round 1, and Round 2 was just beginning.

The Round 2 instructions are now pretty detailed, with 18 steps. As we have come to expect, the rules are stacked in favor of CMS.

Round 1 – Reloaded

CMS may remind you of the "Agents" in this movie. Ok, maybe it 's just me.

Does CMS start to remind you of the “Agents” in this movie? Ok, maybe it ‘s just me.

For example, (Round 1 Step 5) while providers are given a whole 14 calendar days to review all the claims on the two lists coming out of Round 1 (the Agreement and Disagreement spreadsheets) and decide to accept (a) accept the Agreement sheet or not, plus (b) comment on the Disagreement sheet. The number of lines/claims in the sheets does not seem to make a difference. Large or small, 14 days is what they grant the provider to do their review and decide. If the provider accepts the Agreement sheet and the pricing therein, well then, (Round 1 Step 9) the MAC for that provider has 60 days (!) to send a dismissal letter for the claims on that sheet, and an unspecified time to process a notification letter and a payment to the provider, covering the amount on the Agreement sheet. The provider faces consequences if they miss their deadline, but the MAC suffers not at all, should they take any amount of time to process and send a check. Or not.

Before Round 2, We have… Round 1.5?

Sometimes, you wish you had a Dragon, right? Well anyway, its a cool picture...

Sometimes, you wish you had a Dragon, right? To come save you when people don’t play by the rules? Well anyway, its a cool picture, so… there.

Now, in case you thought Round 1 was over by the time you get the two sheets, think again. Remember, CMS makes the rules up as they go, change their minds often, and not always early. Plus, they are beyond judicial review. That in itself must be really advantageous… but I digress.

The MAC will review the Disagreement spreadsheet that the providers sends back, and after review of it, (Round 2 Step 3) can now add any NEWLY identified eligible claims that were missed in Round 1. Of course, they will also look for claims that might have been dropped from the sheet after CMS sent it out, since remember, this is an all-in process.

Somewhere inside Round 2 Step 4, there seems to be something missing, but it actually shows up later, taking up Steps #11 through 17. Step 4 calls for the MAC to create 3 new tabs in the spreadsheet to show Eligible Claims- Agree, Ineligible Claims- Agree, and Unresolved Claims (if applicable). Then the instructions make the odd statement: “Consensus is reached when there are no claims left on the Unresolved tab.” During their Special Open Door Forums, CMS alluded to this idea at least one time, saying that they would simply “keep at it” until consensus is reached.

So, Steps 11, 12 and 13 discuss how the MAC proceeds to try to reach “consensus.” If consensus is reached, they go back to Step 7 to process a payment, as in Round 1.

Consensus? What Consensus?

Remind you of anything in Round 2?

Remind you of anything in Round 2?

Failing said consensus, however, the MAC will actually call the provider directly to try for consensus (Step 15). If this fails, the MAC contacts CMS, and “[a] final determination on a claim’s eligibility for settlement will be made by CMS.” (Step 16)

At that point, it appears that consensus has been abandoned, as Step 17 sends the Unresolved tab to that black hole that every child is well familiar with, “Because I said so.”

Finally, don’t forget that not only can no provider appeal these decisions, but every claim that was “eligible” to be considered “eligible” or “ineligibile” for this settlement can “at a later date” – no time frame has ever been specified by CMS – be either included or excluded from this settlement, and CMS can recoup such payments made (Step 18).

Diagrams Available

Click for larger image. A Download link appears at the end of this article.

Click the image to see a larger image. A Download link appears at the end of this article.

On October 10, 2014, we created two “decision trees” to describe the offer process and the validation process, and both grant license for you to copy and distribute. (links below)

Both are still valid, but there is one thing we would suggest to change. In the Global Settlement Validation, we showed that in Round 2, if the hospital did not agree with the lists, there was an “Uncertain Outcome” – which is how we interpreted the CMS promise to “keep at it until consensus is reached.” Well, now we know, from Round 2 Step 17, the outcome is better known: CMS decides. Period. End of story.

I wish that were a surprise.

Global Settlement Offer (PDF)

Global Settlement Validation (PDF)


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