Medicare Will Settle Short-Term Care Bills

Posted by Unknown on Friday, August 29, 2014

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Business Day |Medicare Will Settle Short-Term Care Bills

http://nyti.ms/1prrAFj

Sharply criticized by Congress and others, Medicare quietly announced on Friday that it would settle hundreds of thousands of hospital appeals over bills for short-term care, by offering deals that could add up to several hundred million dollars.

The decision is an effort by the government agency to end a protracted battle with thousands of hospitals over the amount they should receive for treating patients who stay just a day or two. So many hospitals have filed appeals with Medicare that a backlog now stretches for 18 months or more before the disputes are being resolved.

The proposed settlement, which was quietly posted on the agencyâ€™s website late Friday afternoon before the holiday weekend, represents a considerable concession by Medicare. The financial payout that it is offering to individual hospitals would be a little more than two-thirds of the amounts they have insisted they are owed.

Medicare â€œis offering an administrative agreement to eligible hospitals willing to resolve their pending appeals in exchange for timely partial payment,â€ said Aaron Albright, a Medicare spokesman. Mr. Albright described the offer as an opportunity for the hospitals â€œto alleviate the administrative burden of current appeals on both the hospital and Medicare system.â€

The settlement offer received a lukewarm reception from the American Hospital Association, the leading industry trade group, which is engaged in a court battle against Medicare over the delays. While it said the proposal would â€œprovide some temporary relief,â€ the organization criticized the settlement offer for being narrow and for failing to address the fundamental dispute between the parties.

Medicare and its contractors say many hospitals have overbilled the government for treating patients who underwent simple operations or were in the emergency room for a lengthy evaluation. They say that under Medicare rules, a hospital should receive a lower outpatient rate for that type of care rather than the much higher reimbursement for a full hospital stay, a difference that can add up to thousands of dollars for each patient.

Contractors, who conduct audits of the hospitalsâ€™ claims, assert that hundreds of millions of dollars have been assessed inappropriately for that type of care.

But the hospitals have resisted, arguing they are billing correctly for these stays. The contract auditors, which are private companies hired by Medicare to do such reviews, are tantamount to bounty hunters reaping contingency fees for finding overbilling, the hospitals contend.

The impasse between hospitals and Medicare has resulted in lengthy waits before cases can be heard by administrative law judges. Congress and industry leaders have denounced the delays leading to Medicareâ€™s decision to suspend the audit process. The settlement may allow Medicare to renew those audits.

Under the proposed settlement, hospital claims involving inpatient stays that are now under appeal would be paid 68 cents for every dollar billed. The hospitals have two months to decide whether to accept the settlement, and Medicare says it will pay them within 60 days of when they reach an agreement. How the agreement will affect patients is unclear.

The proposed settlement, which would apply only to hospital bills before Oct. 1, 2013, that are now under appeal, would address the lengthy wait time. Medicare officials have recently tried to clarify the rules so that hospitals have a clearer understanding of which stays qualify for the higher inpatient rate.

Hospitals that might otherwise gamble on getting paid in full once their case was heard may find the prospect of getting at least some of their money for services they have already provided attractive.

Medicare â€œis taking a big step forward to get rid of a major problem,â€ said Mark D. Polston, a partner in the health care practice at King & Spalding, which represents some hospitals that have sought to appeal their rejected claims. While he applauded the agency for finding a creative way to address the backlog, estimated as high as 800,000 cases, he said hospitals â€œwill have to consider whether this is a good deal for them.â€

The question for hospitals, he said, is how quickly they will receive the money under the settlement. â€œI would hate to see hospitals sign up expecting a check right away only to find more delay,â€ he said.

The American Coalition for Healthcare Claims Integrity, which represents the audit contractors, said it could not comment on the proposal without studying it.