CMS Pays $1.3 Billion to Settle Hospital Claims

CMS settles with 1,900 on audited claims stuck in OMHA. AAHomecare asks, ‘Is there anything in sight for DMEPOS?’

As part of a settlement agreement with 1,900 hospitals, CMS has paid $1.3 billion to settle roughly 300,000 claims that were stuck at the Office of Medicare Hearings and Appeals (OMHA).

The settlement offered 68 cents for every $1 on a denied inpatient claim in exchange for hospitals dropping their appeals. The payments of $1.3 billion as of June 1 will be withdrawn from the Medicare Trust Fund, which is facing insolvency. (Read the full CMS statement on the settlement.)

“This settlement was pursued by the CMS directly with the hospital systems without the involvement of the American Hospital Association (AHA) and OMHA,” a statement from the American Association for Homecare read. “This settlement only concerned inpatient stays that were denied and could have been reimbursed in an outpatient setting.”

The association noted that while CMS reported that 18 percent of all appealed claims have been overturned in favor of hospitals, but the AHA keeps its own self-reported data and finds that hospitals have won two-thirds of the time. Hospitals reported there was an average of $1.4 million stuck in the appeals queue, and some larger hospitals have $20 million tied up in the process, according to an AHA report.

The big question for the HME industry is what does this mean for providers’ claims, which are also stuck in the backlog at OMHA? AAHomecare reports it has been trying to work with OMHA.

“Knowing the financial hardships that AAHomecare members and all providers are facing, AAHomecare has spoken with OMHA on settlement options that might be adjusted to accommodate the DMEPOS industry,” the statement from the association read. “… The current settlement options offered by OMHA are not appealing to the DMEPOS industry based on the strict criteria that OMHA has established to be eligible. On June 25, OMHA will hold a conference call appellate forum for an update on their initiatives. AAHomecare is hopeful that options for the DMEPOS industry will be discussed.”

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

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