CMS Announces New Settlement Initiative Addressing Medicare Appeals Backlog, Enhancing Provider Appeal Options

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Overview


In a Medicare Learning Network call on January 9, the Centers for Medicare and Medicaid Services provided specifics related to its new “Low Volume Appeals Settlement” initiative, allowing qualifying providers to settle pending appeals for a partial payment of 62 percent of the net approved amount of the subject appeal. In this On the Subject, we break down participation qualifications, procedures and timeline for settlements, and the tailored approach required to balance factors unique to each provider.

In Depth


In a Medicare Learning Network call on January 9, 2018, the Centers for Medicare and Medicaid Services (CMS) provided specifics related to its new “Low Volume Appeals Settlement” (LVA) initiative. The LVA allows qualifying providers to settle pending appeals at the Office of Medicare Hearings and Appeals (OMHA) and the Medicare Appeals Council (Council) for a partial payment of 62 percent of the net approved amount of the subject appeal. As we covered in our previous On the Subject, “Medicare Appeals Backlog: A Setback and New Opportunities for Providers,” there is a massive backlog of pending appeals at OMHA, and providers face a current estimated wait time of three years. As presented, the new LVA offers qualifying providers the opportunity for a shorter processing time and a pre-determined reimbursement rate for unresolved, pending Medicare claims.

LVA Participation Qualifications

The LVA is only available to Medicare Part A and B providers who have less than 500 appeals pending at OMHA and the Council across all National Provider Identifiers (NPIs) associated with the individual provider. The program is not available to Medicare Advantage Organizations (Part C) or Part D sponsors, or entities currently in bankruptcy, or expected to file for bankruptcy. CMS may also exclude a provider based on False Claims Act litigation, investigations, or other program integrity concerns such as pending civil, criminal, or administrative inquiries.

An appeal will be eligible for inclusion if it was pending at OMHA or the Council as of November 3, 2017. The appeal must have a total billed amount (not allowable amount) of $9,000 or less. This limitation applies to the entire appeal, not the individual claims. Appeals that fail to satisfy the filing requirements for Medicare appeals will not be eligible for LVA settlement. Further, the LVA will not be available for appeals that were part of an extrapolation. Additionally, as of the date of settlement with CMS, the subject appeal must still be pending at OMHA or the Council level of review. Importantly, if a provider opts-in to the LVA, the provider must settle all eligible appeals and will not have the ability to sequester certain appeals for hearing while obtaining an LVA settlement for others.

 

Procedure and Timeline for Obtaining LVA Settlement

A provider initiates the LVA process by submitting an Expression of Interest (EOI) to CMS. The EOI is available on CMS’s website. Providers submit the EOI to CMS through CMS’s LVA inbox.
CMS has established two separate timeframes to request LVA settlement. For providers with NPIs ending in an even number, CMS will accept EOIs between February 5, 2018, and March 9, 2018. For providers with an NPI ending in an odd number, CMS will accept EOIs between March 12, 2018, and April 11, 2018.

Once CMS receives an EOI request, CMS will verify that the provider has submitted the EOI in the appropriate timeframe and meets the qualification criteria. Following an initial finding of eligibility, a provider can expect to receive an “Administrative Agreement” and the corresponding spreadsheet of the provider’s potentially eligible appeals within 30 days of their EOI submission. Thereafter, a provider will need to sign the Administrative Agreement and return it to CMS within 15 days, although requests for extension may be possible. If a provider does not agree with the spreadsheet provided by CMS related to the qualifying appeals, a provider must submit an Eligibility Determination Request (EDR) to request appeals be added or removed from the spreadsheet within 15 days of receipt of the CMS Administrative Agreement. Once CMS receives the EDR, CMS has indicated they will work together with the provider and the provider’s Medicare Administrative Contractor for up to 30 days to reach an agreement regarding a “final appellant eligibility decision.”

After an Administrative Agreement is agreed to by the parties and the provider signs the Administrative Agreement, CMS will countersign the Agreement and send the fully executed Agreement to the provider, thereby removing the subject appeals from the Medicare appeals process. CMS will also send a copy of the fully executed Agreement to the provider’s Medicare Administrative Contractor for final eligibility verification and pricing. CMS indicates that it will make payment to the provider within 180 days of CMS’s execution of the Administrative Agreement.

Key Considerations

The LVA program is the latest development in alternative pathways for Medicare appeals resolution. It follows programs such as the Statistical Sampling Initiative, Settlement Conference Facilitation, and utilization of Senior OMHA attorneys to issue on-the-record decisions. Unlike these other recent initiatives, the LVA is administered by CMS rather than OMHA.

Most strikingly, the LVA differs from previous initiatives in that the substance of the underlying appeals has no bearing on the eventual settlement. That is to say, so long as a provider qualifies for the program, the settlement amount is fixed at 62 percent of the net approved amount of the claims at issue in the appeal, regardless of satisfaction of Medicare coverage criteria. However, because CMS requires that all pending eligible appeals be paid at the 62 percent rate, a provider has no discretion to select which appeals to settle through the LVA and which appeals to pursue through the traditional Medicare appeals process.

The LVA may be a strategically valuable option for those providers looking for a level of financial certainty and a comparatively expeditious payment of their pending Medicare claims. With the current Medicare appeals backlog at approximately three years long, the LVA ostensibly offers a predictable payment in less than one-third of the current projected OMHA adjudication timeframe. However, for those providers who have found success in garnering favorable decisions at the OMHA level of appeals, the prospect of a 62 percent payment may be underwhelming.

Conclusion

Overall, the LVA program should be seen by providers as a welcome addition to the existing alternative Medicare appeal options. Additionally, with some providers opting into the LVA, the program should help ease the growing Medicare appeals backlog and hopefully alleviate the wait time for providers awaiting traditional adjudication by an ALJ. Given the relatively short timeframe for providers to determine whether to opt-in to the LVA, providers will need to assess their options and strategic priorities quickly. Considerations should include a review of the substantive strength of their Medicare appeals, the relative impact of a 62 percent reimbursement on the subject appeals, the time value of expedited payment, and whether another alternative Medicare appeals program may be a better fit. Ultimately, the optimal appeals strategy will require a tailored approach balancing these and other factors unique to each provider.